SUMMARY & RECOMMENDATION
Our market over $3 million has had the best year since the recession. Sales are improving, particularly in the 4th quarter. Sales have fallen under $1 million due to inventory shortages and sales over $3 million are up so the average price is up. The result is a deceptive increase in the average and median price house price in Greenwich.
When you compare the sales to assessment ratios year over year, we have a 7.1% increase in house prices. Old Greenwich, Riverside and Central Greenwich continue to be hot markets as does new construction at any price. The increase in building can be seem from the fact that teardowns are up 57% in the last fiscal year as many people want to build a house to their specifications.
Under $2 million we don’t have a lot of inventory and much of what we do have is the leftovers from the summer the market. When new inventory does come on you need to be ready to move quickly by being not only being pre-qualified, but also being pre-approved. If you are pre-approved most of the loan process complete and you only need appraisal. Being able to close quickly gives you a major advantage in the market.
From $2 – 5 million we have good inventory and now is a good time to be looking. With quantitative easing ending interests rate will most likely go up in 2015 and prices are appreciating so now is a good time to be looking.
Over $5 million we still have good inventory, but buying sooner rather than later is still a good idea. Each property in this price range is unique. For many buyers at the high end with fixed criteria the inventory often narrows quickly to only a handful of listings. If you are flexible on what you want, you can still get a deal, especially if you can close before year-end.
If you are thinking about building now is the time to buy so that you can do your design and permitting in the winter and be ready to break ground in the spring.
Historically, winter listings were few and far between as the thought was that there weren’t any buyers looking in the winter. I don’t think that will be the case this winter. Reduced oil prices are injecting a $100 billion into the U.S. economy. Unemployment is back to normal levels and people are starting to feel good about the economy.
In 2013 we had a very good fourth quarter which continued through January 2014 even with a bad winter. This year seems to be shaping up the same way and be above the average for the last decade.
Another factor for an earlier listing this winter rather than waiting for the spring market in March is that Wall Streeters are now “fully bonused”. They are getting not only a third of this year’s bonus, but also a third from each of the two previous year’s bonuses. These high-end bonus buyers also close earlier in the year meaning they are shopping earlier. Greenwich real estate sales normally peak in June, but over $5 million April is historically the month with the most sales.
One of the other advantages of putting a listing on in the winter is that the people who show up are serious buyers and we should see even more of them this winter. Last year we had a very good December and a good January and there is a good chance that this pattern will repeat itself this year.
Feel free to contact me if you have any questions about the market for your house.
Mark Pruner, 203-969-7900