So How is Greenwich’s High-End Real Estate Market Doing?

salescontracts-gmls-4m-09281616-jpg

The demise of Greenwich’s high-end market has been greatly exaggerated. So far this year 59 properties over $4,000,000 have been sold in Greenwich. If you annualize these sales you get 81 sales at the high-end and that number is likely to be even higher by the time we get to year end.

Year $4-5M $5-6.5 $6.5-10M $10M+ Totals
2003 32 29 15 3 79
2004 48 37 24 14 123
2005 53 36 32 19 140
2006 50 45 31 14 140
2007 52 51 47 22 172
2008 26 21 20 14 81
2009 21 21 10 15 67
2010 34 14 16 14 78
2011 37 30 14 9 90
2012 26 36 19 16 97
2013 30 27 17 11 85
2014 35 40 18 16 109
2015 38 32 21 11 102
2016 Anlzd 34 23 15 8 81
2016 YTD 25 17 11 6 59
Inventory 58 67 60 48 233

Sales will most likely be higher because of a shift of high end sales to later in the year so simply annualizing the prior 2016 sales results in a lower estimate. Both 2014 and 2015 were good years for sales over all and our best years for high end sales since 2007. This year is likely to look more like 2013 when we had 85 high-end sales.

highend-sales98-8-16-barchartstacked-092816

So sales are down, but they haven’t fallen off a cliff as some might have us believe. So why all the concern. Several factors are combining this year to make 2016 a particularly challenging year for high-end sales. Probably, the biggest factoring making the slow sales seem even worse is the increase in inventory at this end of the market. We have 233 listings on the market above $4M. At the beginning of September we were up 40 listings over the same time last year.

 

The result of sales slipping and inventory increasing is a big jump in months of supply. Months of supply for the over $10 million price range is literally off the chart with 128 months of supply. This number and other numbers for months of supply is deceptive, because a single sale will bring it down by more than a year of supply.

aug2016-mos-091416

Also all high-end numbers are misleading because traditionally about 25% of our high-end house sales are private sales and never appear on the GMLS as a public listing. This compares to about 13% for most other price ranges. For example the biggest sale last year escaped most people’s attention, because it was a private sale that occurred during the holiday season.

There is, however, no denying that sales are down and inventory is up. These two factors are in some ways the flip side of the same coin. If houses don’t sell then inventory accumulates. At the same time the Connecticut legislature is not helping high-end sales. Instead of nurturing our highest taxpayers they have passed multiple taxes changes that have actually resulted in lower tax revenue.

The best, or worst, example of this is increasing the marginal tax rate by 0.2% on incomes over $500,000. I’m sure some intern multiplied the prior year’s tax receipts by 0.2% and came up with a nice revenue bump.

But things don’t work that way in real life as homeowners in these price brackets usually have multiple homes. All the taxpayer has to do is arrange to stay out of the state for more than 6 months each year. Some people have done this very vocally. Another example is the special tax on expensive shoes. It creates minimal revenue and is just another slap in the face to high income taxpayers already paying very big bucks to the state.

Curiously, the increase in inventory can also be attributable to house prices doing better as people now have more equity to move up or out. This effect is, however, seen primarily in the lower half of our market.

But what of the buy side? Under $2M, and even under $3M, the market is chugging along just fine and even up somewhat from last year. Our market would be the envy of most towns where a $2M sale is big news.

The high-end market is down across the country; New York City, the Hamptons, south Florida, Aspen and L.A. So what is causing this? Each market has its own quirks, but when you have a national trend the most likely cause is a national issue and we have three of them; a strong dollar, an uncertain election and weak foreign investor demand.

The strong dollar is making every property in America more expensive for foreigners to buy. Also discretionary high-end buyers hesitate making house buying decisions when there is uncertainty and the Hilary/Donald choice is making for one of the more uncertain investment climates.

We also for the first time in the post-recession environment have uniformly weak foreign demand. No country’s high end investors are increasing their buyer interest in U.S. residential real estate. In addition to the strong dollar and the uncertainty of the presidential election a new IRS regulation has caused concern for many foreign investors.

The IRS enacted a requirement that the principals behind US purchases of residential real estate in NYC and Miami be disclosed. They liked this rule so much they expanded it to Texas. The law was aimed at drug dealers and kleptocrats, but for business people in countries with a moderate to low rule of law, this disclosure can be dangerous to their money and their freedom if there is a regime change. Europeans also are much more concerned about keeping personal matter private as several US Internet companies have found out.

Just how much of a factor these regs are is unknowable, but I know several foreign investors that are concerned. One place where the effect of these regs may be seen is the EB-5/10 visa program for investments of $500K or a $1M by foreigners in the US. The Wall Street Journal reported that this program is down substantially this year with thousands of fewer visa application. There is concern that these IRS regs will go nationwide. It’s another national factor that we are seeing in the high-end nationwide.

Now personally, I think 2017 will be a good year for real estate with low interest rate, the election uncertainy resolved and low oil prices leaving billions of dollars in our collective pockets. We already saw this in the huge jump in personal income in 2015 and it is likely to be even better in 2016, once the numbers are in. So the future could be bright.

Greenwich Land Trust’s Go Wild! – A lot of fun on a beautiful day

Go Wild! is one of the most fun family events in Greenwich. Over thousand adults and children from Greenwich and all over the area. Held at the polo fields at Conyers Farm in north Greenwich there are lots of activities from 50′ bungee jumps, petting zoo, snake petting with boas from the Beardsley zoo to soccer, pony rides and cornhole. The premier fun thing to do is the balloon ride.  Four beautiful balloons give tethered rides so no danger of ending up in Long Island Sound.

It was touch and go as to whether the balloons would fly as the first two hours of Go Wild! was breezy, but then as the sun got lower the wind died down and the balloons went up.

In the main tent there was plenty of food and drink and back by popular demand country band Gunsmoke played.

Douglas Elliman was the Platinum sponsor; check out the banner behind the band.

It was a good time for a good number of people.

 

Fairfield County Home of the 1-Percenters

New York Times logo

 

The New York Times has an interesting article showing where the top 1-percenters live (its Manhattan and Fairfield County). Manhattan has a one percent threshold at $1,425,000 and Fairfield County’s is close behind at $1,391,000. Westchester County comes in third at $1,185,000 or $240,000 behind Manhattan.

Interestingly, no county in Florida, Texas or Georgia make the top ten. Marin County in California comes in fourth at $1,134,000.  The data is a little out of day as it shows Marin, California McKenzie, ND fourth and with the fall in oil prices I’m sure that’s not the case now. The study also lists three low population, vacation centers in the top ten in Wyoming, Utah and Colorado, but these aren’t my first choice places to look for a high paying job.

New York Times - Where the 1-percenters live

 

 

 

Greenwich High-End Sales are Perking Up in Mid-September 2016

 

Rest of the Market is Good to Very Good

August was a good month for sales in Greenwich and September is looking like it will be too. And, for more good news, the high-end market is perking up in September. We’ve had 5 sales over $4 million in Greenwich so far this month including the highest priced sale so far this year, $16,250,000. We also have another 10 contracts pending over $4 million.

As of 9/21/16 Contracts Last Mo. Solds Tot. Solds+ Contracts
< $600K 9 4 13
$600-$800K 18 10 28
$800K-$1M 11 2 13
$1-$1.5M 15 7 22
$1.5-$2M 14 11 25
$2-$3M 15 7 22
$3-$4M 9 2 11
$4-$5M 7 1 8
$5-6.5M 1 2 3
$6.5-$10M 2 1 3
> $10M 0 1 1
TOTAL 101 48

149

 

So far in September we have 48 sales; 38 single family homes, 2 co-ops, and 8 condos. If you gross up the 38 single family home sales for the whole month you get 54 sales for September. This compares to a ten-year average of 46 house sales in September. Now 2015 had a good September with 63 sales, but when you take out the 8 private sales you have a near identical 55 GMLS sales in 2015 to our expected 54 sales this year.

The really good news comes from when you look at our contracts. We have 101 contingent and pending (no contingency) contracts. Of those 101 contracts, 10 are over $4 million. We can use some more sales in this price range, but the trend is in the right direction this month.

I talked to Russ Pruner, who had the buy side of this year’s highest sale and the sell side of last year’s highest sale. He said the prime factors in the high-end market are condition and location. Both of these highest sales were multi-acre properties on Long Island Sound. Condition is also key as people these days have limited time and want to spend time as little time as possible renovating to their needs. With the variety of beautiful homes that don’t have to settle.

One other big factor is style and layout. Big, imposing houses with “institutional” feeling layouts are not as popular as more “friendly” houses, which seems to be a factor damping more sales at the ultra-high end. Having said that we’d only need 10 buyers to make a huge difference in the over $10 million market.

Our market under $2 million continues to do well. The GMLS sales figures of listings under $2 million include 10 condos and co-ops and 24 house sales. Interestingly, just like our houses our condos are slower at the high end, however, for condos the high-end starts at around $1.8 – 2 million.

September Sales and Contracts as of 9/21/16

Greenwich Sales and ContractsBlue are solds, Yellows are Pending Contracts, Green are Contingent Contracts

When you look at the geographical distribution of sales and contract you can see that the idea that back-country sales are dead is just wrong. Given that backcountry Greenwich is 4-acre zoning you need to quadruple the dots in backcountry to get a graphical feel of just how popular sales per lot are compared to the 1-acre zone.

In fact, where you see most of the sales and contracts within a half mile of I-95 you are looking at half-acre, quarter-acre and even one-sixth-acre zones. So cut those dots by a half, three-quarters or five-sixths depending on the zone and backcountry is looking a lot better. Having said that it’s a slower market, but by no means dead.

Another thing you see reflected on the map is commuting time to NYC whose businesses have been booming. Being near New York or near the train or highway to New York will help your sale.

On the inventory side we are now in the heart of the fall market with 620 single family homes on the market. This is a little higher than normal, but having adequate supply from $1 – 2 million, and decent, though not good supply, under $1 million is leading to more sales in 2016 than last year.

Overall it’s turned into a good second half market and the recent high-end sales are promising. While it had been slow at the high-end, we have reached that time of year where those property start selling.

For more information give me a call at 203-969-7900. Mark Pruner

Greenwich, CT Open Houses for Sunday, Sept. 18, 2016

On Sunday there are 96 Open Houses to see from rentals to a home for $7,275,000.

Many of the houses are only open for 2 hours and the times are staggered. For your convenience, I have split the list in three separating Friday, Saturday, and Sunday.  Pay attention to each Open House time so you can maximize the number of homes you visit. You can be strategic in your planning by, first, reviewing the homes available in your price range, checking the day & time and, then, click here for  the interactive map to plan your route. 

The number of homes in each price range is as follows:

Under $1,000,000:  16 Homes

From $1,000,000 to $2,000,000: 34 Homes

From $2,000,000 to $3,000,000: 23 Homes

$3,000,000 and above: 24 Homes

Click here for the interactive map.

Address Town Price Time Broker
40 Lockwood Lane Riverside $5,800 Sun 1-3 PM Houlihan Lawrence
87 N Stonehedge Drive Greenwich $7,200 Sun 1-3 PM BHG Rand
27 Cobb Island Drive Greenwich $10,000 Sun 2-4 PM William Raveis
9 Stallion Trail Greenwich $12,999 Sun 1-4 PM Berkshire Hathaway
33 Talbot Lane  #18 Greenwich $519,000 Sun 1-4 PM Berkshire Hathaway
32 Mead Avenue Greenwich $599,000 Sun 2-4 PM Douglas Elliman
333 Palmer Hill Road  #2 E Riverside $695,000 Sun 1-3 PM Coldwell Banker
45 Ettl Lane  #401 Greenwich $749,000 Sun 1-3 PM Weichert Realtors
21 Prospect Street Greenwich $895,000 Sun 1-4 PM Berkshire Hathaway
49 Indian Harbor Drive  #6 Greenwich $929,500 Sun 1-3 PM Houlihan Lawrence
56 Northfield Street Greenwich $949,000 Sun 1-3 PM Coldwell Banker
28 HOME Place B2 Greenwich $989,000 Sun 1-3 PM Coldwell Banker
50 Church Street  #7 Greenwich $990,000 Sun 2-4 PM Coldwell Banker
2 Cary Road Riverside $997,000 Sun 12-2 PM Sotheby’s
1057 King Street Greenwich $999,000 Sun 1-3 PM William Raveis
1057 King Street Greenwich $999,000 Sun 1-3 PM William Raveis
45 Riberside Avenue Riverside $1,049,000 Sun 12-2 PM William Raveis
83 Lancer Road Riverside $1,050,000 Sun 12-2 PM William Pitt Sotheby’s
48 Spring Street  #5 Greenwich $1,075,000 Sun 1-3 PM Weichert Realtors
5 Macarthur Drive Old Greenwich $1,195,000 Sun 1-3 PM William Raveis
49 Edgewater Drive Old Greenwich $1,195,000 Sun 2-4 PM Coldwell Banker
20 Scott Road Greenwich $1,249,000 Sun 1-3 PM Berkshire Hathaway
12 Georgetowne North  #12 Greenwich $1,250,000 Sun 12-3 PM Coldwell Banker
40 Lockwood Lane Riverside $1,259,000 Sun 1-3 PM Houlihan Lawrence
32 Pleasant Street Cos Cob $1,295,000 Sun 1-3 PM Berkshire Hathaway
10 Lockwood Drive Old Greenwich $1,325,000 Sun 1-3 PM Coldwell Banker
31 Scott Lane Greenwich $1,395,000 Sun 1-3 PM Coldwell Banker
43 Highview Avenue Old Greenwich $1,395,000 Sun 1-3 PM Berkshire Hathaway
7 Cherry Valley Road Greenwich $1,395,000 Sun 1-3 PM Coldwell Banker
1065 King Street Greenwich $1,475,000 Sun 1-3 PM Coldwell Banker
67 Mary Lane Old Greenwich $1,495,000 Sun 1-3 PM Sotheby’s
40 Carrington Drive Greenwich $1,495,000 Sun 1-4 PM William Raveis
146 E. Elm  #A Greenwich $1,590,000 Sun 1-3 PM Berkshire Hathaway
405 W Lyon Farm Drive  #405 Greenwich $1,600,000 Sun 1-4 PM Sotheby’s
3 Nutmeg Drive Greenwich $1,649,500 Sun 2-4 PM Weichert Realtors
18 Ferncliff Road Cos Cob $1,690,000 Sun 12:30-2:30 PM Douglas Elliman
51 Forest Avenue  #115 Old Greenwich $1,694,000 Sun 2-4 PM William Raveis
4 Banksville Road Greenwich $1,695,000 Sun 1-3 PM Coldwell Banker
812 Lake Avenue Greenwich $1,695,000 Sun 1-4 PM Halstead Property
12 Halock Drive Greenwich $1,695,000 Sun 2-4 PM Coldwell Banker
7 Steeple Chase Greenwich $1,695,000 Sun 2-4 PM Sotheby’s
562 Riversville Road Greenwich $1,695,000 Sun 2-4 PM Houlihan Lawrence
45 Doubling Road Greenwich $1,699,000 Sun 11-2 PM Higgins Group
19 Connecticut Avenue Greenwich $1,725,000 Sun 2-4 PM Houlihan Lawrence
6 Midbrook Lane Old Greenwich $1,889,000 Sun 1-3 PM Coldwell Banker
311 Cognewaugh Road Cos Cob $1,950,000 Sun 2-4 PM Sotheby’s
344 Cognewaugh Road Cos Cob $1,985,000 Sun 1-3 PM Coldwell Banker
300 Stanwich Road Greenwich $1,995,000 Sun 1-3 PM David Ogilvy
10 Sweet Briar Lane Cos Cob $1,995,000 Sun 1-4 PM William Raveis
23 Frontier Road Cos Cob $1,995,000 Sun 2-4 PM Houlihan Lawrence
16 Hope Farm Road Greenwich $2,099,000 Sun 1-4 PM William Raveis
116 Pecksland Road Greenwich $2,100,000 Sun 1-3 PM William Pitt Sotheby’s
207 Valley Road Cos Cob $2,100,000 Sun 2-4 PM Coldwell Banker
49 Zaccheus Mead Lane Greenwich $2,150,000 Sun 1-4 PM Berkshire Hathaway
65 Sherwood Place Greenwich $2,150,000 Sun 1-4 PM Berkshire Hathaway
317 Overlook Drive Greenwich $2,199,000 Sun 1-4 PM William Pitt Sotheby’s
63 Sherwood Place Greenwich $2,250,000 Sun 1-4 PM Berkshire Hathaway
15 Relay Place Cos Cob $2,395,000 Sun 1-3 PM Berkshire Hathaway
25 Heusted Drive Old Greenwich $2,395,000 Sun 1-3 PM Coldwell Banker
35 Indian Harbor Drive  #A Greenwich $2,450,000 Sun 1-3 PM Douglas Elliman
17 Chieftans Road Greenwich $2,450,000 Sun 1-4 PM Sotheby’s
11 Red Coat Lane Greenwich $2,590,000 Sun 1-3 PM Sotheby’s
27 Chieftans Road Greenwich $2,650,000 Sun 1-4 PM Coldwell Banker
113 Patterson Avenue Greenwich $2,695,000 Sun 1-4 PM Berkshire Hathaway
777 Lake Avenue Greenwich $2,700,000 Sun 1-3 PM Sotheby’s
27 Cobb Island Drive Greenwich $2,799,000 Sun 2-4 PM William Raveis
95 Valley Road  #B Cos Cob $2,825,000 Sun 1-3 PM William Raveis
1 Kernan Place Old Greenwich $2,875,000 Sun 2-4 PM Anderson Associates
130 Lower Cross Road Greenwich $2,995,000 Sun 1-4 PM Sotheby’s
124 Porchuck Road Greenwich $2,995,000 Sun 12-2 PM Coldwell Banker
153 Milbank Avenue  #3 Greenwich $2,995,000 Sun 12-5 PM Coldwell Banker
9 Stallion Trail Greenwich $2,999,000 Sun 1-4 PM Berkshire Hathaway
33 Hendrie Avenue Riverside $2,999,999 Sun 2-4 PM Houlihan Lawrence
34 Miltiades Avenue Riverside $3,250,000 Sun 1-3 PM William Raveis
153 Milbank Avenue  #2 Greenwich $3,250,000 Sun 12-5 PM Coldwell Banker
153 Milbank Avenue  #4 Greenwich $3,275,000 Sun 12-5 PM Coldwell Banker
153 Milbank Avenue  #1 Greenwich $3,475,000 Sun 12-5 PM Coldwell Banker
27 Mooreland Road Greenwich $3,495,000 Sun 1-3 PM Sotheby’s
15 Cottontail Road Cos Cob $3,495,000 Sun 1-4 PM Coldwell Banker
323 Cognewaugh Road Cos Cob $3,495,000 Sun 2-4 PM Coldwell Banker
17 Cottontail Road Cos Cob $3,495,000 Sun 2-4 PM Houlihan Lawrence
43 Grahampton Lane Greenwich $3,500,000 Sun 1-4 PM Berkshire Hathaway
14 Sherwood Farm Lane Greenwich $3,595,000 Sun 1-4 PM Halstead Property
340 Old Church Road Greenwich $3,795,000 Sun 1-3 PM Coldwell Banker
130 Old Church Road Greenwich $3,795,000 Sun 2-4 PM Prime Sites
12 Ridgebrook Road Greenwich $3,975,000 Sun 1-4 PM Sotheby’s
15 Stillman Lane Greenwich $4,495,000 Sun 1-4 PM William Raveis
1 Ashton Drive Greenwich $4,690,000 Sun 2:30-4:30 PM Douglas Elliman
14 Hycliff Road Greenwich $4,995,000 Sun 1-3 PM Berkshire Hathaway
53 Hillside Road Greenwich $4,995,000 Sun 1-3 PM Coldwell Banker
636 Riversville Road Greenwich $4,995,000 Sun 1-3 PM Sotheby’s
51 Keofferam Road Old Greenwich $4,995,000 Sun 1-4 PM Halstead Property
5 N Crossway Old Greenwich $5,400,000 Sun 1-3 PM Sotheby’s
42 Lower Cross Road Greenwich $5,495,000 Sun 2-4 PM Douglas Elliman
7 Gaston Farm Road Greenwich $6,390,000 Sun 1-3 PM Executive
14 Dawn Harbor Lane Riverside $6,495,000 Sun 2-4 PM Houlihan Lawrence
38 Dairy Road Greenwich $7,275,000 Sun 1-3 PM Coldwell Banker

Greenwich Is Still A Great Place To Own A Home

Two articles came out this week that can give the wrong impression of what is happening in the Greenwich real estate market. The one that got the most attention was a Bloomberg article claiming that Greenwich is the worst US housing market in the U.S.

The reality is that the Greenwich market is actually doing fairly well this year. Our market under $2 million is a sellers’ market with good demand and with one exception tight inventory. The one exception is our market from $1 – 1.5 million where our inventory is up from 38 listings in August 2015 to 58 listings at the end of last month. This is an increase of 22 listings or more than 50%. Now this looks dramatic, but it’s not. Last year we had an extraordinarily tight market in this price range and needed more inventory. This year we got it and sales and contracts jumped up 16 houses from last August.

aug2016-mos-091416

From $2 – 3 million we have a fairly balanced market in Greenwich with under a year of supply.  When you annualize this year’s August sales months of supply dropped from 14 months last year to 8.4 months this. In fact, August was a good market for sales all the way up to $5 million. Also we had four high-end sales in the past week from $4.6M to $8.9M.

So where did this impression come from that the Greenwich market is so bad? The problem is, and it’s not a problem just limited to Greenwich, is that high end sales have been soft nationwide. Jonathan Miller of Miller Samuel Inc. told me that all 18 of the real estate markets that he reports on are soft at the high-end.

Aug. 15 vs 16 Inventory Contracts Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Mo. Annlzd
< $600K -3 -1 -2 -3 -3 -4 -0.9 -0.8
$600-$800K -1 4 5 9 9 13 -2.4 -2.1 -7.3
$800K-$1M 1 0 -4 -4 3 3 -0.3 -0.2 2.9
$1-$1.5M 22 5 11 16 -6 -1 2.4 2.2 -1.9
$1.5-$2M -2 8 3 11 -3 5 0.0 -0.5 -1.4
$2-$3M -3 -3 5 2 3 0 -0.7 -0.3 -5.6
$3-$4M 11 -5 0 -5 -8 -13 4.9 5.9 1.8
$4-$5M 13 -4 2 -2 -1 -5 5.7 7.8 -25.7
$5-10M 28 -5 -4 -9 -13 -18 17.4 17.9
> $10M -1 -2 -2 -4 -2 -4 49.6 85.5
TOTAL 65 -3 14 11 -21 -24 1.8 1.7 -1.2
Pro-Seller Pro-Buyer

Some people would have you believe that the slightly higher state income tax for 2016 in Connecticut is driving the wealthy out of the state. There’s no denying that there is discussion about this among people I know, but that doesn’t account for the slower sales in New York City, Los Angeles, Miami, the Hamptons, Aspen and other places.

The one thing that hurts all of these markets is a strong dollar making US real estate more expensive for foreign investors. As these investors pull back some of the froth goes off the market. (On the flip side, foreign investors who invested earlier are seeing some nice appreciation in their purchases when calculated in their local currency.)

Another issue at the high-end are changes in Wall Street compensation. Traditionally in Greenwich, high-end houses went to contract in February and March and closed in March and April. The closings were often very quick since the deals were all cash and paid out of the buyers’ cash bonuses. These bonuses are now often paid out over multiple years and in stock rather than cash. The result has been that more high-end purchases are being made in the last four months of the year. Each of the last two years we have seen some dire predictions only to see a nice pop-up in sales in the later part of year.

You can see a little of this when you look at the $4 – 5 million market. In August in that price range, we have four properties under contract and three sold out of a total of 21 sales YTD. So a third of the transaction so far are recent.

Having said this there’s no denying that the market over $4 million in Greenwich is highly competitive for sellers. As the amount of Wall Street bonuses are lower and, for the moment, the interest from foreign buyers is down, dealing with disgruntled sellers is an important part of the high-end agents’ job.

To sell a high-end house in this market in Greenwich it needs to be in a good location and most of these houses are. It also needs to be in very good shape and many of these houses are. Unfortunately, many of the magnificent styles of prior year have styles and layouts that do not fit todays buyers’ lifestyles.

The second article in the Greenwich Time was entitled “Greenwich real estate among the priciest in the nation.” This info came from Coldwell Banker’s annual house report and states that Greenwich is the most expensive market in the country outside of California. Now you combine these two articles headlines and the impression is that high prices on overpriced houses lead to poor sales.

If you read beyond the headline in the Greenwich Time article you see that what CB is actually analyzing is the average price in each market of four bedroom two bath houses. The report says the average price for a 4BR, 2BA house in Greenwich is $1,349,000. This average is right in the hottest part of our market so what this survey shows is that Greenwich is, rather than the worst market as some people would have you believe, one of the most desirable places to live in the US. It clearly is where people are willing to pay the most for a four bedroom, two bath house outside of California.

Now you have to take all of these surveys with a large grain of salt. In the GT article I got quoted as saying that downsizers from Westchester move here because of high taxes in Westchester County. Several of my fellow Douglas Elliman agents from Westchester chided me for implying that that meant that Westchester is a less desirable place to live and it isn’t. You could just as easily say that many young families prefer to live in Westchester, because they get more house for their money, which is also true. The great thing is that each buyer can find a place that meets their family and financial needs.

So the sky isn’t falling, lots of people would love to live in Greenwich. At our high-end prices have adjusted slower as many people can afford to carry two or more houses until they get their price, which. This “price” often seems to be at least what they paid for it at the height of the market and those prices are not coming back.

We’ve had 59 high-end buyers decide they like Greenwich this year so far and there is very good chance that number will rise significantly in the rest of the year. If the dollar drops US real estate will be not only a safe investment, but also a better bargain. (It would be nice if the Connecticut legislature came up with a better tax system.) Lastly, the best news of the week was that the U.S. Census reported that household income was up 5.2% in 2015. This is the biggest gain ever reported for by the Census and means that people have more money for down payments at a time of extraordinarily low interest rates. It all depends on how you look at it.

 

August 2016 Greenwich Real Estate Report – Very Active Market up to $2M

By Mark Pruner

Douglas Elliman – Greenwich

mark.pruner@elliman.com – 203-969-7900

 

August was a good month for sales under $2 million and an unfortunately a slow month for high-end sales, luckily the best sales time for the high-end market is coming. The hottest part of the market in August was from $1 – 1.5 million dollars where we had 18 sales and 14 contracts outstanding or a total of 32 houses off the market. This is up 16 sales and contracts from last year.

aug2016numbers

Over $5 million August was not a good month. We had no closings over $5 million and nothing went to contract in August. We do have 7 contracts pending at our high end. Just below this price range the $4 – 5 million price range had 3 sales in August which was 2 more than last August.

Now some folks think this high-end weakness is an issue with Greenwich and Connecticut, but it is a general problem nationally. High-end sales are down in NYC, the Hamptons, South Florida, L.A. and many other places. Also, at least here in Greenwich, high-end sales have shifted to the last quarter of the year so here’s hoping for a repeat of the upturn in year end sales we have seen the last two years. So far it looks like 2016 will repeat that pattern with 4 sales over $4 million dollars reported so far in September.

 

 

As of 8/30/16 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 5 2 0 2 11 13 3.6 3.7 #DIV/0!
$600-$800K 19 12 7 19 31 43 4.9 4.2 2.7
$800K-$1M 22 8 4 12 32 40 5.5 5.2 5.5
$1-$1.5M 58 14 18 32 83 97 5.6 5.7 3.2
$1.5-$2M 60 20 14 34 81 101 5.9 5.6 4.3
$2-$3M 109 15 13 28 80 95 10.9 10.9 8.4
$3-$4M 87 6 6 12 39 45 17.8 18.4 14.5
$4-$5M 58 4 3 7 21 25 22.1 22.0 19.3
$5-6.5M 67 2 0 2 12 14 44.7 45.5 #DIV/0!
$6.5-$10M 60 5 0 5 9 14 53.3 40.7 #DIV/0!
> $10M 48 0 0 0 3 3 128.0 152.0 #DIV/0!
                   
TOTAL 593 88 65 153 402 490 11.8 11.5 9.1

 

When you look at a table of sales showing changes from last year at this time, this bifurcated market really stands out. Below $2M sales and contracts are up in nearly every price range. Inventory is also about the same all the way to $2 meaning that our months of supply is also down. The result is a seller’s market.

Aug. 15 vs 16 Inventory Contracts Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Mo. Annlzd
< $600K -3 -1 -2 -3 -3 -4 -0.9 -0.8
$600-$800K -1 4 5 9 9 13 -2.4 -2.1 -7.3
$800K-$1M 1 0 -4 -4 3 3 -0.3 -0.2 2.9
$1-$1.5M 22 5 11 16 -6 -1 2.4 2.2 -1.9
$1.5-$2M -2 8 3 11 -3 5 0.0 -0.5 -1.4
$2-$3M -3 -3 5 2 3 0 -0.7 -0.3 -5.6
$3-$4M 11 -5 0 -5 -8 -13 4.9 5.9 1.8
$4-$5M 13 -4 2 -2 -1 -5 5.7 7.8 -25.7
$5-10M 28 -5 -4 -9 -13 -18 17.4 17.9
> $10M -1 -2 -2 -4 -2 -4 49.6 85.5
TOTAL 65 -3 14 11 -21 -24 1.8 1.7 -1.2
Pro-Seller Pro-Buyer

 

The one inventory exception in the lower half of our market is $1– 1.5 million where inventory is up a dramatic 22 listings from last July. Counterbalancing this jump in inventory in our most popular price range is an almost equal jump in sales and contracts which combined are up 16 listings. The overall result is a months of supply that is still under 6 months, the dividing line between and buyer’s and a seller’s market.

Our inventory is up 65 listings from last year, but we did finally drop below 600 listings to 593 listings. Besides the 22 more listings from $1 – 1.5M, we have 52 more listings from $3 – 10 million. In that same price range, we have 22 fewer sales so we have big jumps in months of supply. From $3 – 4M months of supply is up 5 months from 2015 to a year and a half of supply of houses this year.

sales-sfh-2014-aug2016fnl-080316

Our 75 sales in August exceeds our 10-year average. The 75 sales is up 24 sales from August 2015’s 60 sales which included 9 private sales. When you consider how few sales we are getting from the market over $3 million, it shows just how the strong the market is under $2M.

 

aug2016-mos-091416

Months of supply is also showing a good trend when you look at August sales annualized. With inventory down, albeit higher than average for prior years, and sales up in August things are looking better from $2 – 5M than they did in July.  Below $2M, August sales also looked in good in what was already a tight market from $1 – 2M.

For those people thinking about putting their house on the market next year, they should reconsider if the list price is under $3M and consider listing in the fall market. You never know what the market will be next year.

Right now the $1 – 3M price range is hot. In this price range our sales percentage is about double our inventory. Buyers are looking for new inventory, so now is a good time to list a house. Surprisingly, it may also be a good time to list a house over $5M. Much of this price range has been sitting on the market for several months and in the internet era, buyers are reluctant to see “old” inventory.

Now the fall market is different from the spring market. You basically have 10 weeks to get into contract before Thanksgiving week, so everything is accelerated. You want to start with your best price. If you won’t start with your best price you need to be ready to lower it after 30 days or even 15 days if you are not getting a good number of showings.

Things are better on the buyers side. The fall market has an influx of new inventory, but be ready to move quickly if you see something you like. You also have some sellers that are more flexible in pricing as the sales year winds down. Don’t, however, make a ridiculous low-ball offer, they practically never work. The seller’s won’t counter them and then you either walk away or end up bidding against yourself with a ticked off buyer. You are better off working with your agent and figuring out what fair market value is for the house and start your opening bid at a price that is reasonable for FMV.

aug2016-4pie

Summary: Overall house sales in August were above our 10-year average. When you annualize them we are looking at about 658 sales for the year which is down a little from last year’s 678 sales. August has been busier than last year and I, and several other agents I’ve talked to, have seen a distinct increase in buyer interest the last couple of weeks.

Since the recession we never seem to have a “normal” year. This year is no different with sales skewed to the under $2M market. For the last two years our high-end sales have happened in the last 4 months of the year. So there is hope for the high end.