By Mark Pruner
Douglas Elliman – Greenwich
firstname.lastname@example.org – 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.
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|
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|
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.
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.
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.
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.