After two good months, October 2016 was back to average or at least the ten-year average number of sales in what is the strangest election year I’ve ever seen. Strange and uncertain does not make for a good real estate market. With the polling results tightening the outcome of the election is even more uncertain and this tightening hasn’t been good for a sales in October. In the last week we have had 12 sales, not bad for early November, but only one of the twelve sales was over $3 million, where we have more than half of our listings.
Once our private sales are added in we will probably be a little above our ten-year average of 41 October sales, but that after two good months for sales in August and September this year. October was not a bad month; it was just average.
Now in talking to Realtors the message is mixed. As Tuck Keating in our office said, “There’s a lot of activity, but not a lot of urgency.” November, along with February, is usually one of two slow months each year, but once the uncertainty of the election is over, I expect that we will actually have a pretty good November potentially even better than our October sales. Our sales also generally have an upturn in December as people do yearend deals and this year it all depends on Washington and to lesser, but significant extent, what the news is from Hartford.
The October sales that we did have are indicative of our two-part market. We only had three sales over $4 million and no sales over $10 million in October. On the contract side things are looking a little better. We have five contracts between $4 and $5 million and six contracts between $3 and $4 million. Unfortunately, over $5 million we only have one contract waiting to close and 167 houses in inventory.
|As of 11/1/16||Inventory||Contracts||Last Mo. Solds||Tot. Solds+ Contracts||YTD Solds||YTD+ Contracts||Mos Supply||Mos w/ Contracts||Last Mo. Annlzd|
Under $2 million our sales had recently been exceeding 2015, but when you look at a spreadsheet of how sales this October compared to October 2015 the reduced sales in October 2016 mean that we’re not as far ahead as we were before. Our biggest increase this year is from $600,000 to $800,000 where we are up 14 sales from 34 to 45 sales. Over $3 million we are down 38 sales from last year. On the good side as I said, we do have seven contracts waiting to close between $3 and $5 million.
|Oct. 16 vs. Oct. 15||Inventory||Contracts||Mo. Solds||Tot. Solds+ Contracts||YTD Solds||YTD+ Contracts||Mos Supply||Mos w/ Contracts||Mo. Annlzd|
When you look at the actual sales compared to our inventory you can see how strong the market has been all the way up to $2 million. We’re also seeing strengthening from $2 to $3 million, as we have 13 contracts waiting to close in that price range
Our months of supply also are indicative of this strength as we are under six months supply all the way up to $2 million; a seller’s market. Now that we are in November I think you’re going to start seeing high-end properties being taken off the market at a more rapid rate than usual. The result is that months of supply may drop even if sales don’t change that much. As reported last week there have been lots of hot sales in Greenwich this year.
Good properties, that are well priced are coming on and going off the market in less than a month and often for full list price or even over list price. The second half of November has traditionally been slow as people gear up for the Thanksgiving holiday, but this year may be an exception as once the election uncertainty is removed people who have been waiting may start signing contracts. If sales do pick up after the election you can expect to see some spirited bidding wars.
At the high-end we’ve seen some properties with significant price reductions and this is putting pressure on the relatively small number of high-end owners that either must sell or really want to sell this year. As these prices are lowered into the next high-end price bracket down sellers in that bracket come under more price pressure, the “cramdown” effect. The result of this is that at the higher end, prices will most likely will continue to come down as those people need to sell and some will price their houses to today’s demand level. Others will just sit tight and weather the market head winds. But don’t discount a black swan event (or more likely a small grey swan event). We don’t need a lot of sales for our high end market to rebound. A handful of sales above $5 million, and in the best of all worlds a dozen or two sales, would drastically change the feeling of this market.
I’m away for my 30th anniversary next week so I stopped by the Town Clerk’s office and voting took less than 5 minutes. Even if you can’t be here it’s easy to vote and here the polls are open from 6 am to 8pm. Your vote will help make the housing market a more certain place.