Inventory Down, Contracts Up & $2 – 4M Looking Good
By Mark Pruner
Douglas Elliman – Greenwich
firstname.lastname@example.org – 203-969-7900
- Contracts up 32% year over year with spike from $2 -4 million
- Heavy activity as buyers rush to do deals before interest rates rise
- High-end market gets off to a good start
January 2017 was an okay month for sales in Greenwich, but an excellent month for contracts. Our contracts as of the end of this February were up 21 over February 2016 jumping from 65 contracts last year to 86 contacts this year. More than half of this increase in contracts was in the price range from $2 – 4 million where contracts up by an even dozen.
February Sales, Inventory, Contracts & Months of Supply
|Inventory||Contracts||Last Mo. Solds||Tot. Solds+ Contracts||YTD Solds||YTD+ Contracts||Mos Supply||Mos w/ Contracts||Last Mo. Annlzd|
Our inventory was down significantly from last year with only 475 listings down from 493 listings last February. Of this drop of 18 listings, 16 were between $800K and $2M. Our sales and contracts are about the same in this price range, so the drop in inventory was the main factor in significantly lower months of supply from $800K – $2M. From $1 – 1.5M we have a remarkably low 3.6 month of supply.
February 2017 vs. February 2016
|2/17 vs. 2/16||Inventory||Contracts||Mo. Solds||Tot. Solds+ Contracts||YTD Solds||YTD+ Contracts||Mos Supply||Mos w/ Contracts||Mo. Annlzd|
When you look at contracts in all price ranges, the other area that jumps out at you is the $2-4 million price range where we are up 12 contracts from last year and our closed sales are up 9 houses from last year. In this $2 – 4 million price range we have 21 contracts in the queue. As these sales close over the next two months we will continue to see good sales in this price range.
Now overall, February sales were down 8 houses from last year, but this is not overly worrisome as February 2016 was a record month for February sales. Our 10-year average for February is 30.9 single family home sales so 29 is not far off the average. The drop in sales from 2016 is fairly evenly distributed across the price ranges. We also had a good January so we are still up for the year in sales.
We may even be seeing a bit of a supply constraint in sales, since the small drop of sales in most price ranges roughly corresponds with the drop in inventory in those same price ranges. Two other positive indicators, albeit purely anecdotal, are a good numbers of showings and significantly higher open house attendance.
If you look at just the inventory compared to the first two months of sales it looks like we have plenty of inventory, but that’s not the case from many buyers’ viewpoint. By the time they pick a price range, a neighborhood, a housing condition and a style of house there may be only a handful of houses that fit their desires. As a result, houses that have been on the market for a good period are selling.
Old inventory is also being absorbed. A third of our 158 sales and contracts in 2017 were for houses that have been on the market for more than 8 months. We even had 22 sales that were on for more than a year. The record holder so far for 2017 was a house that had been on and off the market since 2010 and sold in January after 1,233 cumulative days on the market.
For buyers being prepared with information and financing is key. We have inventory coming on every day in the Greenwich spring real estate market, albeit a little slower than last year, but it is going to contract faster than last year, so email alerts of new listings are crucial.
I used to set up alerts to go to clients 2 – 3 times per week, now I set them up so they get new listings within 5 minutes of them going on the Greenwich MLS. The sooner the buyer has an accepted offer in hand the fewer competitors they have, since most buyers won’t go see a listing with an accepted offer. In Greenwich, however an accepted offer doesn’t mean the buyers can relax. The rule here is that the deal is not binding until the contract is signed. Buyers need to have their inspectors, bankers and attorneys lined up before the offer is accepted not after. In a busy market, like this, they need to cut every day possible off of the time period from accepted offer to signed contract.
If the market follows the Dow as it has been doing this could be a very interesting year for buyers and sellers.