How Self-Driving Cars Will Change Greenwich?

Greenwich Sentinel

My weekly column in the Greenwich Sentinel this week was a little different. I took a look at what Greenwich might look like when self-driving cars are common in Greenwich. Will garages disappear?

Next week I’ll have the market report for April real estate sales in Greenwich. It looks like it is going to be another interesting month. My listing at 2 Bote Court listed at $1,449,000 got 4 calls on Friday and Saturday as the $1 – 1.5 million price range continues to be hot. (If you’d like to see it, the tenants will be out on Tuesday and it will be ready to show on Thursday after the Realtors open house. It’s just been painted white and looks very cool.)


Self-driving cars will change life in Greenwich as much or more than the change from horse drawn carriages to cars did.  In the next couple of years true self-driving cars will arrive in Greenwich and we are likely to be a leader in this new technology.

I say we are likely to be a leader in self-driving cars, because of a conversation I had with David Peabody of Peabody’s Automobiles before he died in 2015. David’s family’s business on Church Street has been around since Model-T’s were new. He used to man the pump there in front of Peabody’s Automobiles and was a very interesting fellow to talk to. He would tell stories about how Greenwich residents were pioneers in buying and driving some of the first cars.

Just as then, you can expect Greenwich residents to be the early adopters of many of these high-tech, and at least initially, high-cost cars. The Tesla’s we see so much of in Greenwich have a lot of the capabilities needed for full autonomous driving.

So, what changes will self-driving cars bring to Greenwich? More …

100 Greenwich, CT Open Houses on Sunday, April 23, 2017

If you want to see some beautiful trees in bloom, this is your weekend to go see some open houses in Greenwich, CT. We have an amazing 100 open houses on Sunday. The good thing is that we are getting some good new inventory on the market. Right now we have 617 single family homes on the market as recently as the beginning of March we only had 400 listing. With the increased listings we are also seeing increased sales. You can see my March report here.

So get out and enjoy the spring beauty and the many listings that are holding their first open house.

As always if you have any questions feel free to call me at 203-969-7900.

Greenwich, CT Open Houses

You can see the interactive map here.

Address Town Price Saturday
14 Coventry Lane Riverside $15,000 Sun 1-3 PM
636 Riversville Road Greenwich $40,000 Sun 1-3 PM
2 Homestead Lane  #112 Greenwich $379,000 Sun 1-3 PM
169 Putnam Park Greenwich $399,000 Sun 1-3 PM
53 Putnam Park  #53 Greenwich $415,000 Sun 1-3 PM
193 Putnam Park Greenwich $452,500 Sun 1-3 PM
188 Putnam Park Greenwich $465,500 Sun 1-3 PM
40 W Elm Street 5 C Greenwich $499,000 Sun 1-3 PM
47 Nicholas Avenue Greenwich $529,000 Sun 2-4 PM
31 Cary Road Riverside $549,000 Sun 1-3 PM
245 Byram Road Greenwich $549,500 Sun 2-4 PM
47 Nicholas Avenue Greenwich $599,000 Sun 2-4 PM
31 Windy Knolls Greenwich $699,000 Sun 1-3 PM
71 Richland Road  #A Greenwich $699,000 Sun 1-4 PM
45 Francis Lane Greenwich $749,000 Sun 1-3 PM
112 Pemberwick Road Greenwich $779,000 Sun 1-4 PM
1015 North Street Greenwich $819,000 Sun 2-4 PM
82 Silo Circle  #82 Greenwich $839,000 Sun 1-3 PM
25 Valley Road Unit  #25 Cos Cob $849,000 Sun 1-3 PM
49 Grey Rock Drive Greenwich $929,000 Sun 11-1 PM
21 Hoover Road Riverside $935,000 Sun 2-4 PM
40 Cassidy Street Greenwich $945,000 Sun 1-3 PM
25 Indian Harbor Drive  #9 Greenwich $950,000 Sun 1-3 PM
89 Loughlin Avenue Cos Cob $950,000 Sun 1-3 PM
48 Spring Street  #5 Greenwich $985,000 Sun 2-4 PM
12 Georgetowne North  #12 Greenwich $1,184,000 Sun 1-3 PM
44 Valley Road B Cos Cob $1,295,000 Sun 2-4 PM
28 Powell Street Greenwich $1,299,000 Sun 1-3 PM
85 Bowman Drive Greenwich $1,325,000 Sun 1-4 PM
150 Pemberwick Road Greenwich $1,349,000 Sun 1-3 PM
219 Glenville Road Greenwich $1,349,000 Sun 1-4 PM
15 Heusted Drive Old Greenwich $1,349,000 sun 3-5 PM
7 Cherry Valley Road Greenwich $1,395,000 Sun 1-3 PM
61 Hunt Terrace Greenwich $1,475,000 Sun 2-4 PM
66 Valleywood Road Cos Cob $1,495,000 Sun 1-3 PM
16 Idar Court  #A Greenwich $1,499,999 Sun 1-3 PM
20 Sunshine Avenue Riverside $1,549,000 Sun 1-3 PM
12 Laddins Rock Road Old Greenwich $1,549,000 Sun 12-3 PM
3 Nutmeg Drive Greenwich $1,549,500 Sun 12-3 PM
14 Tyler Lane Riverside $1,549,900 Sun 1-3 PM
636 Steamboat Road  #2b Greenwich $1,550,000 Sun 12-4 PM
16 Idar Court  #B Greenwich $1,599,999 Sun 1-3 PM
13 Linwood Avenue Riverside $1,649,000 Sun 1-3 PM
17 Tory Road Riverside $1,749,000 sun 12-2 PM
311 Cognewaugh Road Cos Cob $1,785,000 sun 3-5 PM
112 Patterson Avenue Greenwich $1,795,000 Sun 1-3 PM
1 Finney Knoll Lane Riverside $1,795,000 Sun 1-3 PM
315 Field Point Road Greenwich $1,795,000 Sun 1-4 PM
35 Turner Drive Greenwich $1,795,000 Sun 1-4 PM
17 Oval Avenue Riverside $1,795,000 Sun 2-4 PM
56 Londonderry Drive Greenwich $1,799,000 Sun 1-3 PM
73 Pemberwick Road Greenwich $1,800,000 Sun 2-4 PM
58a Orchard Cos Cob $1,845,000 Sun 12-2:30 PM
570 North Street Greenwich $1,900,000 Sun 1-3 PM
16 Wyngate Road Greenwich $1,995,000 Sun 1-3 PM
116 Pecksland Road Greenwich $2,100,000 Sun 1-4 PM
19 Saint Claire Avenue Old Greenwich $2,199,000 Sun 2-4 PM
38 Jones Park Drive Riverside $2,250,000 Sun 2-4 PM
38 Jones Park Drive Riverside $2,250,000 Sun 2-4 PM
323 Sound Beach Avenue Old Greenwich $2,370,000 Sun 1-3 PM
25 Copper Beech Road Greenwich $2,388,000 Sun 2-4 PM
6 Interlaken Road Greenwich $2,495,000 sun 12-2 PM
15 Hycliff Road Greenwich $2,650,000 Sun 1-4 PM
151 Milbank Avenue  #3 Greenwich $2,650,000 Sun 2-4 PM
31 Chapel Lane Riverside $2,695,000 Sun 1-3 PM
10 Shady Brook Lane Old Greenwich $2,695,000 Sun 2-4 PM
696 Lake Avenue Greenwich $2,695,000 Sun 2-4 PM
20 Dewart Road Greenwich $2,750,000 Sun 1-4 PM
11 Grimes Road Old Greenwich $2,750,000 Sun 11-1 PM
137 Clapboard Ridge Road Greenwich $2,750,000 Sun 12-4 PM
151 Milbank Avenue  #2 Greenwich $2,795,000 Sun 2-4 PM
7 Ricki Beth Lane Old Greenwich $2,850,000 Sun 1-4 PM
151 Milbank Avenue  #4 Greenwich $2,875,000 Sun 2-4 PM
151 Milbank Avenue  #1 Greenwich $2,975,000 Sun 2-4 PM
45 Burying Hill Road Greenwich $2,995,000 Sun 1-3 PM
323 Cognewaugh Road Cos Cob $2,995,000 Sun 2-4 PM
34 Hendrie Avenue Riverside $3,095,000 Sun 2-4 PM
50 Hillcrest Park Road Old Greenwich $3,100,000 Sun 11-1 PM
9 Game Cock Road Greenwich $3,199,000 Sun 2-4 PM
43 Grahampton Lane Greenwich $3,250,000 Sun 1-4 PM
14 Sherwood Farm Lane Greenwich $3,395,000 Sun 1-4 PM
99 Hunting Ridge Road Greenwich $3,395,000 Sun 10-1:30 PM
106 Lockwood Road Riverside $3,795,000 Sun 1-4 PM
9 Roberta Lane Greenwich $3,895,000 sun 12-2 PM
54 Mallard Drive Greenwich $3,925,000 Sun 1-4 PM
14 Coventry Lane Riverside $3,995,000 Sun 1-3 PM
82 Cat Rock Road Cos Cob $3,995,000 Sun 1-4 PM
20 Alpine Road Greenwich $3,995,000 Sun 2-4 PM
61 Winding Lane Greenwich $4,200,000 Sun 1-3 PM
4 Jones Park Drive Riverside $4,295,000 Sun 1-3 PM
79 Pecksland Road Greenwich $4,497,500 Sun 1-3 PM
636 Riversville Road Greenwich $4,595,000 Sun 1-3 PM
5 Indian Head Road Riverside $5,350,000 sun 12-2 PM
34 Club Road Riverside $5,495,000 Sun 1-3 PM
35 West Way  Old Greenwich $5,495,000 Sun 1-4 PM
38 Dairy Road Greenwich $5,495,000 Sun 12:30-3:30 PM
33 Vineyard Lane Greenwich $7,395,000 sun 2:30-4:30 PM
11 Cove Road Old Greenwich $7,995,000 Sun 1-3 PM

The Anti-Greenwich Tax Bill

A bill has been introduced in the Connecticut legislature which, if it is passed, will do great damage to the Greenwich housing market in a wide variety of price ranges. HB No. 7313 proposes to put a 19% surcharge on “income derived from investment management services”. This bill proposes to raise the Connecticut income tax to make up for the so-called carried interest revenue difference. Many investment management funds are set up so that the managers’ payments are taxed as capital gains.  The capital gains tax rate is 20% at the federal level and the maximum federal income tax rate is 39.6%. The idea behind the Connecticut tax is to tax investment managers for nearly the full difference between these two federal tax rates and have all the taxes go to Connecticut.

The authors of this bill realize that such a tax could encourage Connecticut investment managers to relocate to New York. So, the tax bill has a curious provision which provides that the 19% surcharge shall only be applicable in tax years where New Jersey, New York and Massachusetts have enacted substantially similar laws. The thinking seems to be that if the whole region is taxing investment managers at this rate then there won’t be an incentive to move between the states within the region. It’s not clear how this will prevent a move to Florida.

Now given this curious multi-state provision, some may see the proposed bill as a tempest in teapot. The problem with this bill is that it is only the worst of many efforts that have been made in the last few years to tax our wealthiest residents to make up for significant budget shortfalls.

Year Total Sales Total $ Difference
2003 45 $315,003,775
2004 73 $594,889,596 $279,885,821
2005 84 $674,754,878 $79,865,282
2006 85 $642,652,350 -$32,102,528
2007 113 $904,030,500 $261,378,150
2008 53 $467,504,500 -$436,526,000
2009 43 $383,193,112 -$84,311,388
2010 43 $417,500,875 $34,307,763
2011 52 $434,116,771 $16,615,896
2012 70 $542,890,550 $108,773,779
2013 53 $422,155,000 -$120,735,550
2014 72 $666,770,298 $244,615,298
2015 60 $465,171,045 -$201,599,253
2016 35 $267,660,990 -$197,510,055
Grand Total 881 $7,198,294,240

 

The idea of many legislators is that the wealthy residents can afford it and that ratcheting up the high-end tax rate percentage will result in the same percentage increase in tax revenues. While that is true up to a point it appears that point was passed sometime around 2014 when high net worth taxpayers starting to vote with their feet.

Over $5 million dollars sales in Greenwich 2003 - 2016

Over $5 million dollars sales in Greenwich 2003 – 2016

In 2014, we had 72 sales over $5 million, which was the largest number of sales since the pre-recession boom year of 2007. In that year, those 72 home sales generated $666,770,298 in sales revenue. The following year, however, sales dropped to 60 houses and $465,171,045. In 2016, we had only 35 sales over $5 million which totaled $267,660,990. The total revenue drop in those two years was just shy of $400,000,000.

The direct consequence of the reduced sales is a significant loss of property conveyance tax for both the Town of Greenwich and the State of Connecticut. However, these are minor taxes compared to the huge amount of lost personal income tax that the reduced sales to high income individuals represents. You also have lost sales tax and fewer local charitable contributions.

Several of our wealthiest homeowners are no longer Connecticut citizens. Most of the people in these income levels who can afford high-end homes in Connecticut have more than one home and often two or three. For these folks who spend more than six months in another state, Florida is popular given that it has no income tax, to eliminate their Connecticut tax burden.

It’s not quite that simple as it is a multi-factor test as to what state gets to tax you as a resident. At one point the DRS was looking at whether investment managers were still making contributions to local charities as a factor to determine if the manager was still a Connecticut resident. As a result, people were encouraged by their accountants to stop giving to local Connecticut charities. Luckily, the Connecticut legislature got the DRS to reverse their position (see DRS PS 2106-3).

And, while the focus is on the very highest earners, there are hundreds of mid-level managers and traders who make good salaries who are not headline worthy. If firms continue to move out of state, we lose many of these folks. All of the suppliers of these companies, the people doing renovations and even the local grocer get a lot of business from these companies and their employees.

You would think that the state would be trying to grow the pie rather than taking a bigger piece of a shrinking pie. It’s an industry of highly educated, high earning people who don’t overly tax the state’s infrastructure and don’t cause pollution problems. The problem is that Connecticut is two very different states. In Greenwich, our median home price is around $1.6 million, while for the state as a whole, the median home price is around $240,000 or 15% of prices here and that is the median price, meaning half of the homes sell for less than that amount.

Connecticut has a lot of citizens with real needs, but raising taxes has become a negative sum game. If you’d like to do something, write to Greenwich’s Senator Frantz or Representatives Floren, Camillo and Bocchino. They understand these issues well, but they need real life experiences and clear opposition to this method of solving the state’s budget problems.

We need to turn Connecticut back into a state that attracts the top investment managers and companies as it has done for the last three decades. It is a good solution for everyone.

March 2017 Greenwich Real Estate Report

  • Sales take big jump in March up 60% over last March
  • $1 – 1.5M and $2 -3M are busiest segments
  • Contracts down slightly as many sales close in March

March 2017 was a good month for sales with sales up 58% over last year. We had 52 single family home sales in March which was up by 23 sales over March 2017. Sales were concentrated from $1 – 3 million with 30 of the 52 sales falling in that range.  Our contracts were down slightly from 93 at this time last year to 83 this year, but this is to be expected when you have so many sales.

March Sales, Inventory, Contracts & Months of Supply

04/01/17 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 4 3 2 5 4 7 3.0 2.6 2.0
$600-$800K 11 12 6 18 8 20 4.1 2.5 1.8
$800K-$1M 18 6 2 8 7 13 7.7 6.2 9.0
$1-$1.5M 50 12 12 24 32 44 4.7 5.1 4.2
$1.5-$2M 72 10 7 17 17 27 12.7 12.0 10.3
$2-$3M 111 17 11 28 28 45 11.9 11.1 10.1
$3-$4M 83 15 3 18 12 27 20.8 13.8 27.7
$4-$5M 61 2 2 4 5 7 36.6 39.2 30.5
$5-6.5M 61 4 4 8 8 12 22.9 22.9 15.3
$6.5-$10M 59 2 2 4 2 4 88.5 66.4 29.5
> $10M 37 0 1 1 2 2 55.5 83.3 37.0
                   
TOTAL 567 83 52 135 125 208 13.6 12.3 10.9

Our inventory was also down slightly from last year with 567 house listing, but this was a very nice rise from February when we only had 475 listing. We have 33 listings under $1 million with most of these on the west side of town, which makes for very tight supply. Under $800,000 we only have 15 listings and when you annualize the sales we had in March we have less than a 2 month supply of inventory.

Sales.SFH.2015-Mar2017.040517

March 2017 vs. March 2016

17 vs ’16 Inventory Contracts Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Mo. Annlzd
< $600K 1 1 2 3 0 1 0.75 0.32  –
$600-$800K -4 6 4 10 -3 3 0.03 -1.50 -5.67
$800K-$1M -2 0 -1 -1 -4 -4 2.26 0.94 2.33
$1-$1.5M -3 -2 5 3 13 11 -3.68 -2.11 -3.40
$1.5-$2M -2 -6 1 -5 0 -6 -0.35 1.91 -2.05
$2-$3M 14 -7 8 1 16 9 -12.36 -1.03 -22.24
$3-$4M -11 3 -1 2 1 4 -4.89 -4.56 4.17
$4-$5M 9 -3 0 -3 1 -2 -2.40 13.21 4.50
$5-6.5M -8 -1 4 3 4 3 -28.88 -11.63  –
$6.5-$10M 5 1 1 2 -1 0 34.50 5.63 -24.50
> $10M -9 -2 0 -2 0 -2 -13.50 31.50 -9.00
 
TOTAL -10 -10 23 13 27 17 -4.06 -1.33 -8.99
Pro-Seller Pro-Buyer

Overall March was good news for sellers with sales up, inventory down a little and months of supply down significantly from last March. When you look at the individual price ranges and neighborhoods there is a much more nuanced story to tell.  For example, from $4 – 5 million our inventory was up 9 listings, contracts were down 3 and sales were flat. Sales are also not evenly distributed throughout the town.

The dramatic jump in March sales follows just average sales in February and is more in line with our traditional average with low sales in February bracketed by a good January and March, which was not the case in 2015 and 2016. January often has good sales as people want to move their capital gains into the next year to put off paying taxes to the following year.

March also traditionally has had a rebound as the financial community spends their year-end bonuses. As more bonuses are given in stock and deferred compensation this spring bump up has been smaller and we see the same thing this year. We did have four March sales between $5 and 6.5 million, but we didn’t see a similar jump over $6.5 million where we have 96 houses in inventory and only four sales YTD.

The sales from $1 – 1.5 million really stand out with 32 sales so far this year. We have 28 sales from $2 – 3 million which is good, but we have more than double the inventory with 111 houses on the market compared to 50 houses from $1 – 1.5 million. Now the good news is that we have 32 contracts between $2 and $4 million so this segment will continue to do well.

Mar2017.Sales.Inv.Cur.Ks.040217

When you look at months of supply our under $800K market is remarkably tight and when you look at contracts it is only likely to get tighter unless we have a big influx of inventory which is unlikely. Inventory coming on lead sales at this time of year so you can expect that months of supply will stay up for price ranges above $3 million.

Mar2017.MoS.040217

The good sales from $5 – 6.5 million make that price category a stand-out in the high-end market. We have had 8 sales and with 4 contracts this price range has kept pace with the inventory coming on the market. This is the only high-end price range with less than 2 years of supply.

When you look at the market in segments our market under $1 million is 6% of our inventory, but 14% of our sales and would be higher if we had more inventory. Houses in this price range that don’t go to contract in less than 60 days usually have some issue or another that is slowing their sale.

Mar2017.4Pie.040517

In our mid-market from $1 – 3 million our inventory is 41% of our market and our sales are 62% of sales. Above $4 million we have 53% our inventory, but only 24% of our sales. One promising area is the contracts from $3 – 4 million where we have 15 contract waiting to close so we should see a good April for this price range.

So, over all the first quarter is looking good. Sales YTD are up 13 sales from 2016 to 135 sales. We have a good number of contracts and we are finally getting the fresh inventory we need.

High-End Open Houses: Buyers are busy, but then so are sellers. Last weekend we had over 100 open houses or almost one out of every five listings on the market were open to the public. One reason we had so many open houses is that we are seeing open houses at the high-end. Of the hundred plus open houses last weekend, sixteen were over $4 million dollars.

Owners often fear that a bunch of unqualified, house voyeurs will show up to gawk, but this very rarely happens. What’s interesting is how self-selecting the people who come to these open houses are. To the extent an agent can ever know, these open house attendees look and sound qualified. High-end open houses get only a handful of open house attendees, but they are often worth doing and they do not open the flood gates to hordes of people. As a result, open houses are becoming a useful tool to market these homes.

Getting your house ready for showing – Repairs & Renovations

There are a surprising number of people in Greenwich that are embarrassed about their upstairs bathroom. I’ve had clients who don’t want to list their house until the bathroom has been fully renovated and is at least as nice as the powder room for guests on the first floor. They just don’t want other people, and particularly the neighbors, seeing how bad that bathroom is.

Now a truly disgusting bathroom, what I call a bad memory point, really needs to be fixed before listing. Often though the bathroom is just old and worn. The issue then becomes what to do. What you don’t want to do is to do the cheapest job that you can.  The result is a bathroom where the material and the workmanship don’t match up with the rest of the house. The buyer will usually look at the bathroom as a complete renovation just as they did before the owner paid for the work, since the buyer will rip out all of the work that was just done. They will then then replaces it with the style and quality of material that they want and that fits in with the rest of the house.

So what should you do? Well the first thing to do is to get rid of as much clutter as possible. Have a yard sale or even two sales, give away a lot of stuff to the kids, throw away everything you are not going to move, and box up the rest and put it in neat order in the attic, basement or garage.

Once you’ve gotten rid of as much stuff as you, can hire a professional to clean the whole house. One area that is vital, but often overlooked are cleaning the windows inside and out. Nothing will brighten up a house and show off the yard like crystal-clear windows. Also if you have any pet, cooking or smoking odors get a specialist to eliminate these odors.

Repair or replace anything that is broken or missing; such as missing bathroom tiles, bricks without mortar, cracks in walls and potholes in driveways. Two things that you can do that can make your house standout from the competition is to paint the walls and refinish the floors, particular those rooms near the front door.  (I’ll leave staging, which I recommend, to another article.)

As to determining what renovations you should do before putting your house on the market, the short answer is it varies greatly from house to house. Curiously, renovations are most helpful for houses at the high-end and low-end of the market and can be the deciding factor as to whether a buyer makes an offer or not.

At the high-end we have lots of beautiful houses, so anything that looks old and worn is going to be at a major competitive disadvantage. Certainly, repair anything that is broken, but you might want to consider a new kitchen or new master bath if they are badly out of date. If you are planning on staying in the house should it not sale, there’s no reason not to do these renovations since you can enjoy them yourself and they may just be what gets you an offer.

Under $800,000 renovations can also be offer determinative, because these are costs that a first time buyer or downsizer won’t have to pay. So once again the renovation may be outcome determinative. Between $2 million and $4 million the question of renovation is more complicated as most of the buyers will be able able to pay for or finance the renovations that they want to do. Buyers at these price points are also more particular about style so a significant renovation might actually make the pool of buyers smaller as the renovations are not be to the taste of a particular buyer.

I often work with an architect or a contractor in discussing what work might make for the quickest and highest sale. If your house isn’t selling, taking the team approach as to what renovations would make it more saleable can be very useful. Recently, a house in Cos Cob that hadn’t sold and was rented came back on with a newly finished basement. It was a big plus.

Getting multiple ideas from a couple contractors can be a big help in selling your home for the best price.