There is a real estate market in Greenwich that practically no one talks about and that has more transactions than we have single-family home sales. Last year we sold about 640 single-family homes, but we had 809 rentals that were done through the Greenwich. MLS. During the recession years the rent versus buy equation shifted toward rentals. In 2009, we had we had 959 rentals and only 370 sales. By the following year in 2010 rentals peeked at 962 rentals and sales had recovered to 549 sales.
So far, this year we have had 456 rentals, which if you annualize this number would equate to 829 rentals or about the same as last year. The one thing we have seen this year is a slight shift to higher-end rentals with rentals from $4,000 to $10,000 up slightly as well as rentals over $18,000, but this could change in the second half of the year.
Now there are a lot more rentals than appear on Greenwich MLS. Particularly, under $2000 most rentals are done either in the classifieds in the newspaper or on Craigslist. Under $2000 we have between 100 and 150 rentals per year on the GMLS. At this price range, the units include everything from one room garage and basement apartments to smaller condos throughout town.
The heart of our market however is between $2,000 and $4000. Last year we had 327 rentals out of the 809 Rentals listed on the Greenwich. MLS. This number has gone as high as 375 rentals in 2009. In this price range, you’re mainly looking at condos and apartments, though you do occasionally find some smaller houses for rent.
|Price Range||07||08||09||10||11||12||13||14||15||2016||17 Anlzd||17 YTD
||10 Yr. Avg.||Post-Rec. Avg||17 Anlzd vs. 16|
|$ 2 – 4K||270||302||375||357||333||276||317||262||301||327||287||158||312||300||-40|
|$4 – 6K||116||142||177||148||161||152||174||160||153||159||178||98||154||162||19|
|$6 – 10K||55||75||79||93||84||85||74||83||81||86||113||62||80||87||27|
We still have a good number rentals up to about $6,000. Above that price we mainly have single-family homes and the number of listings drops significantly. Last year over $18,000 we only had 20 rentals. (They were, however, really nice rentals.) At the high-end these numbers should also be taken with a grain of salt since some of them represent summer rentals on Long Island Sound at a much higher monthly rate.
We have a distinct seasonality in our rentals, though not as dramatic as we do for residences. Rentals peak in May and are slower from September to February. We also have a little bump up in August as people rent places before the start of the school year and also before the start of new jobs for recent grads.
So, who rents their property in Greenwich Connecticut. A surprising number of properties are rented by local Greenwich entrepreneurs and real estate investors. The listing at 2 Bote Court was bought by a family that lived there for over a decade and then decided to hold it for both sale and for rent. The house was updated with a new kitchen, master bath and a Nest thermostat system throughout the house.
The house is on the market at $6,900 per month and is 3,000 s.f. on 0.42 acres. It is close to Central Middle School, Greenwich High School, and Greenwich Country Day. It is also for sale for $1,400,000.
Real estate rental property not only generates rental income but also depreciation which you can offset against the property’s income sheltering that income for taxes. At sale, however you may well have to recapture this depreciation deduction when you sell. In addition, rental properties are held for appreciation and provide asset allocation for owner’s investments.
So, who are the tenants for these places? We have young couples who buy a bigger house than they might otherwise be able to afford and rent out part of it for income to pay for their mortgage. We have seniors who like that someone else is on the property with them. We also have people who get transferred overseas and want to rent out the property because they want to come back to Greenwich. You also see the parents of college kids rent out their kids’ bedrooms.
In Greenwich people are always allowed to have tenants in their house unless restricted by a condominium association. While most rentals in Greenwich are for a year we have a surprisingly robust Airbnb market in Greenwich with over 300 listings. So far, the short-term tenants have not proved to their neighbors.
Two rental provisions provided by planning and zoning regulations that are often forgotten are the senior accessory apartment and the affordable accessory apartment. The senior accessory apartment allows you to put in a second kitchen, which is otherwise prohibited in the R-7 and larger zones. For the senior accessory apartment, the tenant or the landlord is over 62 years old.
The affordable accessory apartment does not have an age limit but does have an income limit on either the landlord or the tenant. I helped write this regulation and it would be a great way to help meet the state mandate for accessory housing. Were we to meet that mandate, developers couldn’t come in with affordable proposals to put in higher density housing in areas that are zoned for lower density housing.
We have a very robust rental market with listings coming and going quickly. If you can’t find what you want just wait a bit.