Backcountry Greenwich gets a lot of attention in town for its 4 acre zoning and some very high sales prices, but there is another area in town that is similar, has more sales and for the moment a higher average price and that is the 2-acre zone. The RA-2 zone runs along the south side of the Merritt Parkway about halfway down to the Post Road. It also includes three small areas; a section just west of the Merritt Parkway on the NY border, the area around Field Point Circle and an area on Mead Point. These last two areas account for some major high-end sales, but in any given year only contribute a handful of sales. So for most purposes the 2-acre zone is a stand-in for upper mid-country.
In the RA-2 zone the floor area ratio is 9% versus 6.25% for the for 4-acre zone. This means that the above ground portion of the house is limited to 9% of two acres or 7,841 s.f. The FAR does not count the size of the basement, so developers these days include a fully finished basement often with 10-foot ceilings. The size of the resulting structures is usually in the 8,500 s.f. to over 10,000 s.f. Given that only 16 out of 437 houses that have sold this year are larger than 10,000 s.f. the bottomline is that most people can get a house as big as they want in the 2-acre zone.
With one notable exception the average sales price in backcountry and mid-country have fought each other for pre-eminence from 2000 to the present. Some years mid-country had a higher average price other times it was backcountry. The one exception is the period from 2006 to 2010 when the average sales price in backcountry exceeded mid-country’s average sales price by as much as $1.78 million in 2009.
The 2017 average priced house in the RA-2 zone is $3,158,622 this is down from $3,347,559. The least expensive house in RA-2 zone sold so far this year sold for $935,000 for a house on a non-conforming 3-acre lot, while the highest sale was for $13,065,000 for a house on an 8.1 acre lot on Meadowcroft Lane. We are seeing an uptick in demand for the 2-acre zone as some people who pre-recession might have bought in the 4-acre zone north of the Merritt Parkway now want to live closer to town on somewhat smaller lots and the 2-acre zone meets their needs.
Post-recession the number of sales in the RA-2 / Mid-country area averaged 89 sales each year with a total sale volume averaging $320,000,000. The average sale price in the RA-2 zone in 2017 has been $3,158,622. This is down slightly from 2016 where the average sales price was 3,347,559.
The average price for a single family home in the RA-2 zone in 2015 was even higher at $3,921,555, but this apparent drop in the value of house in the RA-2 zone is more attributable to the change in the mix of what is selling rather than a drop in all house values. From year to year each individual price range may be up or down resulting in change in both the average and the median price.
In addition, the very highest price range, the over $10 million market, has a disproportionate influence on the average. For example, the highest sale in 2015 was for $26,000,000, while in 2017 our highest sale so far in the RA-2 zone has been for “only” $13,065,000 or just half of the highest sale in 2015. From 2000 to October 2017 our highest sale, with one exception was the Helmsley place which sold for $39,500,000.
These very large sales can significantly distort averages from year to year. The one exceptional sale that show this is the sale of Copper Beach Farm, a 50 acre estate on Long Island Sound that sold for $120,000,000 or more $80 million more than any other residential property in Greenwich. That property has been excluded from this analysis as including it would have single-handily raised the average sale price of all RA-2 sales for 2013 by $1.3 million.
Another factor that plays into a market analysis for the subject properties is that these properties are new construction and there is greater demand for new construction and much less inventory.
From 2000 to 2007 we averaged 10 new houses a year in the RA-2 zone sold on the Greenwich MLS. From 2011 to 2017 we have averaged only 3 new houses a year in the RA-2 zone. Now this only counts the house that were publicly listed, so called “spec” houses. In fact. in 2013 not a single new house was built for speculative sale in all of the RA-2 zone. At the same time there were dozens of custom houses built for individual owners.
The problem was not a lack of demand for new spec homes. New houses in the RA-2 zone sold for an average of $90/s.f. more than previously occupied houses in that zone so people were willing to pay a premium for new homes. The problem has been financing. Getting financing for owner-occupied housing has not been a problem, but it has been for speculative houses.
Overall demand in the RA-2 zone has been good all the way up to $6.5 million. Generally, we see months of supply rising from the lowest to the highest priced home going from 3 – 5 months of supply under $1 million to several years of supply over $10 million. (see Appendix XII.B. below.)
|RA- 2 zone
(As of 9/2/17)
|Inventory||Contracts||Last Mo. Solds||Tot. Solds+ Contracts||YTD Solds||YTD+ Contracts||Mos Supply||Mos w/ Contracts|
In the RA-2 zone we see a similar pattern with one anomaly. Sales from $4 – 6.5 million in the RA-2 zone are doing particularly well in the 2-acre zone and as they have in the rest of the town. The steady rise in the stock market over the last 12 months, regularly setting new record highs, has encouraged buyers with substantial portfolios to buy this year. Sales have climbed through the year in the high-end price ranges as the year goes on.
This is reflected in the months of supply for the price range from $5 – 6.5 million which is down 24 months this from 44 months last year to only 20 months of supply. A drop in months of supply by two years is a dramatic drop. Now 20 months of supply might seem like a lot of months of supply, but the higher the price the longer that houses take to sale leading to these higher numbers. The drop in inventory and increase in sales in this price ranges shows a competitive market.