Greenwich Neighborhoods – Who’s Up and Whose Down

This year has been different from prior years with more transactions and less inventory at the higher end and fewer sales and more inventory in the heart of our market from $1 – $3 million. The result is that our neighborhoods have seen a shift in activity levels and demand.

Greenwich Neighborhood Real Estate Activity – April 2018

Greenwich Neighborhood Real Estate Activity – April 2018

South of the Parkway

The largest number of listings in the GMLS system is South of the Parkway which extends all the way from the Merritt to the Post Road (except for those parts in another neighborhood like Old Greenwich or Glenville.) I tend to think of it as a shorthand for the mid-country one and two-acre zones, but it also includes other zone. As usual this area has the most listing with 211 listings or 38% of all our listings.

This area has the highest average price of any area in town with $3.18M and the most sales with 46 sales. It also has our lowest appreciation rate when you compare the sales to the Greenwich Tax Assessor’s assessment as of October 1. 2015. The assessment ratio is 70% so if prices had not changed at all the Sales Price/Assessment ratio would 1.42 the reciprocal of .70. For this area the assessment ratio is 1.52 which is only 7% appreciation in 2.6 years, but the good news is that it is appreciation.

North of the Parkway

North of the Parkway is doing better this year, primarily because our high-end market is doing better this year. You can see this, because this area had a sale for $11,100,000 and it still only came in third. Both Riverside with a $14.5M sale and South of the Parkway with a $12,075,000 came in above the northern section of town. North of the Parkway did have nearly the highest average with $3,171,630 compared to South of the Parkway’s average of $3,180,354. These nearly identical high averages bode well for the northern half of the town. Together these two areas represent almost 2/3rds of our listings so this improvement in the higher end is good news for the town.

North of the Parkway still however has some ways to go on the sales side as the 113 houses listings there constitute 24% of all our listings, but only 7% of the sales. The good news for backcountry is that the trend is in the right direction. In fact, backcountry has the second highest appreciation SP/Assmt ratio at 2.04 or 89% appreciation, but this, like all early season numbers in this article, factors in the effect of a few anomalous sales which causes averages to swing wildly in the first half of the year. With only 10 sales, I don’t think Old Greenwich needs to worry that they will have less appreciation than backcountry by the end of the year.

Old Greenwich & Riverside

Old Greenwich and Riverside are actually pretty diverse when it comes to real estate. Prices so far this year have varied from $740,000 to the aforementioned high sale of $14,500,000. Each area is just under 9% of our inventory, while on the sales side OG is 12.5% of sales and Riverside an even more competitive 15.8% of sales, so both areas are still quite popular. As you might expect their sales price to original list price ratio is also quite high at around 93% compared to 91% for the town-wide average.

As between the two areas, you can see some of the popularity shift towards Riverside as we’ve seen the last couple of years. We have greater sales in Riverside than in Old Greenwich, 24 houses to 19 houses and a higher average price of $2.7M in Riverside compared to $2.2M in Old Greenwich. They are still premier places to live in the NY metro areas and demand exceed supplies supply which is what drives these high average sales price.

Cos Cob & Glenville

Unlike north and south of the parkway and OG and Riverside these two areas are not contiguous, but buyers who look in one area often look in the other area across town. These two areas have not reached the heady averages of OG and Riverside, but they are headed that way. Cos Cob has a higher average price at $1.71M compared to Glenville’s $1.02M, but Glenville sales have fewer days on market and a slightly higher sales price to original sales price ratio.

Both areas are smaller with limited inventory, however, when you compare the percentage of sales to the percentage of inventory town wide, the sale percentage is 3 – 4 times more than the inventory percentage. We seen more inventory in $1 – 1.5 million range this year and slightly slower sales so these ratios are down a little bit from prior years.

Summary

Compared to last year our inventory is up and so are our contracts, while our sales are about the, albeit with a shift to the higher-end.  The movement of people from Westchester is also starting to build. I recently did an open house at 108 Pecksland which is on for $2.3M; we had 9 groups come through and 6 of those were from Westchester. I expect the trend of more Westchester buyers will continue, especially as the BET proposed and the RTM just approved a budget with no property tax rate increase.

The northern half is picking up, and some of the hot areas have cooled a little, but this is all relative. The one area that has had the biggest change this year is mid-country with noticeably increased interest, but value pricing is still key there and in every part of town.

GREENWICH REAL ESTATE APRIL 2018 – Sales Bounce Back, Contracts Up

Sometimes when you follow the market closely you just can’t wait to see what the next month is going to bring and April 2018 was one of those months. The first quarter of this year was very different from what we had seen after the Great Recession. The high-end was doing well and the mid-market was seeing more inventory and fewer sales. Was this a trend or was it just an anomaly of the fact that with that a few sales up here and a few less listings in the winter doldrums numbers tend to jump around in some random Brownian motion?

April2018Sales.SFH.2016-Apr2018.050218

High-End Moving Along

Now the definitive verdict is still out, but the high end is still doing better this year than last year, though not quite as good in April as it was doing in the first quarter. Above $4 million we are down 30 listings while our year to date transaction (sales and contracts) over $4M are up 13 sales. As a result, months of supply are down dramatically over the last few years.

Over $10 million when you look at sales and contracts months of supply are down 6 years from last year. Now our negativists will point out that in the whole month of April we did not have one sale over $10 million and this dramatic 6-year drop is due to reduce inventory and sales from prior months. True, but we have 2 contracts pending and only 32 ultra-high-end listings at the peak of the market inventory.

As of 5/2/18 Inven-tory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 5 1 2 3 6 7 3.3 3.9 2.5
$600-$800K 14 8 4 12 14 22 4.0 3.5 3.5
$800K-$1M 19 9 4 13 16 25 4.8 4.2 4.8
$1-$1.5M 80 21 6 27 21 42 15.2 10.5 13.3
$1.5-$2M 82 20 12 32 25 45 13.1 10.0 6.8
$2-$3M 145 22 8 30 29 51 20.0 15.6 18.1
$3-$4M 92 15 8 23 16 31 23.0 16.3 11.5
$4-$5M 49 9 4 13 11 20 17.8 13.5 12.3
$5-6.5M 61 6 1 7 8 14 30.5 24.0 61.0
$6.5-$10M 53 3 0 3 3 6 70.7 48.6 *
> $10M 32 2 0 2 3 5 42.7 35.2 *
TOTAL 632 116 49 165 152 268 16.6 13.0 12.9

 

Mid-Range Getting Back to Normal

In the mid-range, we have 307 listings between $1 and $3 million. This is up 41 listings or 15% from this time last year. For those commentators that focus on sales only, our sales from $1 – 3 million are down from 88 sales last year to 75 sales this year or a drop of 15 sales. I wouldn’t worry too much however as contracts in that same price range are up by 12 houses or just about the same as the decrease in sales. Also, the $1 – 3 million price range saw an improvement in April, as was expected from the number of contracts waiting to close in March. We will likely see another improvement in May as the 63 contracts in this price range start show up as deeds in the Town Clerk’s office in May and June.

Apr2018.MoS.050218.

In fact, contracts were up in every price category from $800,000 to $10 million. We have a total of 116 contracts, 44 contingent and 72 pending, which is up from 92 in April 2017. This bodes well for the market overall. Whenever you see most price ranges seeing increased sales and increased contracts things are looking up. Our contracts were up 24 and sales were up 20 from April 2017.

Apr2018vsApr2017.Spreadsheet.mp.050518

Under $800K has a lack of inventory

Now this was not true under $800K where contracts were flat at 9 houses under contract and we had only 6 sales. I wouldn’t worry about this being some sort of sub-$800K sea change. We only have 19 listings under $800K down 3 from last year so there just not much to buy. We are still looking at less than 4 months of supply indicating a strong sellers’ market.

Apr2018.4Pie.050218

 

What’s Hot in Greenwich in Greenwich Residential Real Estate in April 2018

So what’s hot in Greenwich? There are couple of ways to define that. What sold quickly and also what sold at or above the list price. If you look at a map of these quick sales and also what went to contract quickly you have an interesting map. As usual back country looks slow followed by mid-country and those area close in town do better.

Figure 1. Sales under 30 days on the market or at list or over

What this analysis does not take in to effect is that north of the Merritt we have a 4-acre zone, while we are looking at R-6 and R-7 zoning in Byram, Pemberwick, parts of Glenville and in Old Greenwich and Riverside north of the Post Road. If you standardize on 1 acre then for the four acre zone multiple the number of sales and contracts by four and for the R-7 zone divide the number of sales by 6 since the minimum lot size is 0.17 acres.

When you do that the area that jumps out is the two- acre and one-acre zone. As I wrote in my first quarter report, the high-end is doing better and we see several sales in the old golden triangle around Clabboard Ridge and the new golden triangle in Deer Park, Zaccheus Mead and Pecksland where buyers are looking for larger houses and lots, but still want to be near town.

We continue to see quick sales in the R-7 zones of Riverside and Old Greenwich. This is understandable since, as you go lower in price the pyramid of buyers broadens quickly and these areas along with Cos Cob are seeing high demand. The more expensive areas south of the Post Road in Riverside and Old Greenwich are seeing less demand as their price appreciation over the last 5 years is slowing demand. Central Greenwich continues to be in demand, but it is a very nuanced market.

The one thing that the map shows that is not nuanced is value. If you put your house on or near to the sales price the time on them market is drastically reduced. What has changed from last year and particularly 2016 is that as the map shows this good value proposition extends from the lowest price range to the highest price range and throughout every neighborhood.

In fact the one area where we are seeing a bit of a decline in quick sales is the southwest corner of Byram, Pemberwick and Glenville. This is the area that is most sensitive to the increase in interest rates and the lower deductibility of property taxes under the new federal income tax.

Figure 2. Sales and Contract over one year on market

If we look at the other end of the days on market analysis and focus on those properties that have been on the market for more that one year with their present agent, once again we see a town-wide distribution. What we frequently see with sales that have been on the market for a long time is that they frequently go to contract after a significant price drop.

Of the 47 houses that had been on the market for more than one year and have sold or are under contract, the median price was $3.59M, i.e.  well above the average list price. This is indicative of the interest that buyers have shown in the high-end market in Greenwich in the first quarter of this year.

These sales are also distributed throughout the town, though with an emphasis on the higher priced areas. When you take into account the smaller zones in Riverside and Old Greenwich you can see that finally getting to the value price for the market results in sales, even for those properties that have been on for more than one year.

You also don’t see many sales of listings that have been on for over one year  in Byram, Pemberwick and Glenville, because even the over-priced houses in that area are usually under $1M and eventually sale.

It’s an interesting market and so far 2018 is different that what we have seen in the past 8 years.

THE HISTORIC OVERLAY ZONE CAN SAVE HISTORIC GREENWICH

Major Revision in Historic Reg Gives Major Incentives to Owners of Historic Houses

Earlier this year the Greenwich Planning & Zoning Commission did something very courageous; they significantly loosened the zoning requirements on historic properties. Under the new regulations people with historic homes can build a second house on their lot or significantly increase the size of their present house. They might even be able to convert it to a business use if it is in within 1,000 feet of a business zone.

The adoption of this regulation was hastened by the demolish of three historic homes last years. All of which had stood in Greenwich for more than 150 years. With the new, more flexible historic overlay zone all three of these historic homes might have been saved from demolition.

So just what does the new regulation do? On the residential side, you get an FAR bonus and the potential for another unit either in the present structure or in a separate, single family house. There are also bonuses for our historic business structures and the possibility of smaller setbacks on old homes. The bonuses break-out like this:

Zone FAR Bonus Unit Bonus
RA-4 25% 1.5
RA-2 25% 1.5
RA-1 15% 1.5
R-20 15% 1.5
R-12 15% 1.5
R-7 15% 1.2
R-6 15% 1.2

The FAR bonuses are a little easier to understand, if you have a home in the R-20 zone (aka the half acre zone, though in reality the 0.46 acre zone) you can build a 4,500 s.f. house on a conforming lot. With the 15% bonus for a historic home you could expand up to 5,175 s.f. if granted by P&Z.

For the unit bonus, if you had a conforming lot with a historic home built before 1940 you could have 1.5 units on your lot. Now, you might ask what you can do with half a house, other than in certain divorce situations. The regs allow you to round-up to the next whole number. So, 1.5 units becomes 2 houses; one historic and one new.

The troublesome word here is “might”. Up until now I’ve talked about what you might be able to get, but the devil is in the details of the process. Just because you have a house that was built before 1940 does not mean that you are going to get an FAR or unit bonus. Your house must be “architecturally or historically notable”.  A 1938 cookie-cutter, center hall colonial that has the same floorplan as every other house on the street and has no room for a second house is probably not going to qualify.

It might however if the house is associated with events that have made a significant contribution to the broad patterns of our history; and/or [been] associated with the lives of persons significant in our past

So, if the first transatlantic radio broadcast happened from your modest cottage or if Truman Capote grew up in your house you probably have a good chance for a bonus. Once again, it’s only probably, because we don’t know yet how the Commissioners will use their broad discretion.

The prior version of the historic overlay zone was a functional failure. For the new historic overlay zone regulation to work, P&Z needs to remove as much risk and cost as can reasonably be done. For example, a guideline that a house that is older than say 1880 is presumptively historic if major elements of the original structure and exterior survive, would encourage applications.

So just how much of our market is historic. Of our 615 house listings, 7 were built before 1800 and 22 were built in the 19th Century. Together, they are less than 5% of the market. The “real” number is even lower as some of these historic homes are that old in date only. Many of these housed have been so extensively renovated that little is left but some hand-hewn beams in the crawlspace.

The process is complex and requires a variety of skills to analyze what could be done and your chance of success. We actually have a group of five people looking at what options might be workable to save these old houses. One big factor is will we see the same extensive reports for a modest 1790 house on the Byram River as we see for a 1920 great estate.

The good news is that I think every member of the Commission wants to do what they can to save historic Greenwich and I know Director Katie DeLuca has made this a priority. We have a workable regulation, now if we get a workable process that takes in to account the means of the applicant and value of what is being requested, we could save a lot of Greenwich’s history from the wrecking ball. The first few applications will set the tone for this new regulation.