FIRST HALF 2018 GREENWICH REAL ESTATE MARKET REPORT – Taxes Down, Transactions Up

For the first half of 2018, we had 273 sales of single family homes. This is down 13 sales from the first half of 2017 or 5%, but the good news is that we have 120 contracts waiting to close which is up 25 contracts from last year. When you add the contracts to the sales we have 393 houses that have gone off the market or an increase of 3%. So, you could say that the first half of 2018 was much like the first half of 2017 and you would be partially right, but we do have several significant differences.

Most of these changes can be attributed to Greenwich’s low property taxes and the BET’s remarkable ability to keep our already low taxes flat for this year. Our mill rate for sewered properties continues to be 11.871. If you leave outside of the area with town sewers (mainly the 2 and 4 acres zones) your Greenwich property taxes actually went down for the July 2018 – June 2019 fiscal tax year to 11.369. These folks are only paying $7,958 per million dollars of valuation.

As of 7/1/18 Inventory Contracts Last Mo. Solds Last Mo. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 5 0 1 1 8 8 3.8 4.7 5.0
$600-$800K 13 8 3 11 23 31 3.4 3.1 4.3
$800K-$1M 33 10 7 17 29 39 6.8 6.3 4.7
$1-$1.5M 76 22 11 33 44 66 10.4 8.6 6.9
$1.5-$2M 91 21 11 32 45 66 12.1 10.3 8.3
$2-$3M 143 27 13 40 48 75 17.9 14.3 11.0
$3-$4M 105 16 11 27 34 50 18.5 15.8 9.5
$4-$5M 54 5 2 7 15 20 21.6 20.3 27.0
$5-6.5M 62 6 5 11 16 22 23.3 21.1 12.4
$6.5-$10M 53 5 0 5 4 9 79.5 44.2
> $10M 35 0 2 2 7 7 30.0 37.5 17.5
TOTAL 670 120 66 186 273 393 14.7 12.8 10.2

Under $800,000 sales are down, in fact under $600,000 our transactions (sales + contracts) are down 33%. This dramatic drop in sales does not mean that all of a sudden entry-level buyers and downsizers moving to more modest homes are suddenly fleeing the Greenwich market. What it means is that we have fewer houses to buy.

That 33% drop in transactions under $600,000 is only 4 fewer transaction in 2018 than in 2017, down from 12 transactions to 8 transactions. If we had more inventory under $800K, we would have more sales. What is encouraging is that the reason for less inventory is not fewer listings. We actually have more listings under $2 million, but the houses that were under $800K, and particularly under $600K, have appreciated nicely over the last couple of years, so our low end has gotten higher valued.

Overall, if you take what used to be called the Klein index (sales price/assessment), when Stanley Klein’s numbers were the bible with what was going on in Greenwich real estate, you get 7.8% appreciation for all the sales since the Tax Assessor’s last revaluation as of 10/1/15. If you do the same calculation for the 8 sales under $600K that we have had in 2018, you get 13.7% appreciation or 75% more appreciation that the rest of the market saw on average. So, if you are looking to buy in Byram, Pemberwick or the R-7 zone north of the Post Road in Old Greenwich and Riverside, you had best be prepared to move quickly.

As stated above, we are down 13 sales in the first half of this year compared to last year and if you want you can blame nearly all of it on June’s lackluster sales which were down 12 sales compared to last June. If you want to get really specific you can blame all of that June loss in sales on the price range from $1.0 – $2.0 million where sales were down 10 houses compared to last June.

Fortunately, there is no need to panic as this same segment was also strong for contracts with 43 contracts waiting to close up 9 contracts from last year. This increase in contracts is very promising as the tax changes seemed to hit this price segment particularly hard earlier in the year We saw more inventory and lower sales. We still have significantly more inventory from $800K to $4 million than last year with 41 more listings, but that’s also the exact same price range where contracts are up 28 over last year. Bottom line you should see a strengthening mid-market in the next couple of months.

At the high-end the market has cooled a little, but we are still doing better than last year, particularly over $10 million. In the first half of 2018 we 7 sales over $10 million compared to only 2 sales in the first half of 2017. These high-end sales have a disproportionate impact on sales volume.

Through the end of June $693,845,087 worth of houses sold in Greenwich, CT, a town of 62,000. This gave us an average sale of $2,541,557 and a median sale of $1,865,000. There are a few other towns that have higher averages, but not many of towns of our size can match our sales volume.

 

The one area in the high-end that has seen a significant June retreat is the $6.5 – 10 million price range. While inventory is down 9 listings from last year to 53 houses in this price range our June sales were down from 5 sales last year to no sales this month. We do have 5 contracts in this price range which is up 1 from last year. The result is that month of supply for the $6.5 – 10 million price range jumped from about 4 years of supply to 6.7 years of supply (literally off the chart.)

This is at the same time that we had only 2.5 years of supply of houses over $10 million or down an amazing 7 years reduction in months of supply from last year. At the high-end, a half dozen sales or more inventory can make these numbers jump around, but before June 2018 all the high-end was looking good.

We could still do with more buyers and with a little less uncertainty from Washington, we might get some. Still we are chugging along, with nearly every price range having something that is good news.

 

One thought on “FIRST HALF 2018 GREENWICH REAL ESTATE MARKET REPORT – Taxes Down, Transactions Up

  1. Can you clarify Klein definition of “assessment”? Town comes up with what it thinks is “market” then it discounts 30% to the assessed amount and applies the mill rate. So if property sales prices ie actual market have gone up in 3yrs 7.8% on the assessment value, they are still under water of market value by alot! Another way to look at that is town’s next assessment is down. Another clarification would be helpful on the grid of months of supply–the numbers must be the increase or decrease of months versus the bar chart which is actual, since they are very different amounts. Finally focusing in the belly of the distribution curve what are the trends ie $1.8–$4mm price properties? Why focus on $600-$800k value properties when the aggregate dollar impact is in the middle priced properties with higher number of sales (and if that is not occuring why– as that means statistically the whole curve is shifting left–or lower)

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