January 2019 – Greenwich Real Estate Sales Hold Their Own
Government Shutdown Pushes Contracts Down
by Mark Pruner
In some ways January 2019 was a lot like January 2018. This year we had 29 sales and last year we had 30 sales. In most price ranges we had about the same sales as last year. Sales were up from $1.5 – 3 million, where we had 13 sales which is up 7 sales from last year or more than double the 6 sales we had in January 2018.
On the downside we had only one sale from $600K – 800K which was down 6 from last year. We also saw a drop of 2 sales in our ultra-high-end, over $10 million market, from 2 sales last January to no sales this year, but we have 3 ultra-high-end contracts waiting to close. Overall these small changes are just the normal numeric chatter you get in a market with only a few dozen sales in January.
|2/4/19||Inventory||Contracts||Last Mo. Solds||Tot. Solds+ Contracts||YTD Solds||YTD+ Contracts||Mos Supply||Mos w/ Contracts||Last Mo. Annlzd|
What is not general chatter is the effect that the federal government shutdown had on our local real estate market. Contracts were down 28% from last year’s 58 contracts to this year’s 42 contracts. From $2 million to $10 million contracts were down in every category. Below $2 million the contracts were the same as last year. On the good news side, the ultra-high-end that had no sales last month has the aforesaid three contracts pending.
The overall drop in contracts in January does not bode well for sales in February.
On the inventory side we are having an average year overall, but we have some noticeable changes at different price levels. The jump in inventory under $1.5 million that we had for much of last year is over, at least for now. From $600,000 to $1.5 million we are down 17 listings from 86 houses to only 69 houses presently on the market. The drop in inventory may just be in comparison to 2018 when taxes gave us a bump up on inventory.
At the same time, the inventory from $1.5 – $ 3 million continues the trend that we saw in the latter part of last year with higher inventory. This may be the next phase of the new federal cap on SALT deductions that drove up lower priced inventory in the first half of 2018 having taken awhile to extend into the higher price ranges.
At the high-end, inventory looks just like last year with more inventory from $5 – 10 million and lower inventory over $10 million. I’m working on that with an effort to reach out to high-end weekenders who are tired of the commute and hassles of the Hamptons.
When all is said and done though we are within 1% of the same inventory as last year, now that is up from 2017 just like in 2018, but it’s still to early to tell what the trend will be in 2019
The 2019 Real Estate Market
So, what can we expect in 2019? Several factors point to a better year; we just had a good January for the stock market, unemployment continues to be extraordinarily low and Connecticut, unlike New York and New Jersey, saw an increase in income tax revenue. (I wonder how much of that came from Greenwich.) The Fed also has gotten smarter and sees the extraordinary sensitivity of this housing market to increased interest rates.
On the down side we continue to hear discussions of a coming downturn, which as companies cut back on spending plans becomes a self-fulfilling prophecy. Also, as we saw last month FUD (fear, uncertainty and doubt) is a big factor in major purchases like a house. The federal government shutdown really upped the FUD factor.
So, for 2019 and most years, I tend to like to look on the bright side. If we get a federal budget, a reasonable state budget, solve the China trade matter and the stock market does okay, all of which are doable, then 2019 could be a pretty good year.