House Hunting in a Pandemic

Even while you are sheltering in place you can do a lot of house hunting and you probably should. There is nothing like being cooped up in your home for a whole week and more for you to start thinking about all the things that bother you about your house, condo or apartment. Is this really the best place for you today and in the coming years? If your lives have changed, now may be a good time to start the process to change you abode.

So, what can you do from home? First, figure out what you don’t want. What types of housing do you not want, a downtown condo or a big house on the shore. I suggest deciding what you don’t want because it can be hard to figure out what exactly it is that you do want.  Also,  don’t forget you can fix up or change your present location. (And, what better time to do it than now, when you are at home anyway. I hope my wife doesn’t read this part.;)

Assuming that fixing up or expanding your present house is not your first choice and you’ve excluded what you don’t want you might want to talk to your banker or investment adviser about what you can afford. I find buyers are often surprised at what you can afford, particularly with a 90% mortgage or with non-traditional financing. Many different types of financing are at record lows.

Next think about what types of neighborhoods appeal to you. Since you are at home, now’s a good time to call up some friends in that neighborhood and talk them about what they do and don’t like about living in their neighborhood. You might even consider a Zoomtails neighborhood search party. At my house each night of quarantine we get on a video conference call via Zoom with various friends and family. The calls are a blast, you get to talk to friends and family, face to face, from anywhere in the world for free and you actually feel like you’ve been to a party or a family reunion afterwards.

Now you can look at some specific houses without being overwhelmed with the multiplicity of choices. Also, you are not looking for the right house in the wrong neighborhood.

For many folks, the next step is go to one of the big two websites, down from the big three, now that Trulia has merged with Zillow. I personally prefer, Realtor.com rather than Zillow, but that’s mostly because Zillow is a nightmare to deal with for Realtors. Getting data corrected on Zillow can take me, my marketing and tech departments days to get corrected. Zillow’s Zestimate is also often very wrong, but lots of people lover it. So much so, that Realtor.com came up with their own value estimate. Take them all with a large grain of salt.

You also have to be awake for lots of other misinformation on these sites. Sometimes they will tell you the nearest public school is in Rye or Armonk other times the square footage is just wrong. Having said all that, there is lots of good information on these sites and don’t forget the company websites like bhhsne.com and raveis.com. They each try to develop their own useful tools, which may be just what you need. For example, my company Berkshire Hathaway, just rolled out Virtual Visits, a way to just search for houses that have a virtual tour.

Which brings me to another way not to visit a house. Last year, I had a great family from Kansas that was looking to move to Greenwich, but were only going to have a weekend to look at houses and decide which one they wanted to make an offer on. Before they got here, we narrowed it down to three neighborhoods. Next, we went over the same listing on their computer and mine so we were looking at the same thing. We narrowed down the choices and I would go to the house and call them on Facetime for a walk them through the house. They could ask me to zoom in to one area or step back for a broader view.

This year, I would do the same screening using Zoom and it’s desktop sharing feature so we were both looking at the same image at the same time. One feature that is particularly useful when sharing is Bing Map’s bird’s eye view. Type in the house address at maps.bing.com and then right click the house and select “View Bird’s Eye”. Then click on the arrows around the compass to rotate to different 45 degree views of the house and neighborhood. (At one time when you did this for my house you could seem me taking the dogs for a walk.) You can also do this with Google Earth, but it’s a little distorted.

Back at your present house, if you bought a flat screen in the last 4 years, there is a good chance you can plug your laptop into your big flatscreen TV and put the computer screen on your huge flat screen TV where you can pick up a lot more details. (You can also try to “cast” the screen to your TV wirelessly, but I couldn’t it with an iPhone and a Sony. It seems the two companies don’t play together well.)

Real estate has been deemed an essential business, so we are still working, some of us harder than before. Showings may still be a possibility depending on the buyer, seller, the agents and the rules de jure from the state, town, company and MLS. Of course, this is lot easier when the house is vacant.

Once you are serious about buying, if you are going to use a mortgage it can be very helpful to get underwritten pre-approved. This means you go through the whole approval process, not do just a quick pre-qualification letter where they review your credit. With a true pre-approval all you need is the appraisal and you can close in under a month, which can be a big advantage in negotiating.

If you’ve got the time the info is out there. You might as well have a leg up on the competition by being full prepared with financing and information.

Bloomberg Article re Sales and Short Term Rentals in Greenwich & Suburbs (MP quoted)

Oshrat Carmiel has a good article on Bloomberg about the increase in sales and rentals, particularly short term rentals in Greenwich and the surrounding New York suburbs. She used the Greenwich sales data that you can see in my post on the Coronavirus and also liked my comment, “There are clearly a lot of people who prefer to put 4 acres of social distance between them and their neighbors rather than 12 inches of wallboard,”

As noted in the article, with the restrictions on movement, things did slow down the third week in March with 17 sales and contracts compared to 33 the week before. Several of the earlier contracts did close last week and as a result single family home sales sales are up in 28% in March through last Friday from 18 sales to 23 sales.

Here is the link to the Bloomberg article and here is where it is on MSN in case the article is behind their paywall.

 

 

Real Estate – Surviving and Some Thriving in the Coronavirus Era

We have hit the inflection point for Coronavirus infections in the U.S. and can expect that we are going to see rapidly rising infection counts and unfortunately more deaths. At the same time COVID-19 on a world-wide basis, and particularly in the U.S., has not been a leading cause of deaths. Globally, we have seen 207,000 infections and 8,300 deaths this compares to 56 million deaths a year from all causes according to the World Health Organization. In the U.S we have had 7,600 cases and 117 deaths from COVID-19 as of Wednesday, March 18th This compares with 2.8 million deaths in the U.S. each year from all causes according to the CDC. In Connecticut, we only have 68 case, with 6 of them in Greenwich and no deaths in Connecticut yet. (Of course, by the time you read this these numbers will have changed.)

As I said, these numbers are only heading up and at an accelerating rate. Our biggest problem is we don’t know how far and for how long. COVID-19 has already exceeded the other two prior coronaviruses; MERS and SARS. It is also something that each of us can influence by our actions and help to reduce the total deaths. For me, it’s something that hits home at my house as my wife and I are doing what we can to protect my 98-year-old mother-in-law (sorry for giving away your age).

What is clear is that this coronavirus is causing severe economic disruption in the economy, and in the stock market, and in our lives and in the real estate market. While COVID-19 is clearly causing changes in the Greenwich real estate market; these changes are not always in the ways that you might think.

What Do We Know About Houses

As of March 18, 2020, we have sold 89 single family homes in Greenwich and have 86 contracts waiting to close for a total of 175 houses off the market so far this year. As of March 31, 2019, last year we only had 74 sales and 67 contracts or a total of 141 transactions. So, with two weeks still to go in the first quarter, we are doing better than we did last year. The tax changes made by 2017 tax act had a greater impact on Greenwich in than did C-19.

Now as we know 2019 was not a good year for Greenwich real estate. If you look at our 10-year average for the first quarter, you come up with 102 sales. If you gross up our 21 sales so far in March, you get 37 sales for a first quarter total of 126 sales so 2020 is likely to be better than our 10-year average.

The question is, will this actually happen? The short answer is no one knows, but if you look at 2020 transactions week by week you get an interesting graph.

Low interest rates not seen for 50 years and pent up demand from last year’s slow market continue to push transactions, the total of sales and contracts up. This happens every year as we get further into the spring market, but the continued market demand in the face of all the bad news is heartening.

 

Week of Week Total
1-Jan 2
6-Jan 7
13-Jan 8
20-Jan 10
27-Jan 19
3-Feb 13
10-Feb 11
17-Feb 18
24-Feb 16
2-Mar 25
9-Mar 33

We also have another factor driving sales and this is C-19 itself. It seems that many families that were thinking about moving out of New York City have decided to accelerate their plans and move earlier.

Rentals

Where we really see that acceleration is in the rental market. From January 1 to March 18th we had 48 rentals of all types in 2018 and 52 rentals in 2019. This year we have had 72 rentals or an increase of 39%. Most of those rentals were long-term rentals for a year or more. Short-term rentals for houses are very limited and usually are rented pretty quickly. Last year out of 864 rentals of all types done through the GMLS only 8 were listed as short-term rentals with an additional 17 were listed as summer rentals. (We also had 1 winter rental.)

What Can You Do?

A. Buyers

For buyers this is an amazing time. Interest rates are at record lows and there are significant uncertainties on the sellers’ side making many sellers more negotiable on price. Casual shopping around is harder. The Greenwich MLS has banned public open houses for this week, so any showings have to be made through the listing agent. The policy is likely to continue until the situation improves. For buyers having a good agent and mortgage banker is crucial.

B. Sellers

For sellers, the market is much more problematic. Do you sell now, before things get worse, pull your house off the market to avoid infected buyers or just wait to list. Uncertainty tends to freeze folks including sellers. Right now, we have 530 single family home listings on the market with more coming on every day in the spring market. We had 567 listings at the end of March 2018 and 608 listings at the end of March 2019.
Anecdotally, the market under $2 million, where most properties are bought with mortgages seems to be active. (It certainly has been for me.) Over $4 million the market is slower. Why that is, when you would think that the people with money might be more interested in alternatives, is not clear. Then again maybe they already have their alternatives bought years ago.

C. Landlords

For landlords, the situation has opportunities and problems, especially if they would like to do a short term rental deal. In the normal year, we don’t get many short term rentals and the higher you go in price the fewer there are. The one exception being summer rentals and even there we only had 17 summer rentals out of 864 rentals last year. There are more short-term rentals, but most of them are done through the paper, Craigslist, Airbnb, or by word of mouth.
One of opportunity landlords have, if they have a rural/remote vacation house is to move and do a short-term rental of their Greenwich house. The tenants are there. (I’m checking with all of my clients to see if they might want to do this.)
At the same time, you have a bunch of issues with a C-19 issue. What can you do if the two month tenant wants to stay? What happens if a tenant tests positive for C-19? (Luckily, it appears that C-19 doesn’t last long on most surfaces.) What’s the appropriate procedure for cleaning the house after the family leaves? Each person has their risk/reward calculation.

D. COVID-19 Tenants

Many prospective tenants are looking to get out of the city and wanting to put 4 acres of social distance between themselves and their neighbors rather than on 12 inches of apartment wall. As noted above, finding a short term rental in Greenwich is tough. Multiple agents I’ve talked to are getting lots of requests from NYC families for nice houses with a yard that they can move into immediately. What is available tends to go quickly.

 Summary

C-19 is making big changes to life in Greenwich. For the moment it actually seems to be increasing sales and is certainly increasing short-term rentals. Our inventory is down as sellers wait to see what will happen. Listing when there are fewer sellers and more buyers is usually a good idea.
If you would like to help out a family stuck in New York who is looking for short term rental, and the house is move in ready, you can probably get a tenant in days not months.
Only time will tell what will happen and for the next few weeks the coronavirus will only get worse. However, the result maybe that Greenwich and other towns will be seen as safer havens and places that homeowners want a second-family home they can retreat to when things are not going well. We lost many of weekenders after the recession, this situation may bring them back and result in a longer lasting perception change about the Greenwich market.

Coronavirus and Stock Market don’t Overcome Low Interest Rates, Sales Up in Greenwich CT Real Estate Market

Transactions continue to climb in the Greenwich real estate market despite concerns about the Coronavirus and the end of the bull market in the stock market. Low Interest rates and pent up demand from last year’s slow market continue to push transactions up. Now this happens every year as we get further into the spring market, but the continued market demand in the face of all the bad news is heartening.

Week of Week Total
1-Jan 2
6-Jan 7
13-Jan 8
20-Jan 10
27-Jan 19
3-Feb 13
10-Feb 11
17-Feb 18
24-Feb 16
2-Mar 25
9-Mar 33

I’ve have three properties that have offers on them and two have back-up offers. Now they are well priced, but this is still quite a turn around from last year’s slow market. We have had 17 sales so far this month compared to 15 sales for the first 15 days of March 2019. Where we really see the difference is in contracts. at end of March 2019 we had 67 contracts and we already have 87 contracts as of March 13th this year.

I’m also hearing of folks from New York City looking for weekend and bailout houses. It’s a lot easier to maintain a social distance on 4 acres of land than in an apartment building. I’m having an open house on Sunday from 1 – 3 pm on some raw land at 5 Greenfield Place in a new subdivision off of Sherwood Avenue with almost 4 acres. I’ll be interested to see who comes to see it.

 

An Open House Guide for Buyers

Starting in March and continuing through July we will have about 100 open houses every weekend in Greenwich. The record for most open houses in a weekend that I have seen is around 168, which considering that we peek around 600 single family homes is quite a lot. Over the last couple of years more sellers are having more open houses at more different price ranges. We will now have open houses for houses over $10,000,000 when historically we would rarely see open houses much over four or five million. We also have open houses for rentals, condos, co-ops and even land.

Check out the Neighborhood First

What most people initially do when they go to look for a house is to look at a bunch of pictures online and go see what house looks nice. The better plan is to narrow it down to the neighborhoods you’d like to live in. The odds that you’re going to walk into the perfect house in the perfect neighborhood is low if you don’t plan ahead.

The first time you go out to look at open houses you want to put your phone down and look at the houses in the neighborhood as you approach the open house. Is this a place that would work for you and your family? Check out the traffic in the neighborhood and the number of kids around. Are there basketball goals facing the street meaning that it’s a slow traffic area?

Bargains with Poor Curb Appeal

As you approach the house see what you’re feeling is from the street, the so called curb appeal. It’s great to have a house that everybody likes, however if you’re looking for a bargain one of the things you want to look for is negative curb appeal, because it means that other people have come in decided that they don’t like the house before they’ve even gotten inside the house.

Verify the House Number, Not Just the Sign

Another important factor is to make sure that you’re at the right house. If you’ve done your homework you have the list of open houses with the street address. Many years ago when I was getting started as a Realtor, there were two driveways right next to each other with a Realtor open house sign in the middle. I went down the wrong driveway, parked, walked up to the house, stepped inside the front door and said hello. I quickly realized that the open house was actually the next house. So, check the number on the mailbox and on the front door to make sure that you’re at 44 and not 46.

Check-in with the Agent, Get More Info

Once you get to the open house there is no need to ring the front bell, go ahead and walk in and announce yourself by simply saying hello. Usually the agent will be right there, unless they’re showing the house too another perspective buyer. Most times, the sign up sheet is in the kitchen so head over there sign in and say hello to the agent. The agent wants to sell the house and is usually a font of information about the house. If the agent has food don’t take it now. You don’t want to walk around the house dropping chocolate chip cookie crumbs all over the house. This is particularly true if your children are with you.

What you do want to do is to get the listing sheet that has all of the stats on the house. Also, if you’re touring the open house for a spouse or a child in a remote location who wants photos and videos, ask before you take any pictures to send them. Last week, I had a couple that had a small dog in a shoulder bag and that’s fine, however you don’t want to walk around with your pets or small inquisitive children who are opening every drawer and touching every little knickknack on the table.

Good Touches, Bad Touches & Coronavirus

Ideally, the owner should have put away many of their small items, however that’s not always the case. If it is something that you’ll be buying; i.e., the realty and fixtures feel free to take a look, however if it is personal property, (those items that can be picked up) do not touch. So free to open closets and kitchen cabinets, do not open drawers in the furniture. In this age of the Coronavirus you may want to bring a packet of Kleenex to open door knobs and a baggie to deposit them in.

Dressing for Open Houses

You want to dress for what you are planning to look at. If it’s a rainy day you probably need to take off your shoes or wear booties at each house. This is not the time to wear the knee high boots with a dozen buttons. Also, you may be going up type spiral staircases or looking under various parts of the house so dress appropriately.

Look Beyond the Staging and the Paint

Staging is a huge benefit for sellers and can give you a feel of what the house could look like when you move your stuff in. However, it does not sell with the house. At an open house, ignore the furniture., pictures and throw rugs. Do try to imagine your stuff in the house.

If you like the house, swing back to the kitchen and picture and pick up the brochure and talk to the agent. Make notes and head out to the next house. Now is good time to pick up the cookies and candy. Searching for the perfect house can work up quite an appetite.

During the week, I often don’t have time to get to the realtor open houses since I have my own client/s open houses, so on a weekend when I’m free I’ll go out to the public open houses. I still remember the comment I heard as as I was walking down the hall of lady who said “Harvey we can’t live here the bedroom is blood red”. She was correct the bedroom had been painted in oxblood red, a short lived phenomenon  last decade. Once you own the house you can paint walls and even take out entire walls to make the house accommodate your family and the way you want to live.

How is Your Competition

Some other things to check out at an open house is just how busy it is. Are you one of four groups touring the house at the same time? You can often look at the sign up sheet , particularly if it’s later in the open house and see whether you’re looking at three or four or 20 or 30 groups that have come through.

Looking at Land Listings

You want to wear the right the clothes for the property that you are looking at. Last year we were showing a land listing and the male showed up with a large, punguent cigar and the female showed up with pencil pants and high heels. For most open houses this was fine, but this was 4 acres of raw land with no house and no trails. The poor woman followed behind the cigar on tip toes.  I have co-listed 4 acres at 5 Greenfield Place with Carline Martin. We are having hosting on open house there this Sunday. It is a new development across from the Chieftans on Sherwood Avenue. It is beautiful land, but boots work better than high heels.

Bad can be Good for Bargains

If you are looking for a bargain go for the bad, that has an underlying good. We do have listings where the agent took the photos with an iPhone rather than professional photos. A key give away is when all you see of the bedroom or bathroom is the opposite corner due to the narrow angle of the iPhone. This may well be a horrible teardown, but it may just be poorly photographed. If you are looking for a good deal, look for poor photography, apparent poor curb appeal, fixable issues like mold, asbestos and cramped floor plans. See the potential that other buyers can’t see. Call your agent about these properties, she, or he, can give you better a much better feel about these “poorly marketed” properties.

Also, don’t go see what you can’t afford. You can get some ideas of what you might do with your new home, but if your budget is for 3,000 s.f. and you look at 6,000 s.f. house, your properties is going to look dwarfed. Focus on reality, which is what the vast majority of buyers do.

High-End Sellers

At the high-end, I would say the majority of sellers think that people are going to come see their house just see what an $8 million house looks like. I can truthfully say that I have never had a buyer show up to see a high-end house they couldn’t afford it. Buyers self-filter, they don’t do high-end tourism. If you have a $10 million open house, you are only going to get a handful of buyers, most of which are qualified buyers, who likely would not come otherwise.

 

Open houses are a great way to find both a house and a neighborhood where you want to live. With a little planning you can get a lot out of your time and have a good time. If you are looking in Greenwich Connecticut and would like to subscribe to my weekly open house list and market reports feel free to send me an email at mark@bhhsne.com and let me to add you to the list. Good luck with your house hunting.

Coronavirus & Stock Market Corrections Don’t Dent February Greenwich Real Estate Market

February 2020 Good Sales in a Difficult Environment

by Mark Pruner

Neither worries about the coronavirus, nor a record stock market slump dented the Greenwich market in February 2020. Our 30 single family home sales in February 2020 were 50% higher than the 20 SFH sales we had in February 2019. To make things look even better, we had 75 contracts at the beginning of March 2020 compared to only 51 contracts in March 2019.

As of 3/2/2020 Inventory Contracts Last Mo. Solds Last Mo Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 4 2 1 3 2 4 4.0 3.5 4.0
$600-$800K 25 7 4 11 5 12 10.0 7.3 6.3
$800K-$1M 25 3 1 4 3 6 16.7 14.6 25.0
$1-$1.5M 56 20 5 25 15 35 7.5 5.6 11.2
$1.5-$2M 62 8 5 13 13 21 9.5 10.3 12.4
$2-$3M 112 18 5 23 11 29 20.4 13.5 22.4
$3-$4M 82 10 7 17 12 22 13.7 13.0 11.7
$4-$5M 39 1 1 2 4 5 19.5 27.3 39.0
$5-6.5M 36 4 1 5 3 7 24.0 18.0 36.0
$6.5-$10M 43 0 0 0 0 0 * * *
> $10M 29 2 0 2 0 2 * 50.8 *
                   
TOTAL 513 75 30 105 68 143 15.1 12.6 17.1

 

As I noted in my January report there seems to be a new urgency in buyers to actually get deals done. My new listings are getting regular showings and two listings have accepted offers including a land listing that got multiple offers. Now you might think that, since the stock market didn’t correct until the last week of February, that a last week market slump is being disguised by the three previous weeks, but that is not the case. We had as many contracts and sales in the last week of February as we had in each of the other three weeks and the last week was actually better than one of the weeks. The pace of transactions is also continuing in the first couple of days of March.

This increase in sales is despite a slower than normal start of new inventory coming on the market. We are down 24 houses from last year, which is only 4.5% lower, but you would think with February 2020 being the first February without measurable snow in Central Park, that we would see more houses coming on to take advantage of the good weather and increased sales, but you’d be slightly wrong.

Our inventory drop is concentrated between $1 million and $10 million where we are down 50 listings. This drop is counter-balanced by inventory from $600,000 to $1 million where we are up 19 listings. The result of lower inventory and higher sales means a real drop in months of supply going from 22.9 months of supply in February 2019 to 15.1 months of supply this February, a drop of 34%.

When you look at the bottom line, all of the numbers show a movement to a seller’s market. Inventory is down 4.5%, year-to-date sales are up 50% and contracts are up 39% resulting in a drop of months of supply of 34%. What could be better for sellers? There is only one fly in the ointment, last year was not a good year for the Greenwich market, so comparing a decent year to a poor year will always make for a positive outlook. When you go back to 2018, those same year over year numbers are inventory down 2%, year-to-date sales up 5%, contracts down 16% and months of supply down 6%. So, 2020 is still doing better overall than 2018, but the story is just not as dramatic.

Part of what is fueling this year’s buyer interest is interest; interest rates that is. The Fed just lowered interest rates by half a percentage point in an emergency process not seen since 2008. The result is that the 10-year Treasury note is at record lows and the average mortgage rates for 30 year mortgages are under 3.5%. For the national housing market this is excellent news.

In Greenwich, the situation is a little more nuanced. Lower interest rates do push up sales, but so is having an expanding stock market portfolio. The market hit an all-time record high on February 12th. When people have stock portfolios that have grown, the temptation is to put some of these funds into real estate. You see this particularly over $3 million where most of our purchases are done without traditional mortgages. This has become even more prevalent now that the mortgage deductibility is capped at $750,000 down from $1.1 million in 2017. Interestingly, lower mortgage rates may still encourage real estate investments as bonds aren’t returning as much money as they did.

From $3 – 6.5 million our 2020 sales are up 117% from 6 sales last year (it was a bad year) to 13 sales this year. This even better than 2018 when we had 11 sales in that price range. Numbers like that don’t seem to make the mainstream press as evidenced by a Wall Street Journal article on Tuesday that said our market was “struggling” citing the same author’s story from April 2019 and ignoring what is going on this year.

Now she does have a bit of a point if you look at only the market over $10 million. There we’ve had no sale this compared to 2 sales in 2019. We do have 2 contracts for listings over $10 million compared to only 1 contract in 2019, but any way you look at it we are dealing with small numbers. We are also seeing very high-end sales move to later in the year, so on a percentage basis sales are down dramatically, the reality is a couple more sales and our numbers are up in the very high-end also.

Our contracts are mainly distributed in the $1 – 4 million price range, which bodes well for these price ranges in March. We have a very volatile world and U.S. situation at the moment. We have a had good beginning, but we have factors pushing our market both ways, so stay tuned. At least the market won’t be boring.

3/7/20 Update – This article was written on 3/2/20, before any Covid=19 cases had been diagnosed in the New York Area. This week cases were diagnosed in Westchester County, New York and in Danbury, Connecticut. At the same time, the 10 year treasury note hit an all time low. The result was that even more people are looking to do transactions with sales and contracts increasing significantly in the first week of March.