New York Times, CT Post and Greenwich Time have articles about hot Greenwich/CT market (MP quoted)

New York Times logoHartford Courant

Greenwich Time Logo

 

With contracts up 100% over last year we are seeing lots of interest from the press about the increase in sales and the ways that the Coroanavirus have changed real estate in Greenwich and Connecticut. Here are three stories that I got quoted in about how the market is changing.

5 Ways the Coronavirus Has Changed Suburban Real Estate – NY Times

Agents: CT homes sales ‘are off the charts’ even if numbers don’t yet show it – CT Post/Hartford Courant/Hearst

New Yorkers continue to hunt for homes in Greenwich – Greenwich Time (features my listings at 1076 Lake Avenue and 505 E. Putnam)

 

Contracts Up 100% in the Hot Greenwich Real Estate Market – Mid-July 2020 Update

As of the middle of July, we have had 287 single family home sales in Greenwich. Of those sales, 44 or 15.3% went for list or over list price. Many of these, and others that sold for under list price were multiple bid situations. Many of these transactions were pre-Covid and you can expect that the percent of list and over list deals will go up. (I’m working on one now.)

Our contracts only really started to accelerate in the second week in May when we went a slow 23 transactions, sales and contracts, to 33 contracts in a week. Last week we had 58 transactions down slightly from 64 transaction the previous week when the Gold Coast conveyance tax increase kicked in on July 1st. The large percentage of those 58 transactions were contracts being signed.

Single Family Homes Sales and Contracts Each Week in 2020

The other interesting thing is where these list and over list contracts are. If you read my neighborhood report last week, you can predict where the competitive sales are. They are in the hot neighborhoods. Old Greenwich, Riverside and Glenville are seeing their fair share of over list activity. Mid-country and Cos Cob are seeing hot sales and the” backcountry is back” area is also seeing over list activity, while we’ve yet to see this in Byram and Pemberwick.

Closed sales for list or over list in Greenwich, CT as of 7/14/20

What’s really remarkable is the number of outstanding contracts we have. As of 7/14/20 we have 198 contracts which is an amazing number when you consider that last year that number was around 99 contracts. This is a 100% Covid driven increase. You can be sure that many of those 198 contracts went for list or over list. The market is hot and so far is only getting hotter with each passing week.

On the inventory side we are getting new inventory, but it is going off fast also. We presently have 566 listings; this is down from 640 listings as of the end of July 2019 or a drop of 12%. We had been done down about 20% in inventory, so only 12% down is an improvement, but some price ranges in some neighborhoods are very much combat buying.

I have spoken to several of our longest serving agents, in some cases their tenure goes back 40 years. They say they have never seen a market like this; not after 9/11, not in the go-go years of the 80s, nor in the bubble years of the digits decade. This really is an unprecedented time.

How to Be the Winning Buyer in the Hot Covid Real Estate Market

So how does a buyer get an advantage in a competitive bidding situation in a tight market? The short answer is to be better prepared than your competition and move faster than they do.

Build a Team Early

Everyone knows to get a good Realtor when they buy a house, but you will need other professionals too. If you are going to need financing, talk to a mortgage broker or banker early, even before you start looking. Meet with them and build a relationship. Very few financings are pro forma today and you’ll want a banker who will go to bat for you to move the process along.

Most buyers don’t think about a real estate attorney until after their offer has been accepted. Be prepared and find your attorney early. Let him or her know your level of experience and that you’ll probably need a quick turn around on the contract rider.

Building inspectors can also be a big help. Once again, speed can be crucial. In a competitive bidding situation, you may only have a day or two to inspect the property. The only thing worse than coming in second in a bidding war is winning war only to get a house with problems.

The top capital gains tax has increased and there is an additional 3.8% Medicare tax on gains. The rules are complex, but if you have a significant gain in your present house, you may face a bigger tax bite than you thought. If you are selling your own house and you need the funds from that house to close, consult a tax attorney or accountant now to see just how much the taxman taketh and ways to minimize that take.

Tactics

First relax you’ve got a team of advisors if things get difficult. You’re better prepared than most of your competition.

Second, have your mortgage broker or banker pull your credit and check for any problems. Get not only pre-qualified, but pre-approved and not just pre-approved, but under written pre-approved. What this means is that the bank has done everything necessary to approve your loan for a house except the appraisal on the house. A pre-approval letter and shorter mortgage contingency goes a long way when bidding against someone who only has a pre-qual letter. Also, the beginning of the process is the time to fix your credit score rather than when your entire loan hangs on getting your credit score a few points higher.

If there is some way you can do an all cash purchase great. An all cash offer in a competitive bid situation can move you to the top of the list and often reduce your purchase price by $10,000 to $20,000 for deals under $1,000,000 and by as much as $50,000 or more for deals under $2,000,000. Consult with your team before you do this.

You may want to make an all cash offer even if you are going to finance the house later, to free up cash after the purchase. Post-purchase refinancing can be tricky and may affect your taxes, so check with your accountant or tax attorney before you pursue this path. And, the time to do that is before you saddle up and go looking for your dream house.

Also, a high price is good, but if you want to be in your new house in two weeks and the sellers can’t find a new place and arrange a move for two months, your higher, all cash offer, may be DOA. You want to match your other terms to your seller’s needs.

Third, be available. If you are a couple and one of you can’t always take phone calls, what about email or texts? Whenever possible whoever is most available should be able to make decisions for both. Discuss various options in advance so you are both comfortable with this. Also putting in a bid and going on vacation or a trip is a not optimal. Often, an hour or two or even minutes can make the difference in whether you get the house. Making decisions and responding in minutes gives you a big advantage over the competition that can’t get back to the seller until tomorrow.

Fourth, be flexible and reasonable. Don’t let a minor deal point or an item worth a few hundred dollars become an ego issue. Work with your team to come up with other options, particularly when the other side is being unreasonable. Don’t yell and scream. The seller has lived in your house-to-be for years and knows all your new neighbors. You want to arrive in their good graces.

Fifth, be human. Let the seller know why you like their place and what it will mean to you and your family to live there. Also try to connect with each person you deal with; don’t become just another case number.

Lastly, have fun. How often will you get to do this? With a good team you’ve got people to talk with. Even if you lose out the first time around you will have gained valuable experience. You will get a house and often a better house at a better price.

A call for a welcoming Greenwich

I’ve been dealing with a lot of Covid refugees who are going through the ups and downs of buying a house in a tight market. Many of them are scared of moving to Greenwich. Often, they have lived in New York City for decades and really don’t know what to expect. What will it be like for their kids? Will they be able to go to a school here? Will people from Greenwich look down on them? Where do they shop for those specialty items they love? Will there be dangerous wildlife in their backyard? We are all in this together and if you see someone that looks a little unsure of themselves you might ask if you can help. If you get a new neighbor introduce yourself or just drop a welcoming note in their mailbox.

Also, it would be great if each neighborhood association would host a welcome function for our new arrivals. It’s a great way to get some new members and tell people about your community. Associations could do a zoom function or small, social distancing, get-togethers outdoors. Just as we are seeing with business practices, this year is going change Greenwich and accelerate trends already taking place. Let’s make it as pleasant as possible for everyone and having a little fun along the way would be nice too.

Greenwich First Half Neighborhood Report – June Just Keeps Getting Better

This week we start with a quick update on June sales and how June went out like a lion, which given that we are now in our Covid time-shifted spring market is a little to be expected. The rest of the article is look at how our neighborhoods did in the first half of the year.

 

June Sales Update

If you could take one day of the year and clone it for the rest of the year, that date would be June 30, 2020. On that date we sold 12 houses out of 76 sales for the whole month of June. Of those 12 sales, the average price was $5.93 million. A house at 49 Midwood Road sold for $10,750,000 after 435 days on the market and a house at 45 Field Point Circle sold for $12,800,000 after 220 days on the market. In addition, we had sales of $7,500,000, $4,995,000 and $4,200,000 all on June 30th. As I wrote last week, the July 1st increase of 1% in the state conveyance tax for sales over $2.5 million was the motivated factor to get all these high-end deals done before the new tax kicked in.

But let’s get back to those 76 total sales for the whole month, that number is well above the 60 sales we had in June 2019 and even 4 sales above what we had in June 2018 when we didn’t’ have a pandemic. We also have 171 contracts waiting to close which is up 68 houses from last year or a 66% jump from last year.  We are doing better in just about every neighborhood, but three neighborhoods are seeing some headwinds.

The last time the conveyance tax was raised in 2011 we saw our biggest sales month ever with 114 sales in June 2011, followed by our worst July with only 48 sales. We won’t see that this July as we have just too many contracts waiting to close.

THE 2020 FIRST HALF GREENWICH NEIGHBORHOODS REPORT

The tight neighborhoods

                                Glenville

When you look at months of supply the neighborhood that really stands out is Glenville and not so much for its 11 sales, but for its 11 contracts waiting to close for a total of 22 transactions. When you throw in only 17 listing with these 22 transactions you get a tight 5.8 months of supply with contracts which is the best in town. This is down 11.7 months of supply from last year. A lot of that drop is attributable to the number listings going from 28 house listings at the end of June last year to only 17 listings left this month. Tight markets don’t just happen, smart agents and sellers help. While we have a tight market the average list price in Glenville has dropped from $1.13M to $1.09 as sellers are more competitively pricing their listings.

Old Greenwich & Riverside

Last year I sold a house in Riverside to a developer and had another listing cancelled for lack of buyer interest. Riverside was a tough place to sell in 2019 which is unusual. This year Riverside is back and once again running neck and neck with Old Greenwich, a perennial favorite of buyers. Even in a time when people are looking for more space and larger houses, the village of Old Greenwich continues to attract buyers. One factor is the R-7 zone in both Riverside and Old Greenwich, which is mostly north of the Post Road, are smaller lots, but they look good to a family living in a small 2 bedroom apartment in NYC. Inventory is down for these two contiguous neighborhoods by a total of 49 listings to a total of only 118 listings. The average sale price is down in Old Greenwich, but took a big jump in Riverside up by $792K. Anytime you see a change like this, a large part is because of the mix of what is selling. Higher end houses with more space and more land are selling in Riverside, but we are also seeing higher sales price/sf a better indicator of an overall market move.

 

The Rapidly Changing Neighborhoods

                                Backcountry & Mid-Country

Last year we saw sales jump 30% in backcountry Greenwich and also go up in mid-country (which for GMLS data purposes goes all the way down to the Post Road). This year that trend is continuing. Mid-country is the new sweet spot in Greenwich with sales up 20 houses from last year and contracts up by 47 houses while inventory is down by 52 houses to only 187 listings. The average price, average price/sf and sales price to assessment ratio are all down, as motivated sellers are covering their bases just in case we do see a depression next year when their values might drop. While the stock market is at record levels and is not predicting a depression, it’s a good time for sellers to take some of their chips off the table.

In backcountry, sales are up 4 houses, but contracts are up 27 and listings are down 31. The result of all that is when you look at months of supply with contracts you only get 12.4 months of supply. Even if you just look at the actual sales months of supply, that is down 10.4 months from last year. People want land  and houses with amenities; backcountry is one of the best places to get that.

Cos Cob

Cos Cob has seen a strong rebound after being our neighborhood with the poorest results in 2019. Now 2019 results looked down in Cos Cob, because it had done so well in 2016-2018. In 2020, Cos Cob is back like those prior years.  Sales are up 10 houses and contracts are up 14 houses while inventory is down 10. This result in a competitive 9.3 months of supply. On the sales only side, months of supply is down 10.2 months of supply from last year to 11. 3 months of supply.

 

Higher density neighborhoods

Byram, Pemberwick and North Mianus have seen the greatest appreciation since the Tax Assessor last did a revaluation in 2015. Byram is actually up 33% from 2015 when you compare the sales price to the assessment ratio. Pemberwick is up 18% from 2015 when you look at the same assessment ratio. Lots of folks want to live in Greenwich and those are our most affordable areas. This year a combination of all this prior appreciation and a desire for more social distancing have made these three neighborhoods slower this year than last year.

In Byram, we have 14 listings and only 2 sales so far this year. In Pemberwick it is 8 listings and no sales. North Mianus was our hottest neighborhood last year, but this year months of supply are up 3 months from last years to 10 months of supply. If you throw in the 2 contracts pending and only 5 listings its drops to a very active 7.5 months of supply, it’s just not as hot as last year.

All three of these neighborhoods are small so a few sales would change things dramatically, but it is a little strange that these lower priced areas have not done as well so far this year, since the R-7 zones in Old Greenwich and Riverside are doing well.

                Summary

For the town overall, inventory is down 20% and this is true across most every neighborhood. Sales are up 18% and once again this is widespread with big jumps in Cos Cob, Riverside, and mid-country. The really dramatic change is in contracts which are up 66% as this market is just getting hotter. The areas that are hot right now based on contracts are backcountry, mid-country, Riverside and Old Greenwich. As I write this, I’m negotiating three deals, two in backcountry and one in mid-country. Trying to find good listings in those areas is tough and if you are looking to sell now is a good time to list.

 

 

 

 

 

Greenwich Homes Sales Surge in June 2020 – First Half 2020 Looking Good

High-End Sales have an Excellent Month

At the end of May we had 299 sales and contracts, then June came along and sales and contracts surged to 436 houses sold or under contract; an increase of 50% in one month. The story at the upper end is even more dramatic. Above $3 million we went from 68 sales and contracts at the end of May to 117 sales and contracts in June, an increase of 72%. By far our most dramatic jump was closed high-end sales over $5 million which are up 286% in just one month, but more about that later.

The growth in these sales and contracts continue to escalate. Back in the week beginning May 4th we only 23 transactions, then it was 33 and 43 in a week. We dropped back to 33 transaction for the 4-day week of Memorial Day. The next week we jumped to 53 transactions as made up for the 4 day prior week. Then 44, 48 and 52 transactions. This week, once again only a 4-day week, we had an amazing 62 transactions

This dramatic jump in sales is being driven by three factors. By far the largest is the continued flood of Covid buyers from New York City, who primarily fall into two categories. Most of these buyers are younger families who are looking in the $1 – 2.3 million range. These buyers have been cooped up in a New York City apartment, often with multiple children. More square footage, a yard, parks, and beaches look pretty attractive to them.

A second less obvious sub-group of Covid-motivated buyers from New York City are newlyweds and DINKs. Pre-Covid, couples that met in New York City would move in to whichever person had the nicer apartment and live there until the first or second child came along. I’ve showed houses to lots of couples where the wife is pregnant and wants to be settled in a new place before the baby is born. In the meantime, they would live in New York City enjoying all of the restaurants, cultural activities, and nightlife that NYC is so famous for. In the Covid era, all those activities are either gone or still dangerous to enjoy. As a result, many couples are skipping the NYC, Dual-Income-No-Kids period and moving directly to Greenwich. I’m working with three couples just like that.

As of 7/2/2020 Inventory Contracts Last Mo. Solds Last Mo Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 5 3 0 3 6 9 5.0 4.2 #DIV/0!
$600-$800K 16 12 1 13 15 27 6.4 4.4 16.0
$800K-$1M 30 9 4 13 17 26 10.6 8.7 7.5
$1-$1.5M 57 25 9 34 56 81 6.1 5.3 6.3
$1.5-$2M 77 30 14 44 42 72 11.0 8.0 5.5
$2-$3M 118 45 12 57 59 104 12.0 8.5 9.8
$3-$4M 91 24 16 40 38 62 14.4 11.0 5.7
$4-$5M 45 11 5 16 12 23 22.5 14.7 9.0
$5-6.5M 53 6 5 11 11 17 28.9 23.4 10.6
$6.5-$10M 50 4 5 9 5 9 60.0 41.7 10.0
> $10M 36 2 3 5 4 6 54.0 45.0 12.0
 
TOTAL 578 171 74 245 265 436 13.1 9.9 7.8

The second big group that is increasing sales in Greenwich are Greenwich homeowners and renters that are upsizing. Our Greenwich residents that have been waiting for the post-recession market to turn are seeing it and getting out ahead of ever-expanding market demand. Right now, most houses are priced at 2019 and pre-Covid 2020 prices. Greenwich buyers have another month or two to enjoy these prices. After that, we are going to see the closing prices of our 171 contracts. Many of these contracts, were signed after bidding wars involving multiple buyers and the contract prices are over the list price.

Indicative of this hot market is that in June, 32 of the new listings never made it to their one month anniversary. When we find out the sales price after closing, these prices are going to start the price resetting process. Another sign of a hot market is that our average days on market for sales and contracts jumped from 149 DOM last year to 183 DOM this year. Of the 171 contracts we have signed as the end of June, 7 were actually on the market for more than 1,000 days and 27 were on the market for a year. When the stale inventory is selling you know it’s time to get moving if you need a house.

The third thing that is driving high-end Greenwich market in June is the state’s new Gold Coast conveyance tax. Last year the Connecticut legislature increased the conveyance tax on sales over $2.5 million by 1% effective July 1, 2020. Of the 124 sales in CT over $2.5 million so far this year only 11 were outside of Fairfield County. Within Fairfield County near all the sales were in Greenwich, New Canaan, Darien and Westport.

The July 1st effective date of the $2.5M+ tax meant we saw a lot of deals that would have closed in July and August get pushed up to June. On a $10 million dollar sale, the seller would save $75,000 by closing on June 30th rather than July 1st. This was all the motivation many high-end buyers needed to closer sooner. As I mentioned above, sales above $5 million were up 286%. We went from 7 sales over $5 million at the end of May to 19 sales at the end of June. Of the 12 sales in June over $5 million, 7 of them over $7 million compared to only 1 sale over $7 million in the first 5 months or an increase of 600%.

We had 2 sales over $10 million occur on June 30th and 2 sales from $5 – 10 million on that date out of 11 sales. Unfortunately, this also means that July will likely be a poor month for high-end sales as the June accelerated deals aren’t there for a July closing. Right now, we have 12 contracts for houses listed over $5 million, all of whom will be helping to fund the Connecticut treasury by paying the higher conveyance tax.

One of the fun things to do is take these high-end June sales and annualize them. When you do that our months of supply over $10 million drops from 54 months of supply to 12 months of supply. From $6.5 – 10 million the drop in months of sales is from 60 months, or 5 years of supply, to 10 months of supply. Would that we could keep these June sales rate up all year round. Even with our present sales rate, things are still looking up for future sales over $3 million. When you include contracts over $3 million our months of supply is lower than when you only look at sales. This indicates an improving market though we may have to wait until August to see the number of sales increase.

 On the inventory side we are still down 21% from last year, but fortunately we are seeing lots more inventory come on the market, particularly in backcountry and mid-country where we need new listings. I just put on 14 Gray Oaks Lane for $3.65 million and it has been getting good interest as mid-country seems to be the new sweet spot in the Covid-era, not too far from town, but with good acreage for outdoor activities and social distancing.

14 Gray Oaks Lane, 5 BRs, 5 BAs, 2.28 Ac, $3.65M

Our 74 June house sales were better than June 2019, when we had 60 sales and a better month than June 2018 when we had 66 sales. We still have a ways to go to reach our 10 year average of 86 June sales, but the trend is definitely in the right direction.