SB 1024 Will Cause Real Problems in Greenwich, Fairfield County & Most CT Towns

How to Actually Create Affordable Housing in Greenwich

I’ve been looking into the very controversial SB 1024 and believe that it will destroy more affordable housing than it creates, while causing lots of damage to towns and cities across the state. The one group that will be greatly aided by the bill if enacted are developers of mid to large size developments.

              We have lots of good local developers who work in a difficult environment

Developers get a bad rap. They are entrepreneurs with a vision who put their own money at risk to build something better. The system they work under, particularly now, is difficult and risky. Yes, they usually make a profit, but I don’t think there is anything wrong with that. The good thing is that our local developers generally want to build something good for the community. Multiple times in meetings, I’ve heard developers say, “I can build that, and I’ll make money, but it’s not what I want to be known for. Building cheap and lowering values is a negative sum game for them.

The system these developers work with is too expensive, takes too long, is too balkanized, too adversarial and is way too uncertain. All of these factors drive up costs, and lots of these costs don’t give value to buyers. Amazingly, SB 1024 makes things much easier and will result in something much worse. It’s proponents actually think that this bill will only make small incremental changes and can’t seem to see what the big deal is. They make the false assumption that if we build more units, more supply will drive prices down and lower prices will lead to greater diversity in towns and cities.

The problem with this approach is that the New York City metropolitan statistical area is 20.2 million people according to the census bureau. So, Greenwich’s 62,000 people represent 0.3% of that population and an even smaller part of the residential units in the NYC MSA. We have essentially insatiable demand for houses. Adding a few hundreds or even thousands of unit in a desirable area in this sea of 20 million potential buyers is not going to satisfy this demand.

              21st Century blockbusting

 What this bill does is give major financial incentives to developers, and particularly out-of-town developers, that can build big, cheap and fast, to build quick and move onto another town where they aren’t known.

These developers are not going to build affordable units and SB 1024 doesn’t require that they do so. It should really be called the OverDevelopCT bill. These developers are going to build as big as they can, with as many units as they can. The result is likely to be a brief glut of high-end apartments, that instead of renting for $12,000 – $15,000 per month will rent for $9,000 – 12,000 per month, not most peoples idea of affordable apartments.

The one way that the proponents could accomplish their goal would be through the uglification of Greenwich, which I call legal block busting. In this 21st version of blockbusting, the developer goes in and tells all the folks on the block that he’s about to build this big, apartment building, or two or three of them, right next door to them on their block. He points out that once these are completed, the streets are going to be blocked with cars, since under SB 1024 there is little or no onsite parking required under the bill.

While he says that’s the bad news, the good news is if you sell now, I, the developer, can pay you a premium, since I now can build multiple units on your lot in what was a one-family zone. Unfortunately, if you don’t sell to me now, the 50% limit on this type of development is going to kick-in and you’ll be stuck on a congested street, surrounded by over-sized apartment buildings with no ability for you to do the same. Your house is going be worth less, as no one will want to build a nice house in this soon to be congested, neighborhood, so sell now and make more money.

              Loss of affordable and historic homes

The other issue is that many of these houses and duplexes that are going to be torn down are presently some of our more affordable units. The effect of this bill would therefore be to decrease the number of affordable units, while creating a glut of high-end units. We are likely to many older, and often historic homes, torn down and see a fall in value of the ones that aren’t torn down. Bottomline, more high-end rentals, fewer moderately priced houses and duplexes, historic homes torn down for new multi-family rentals and more traffic congestion in already congested areas.

Some proponents are calling such visions alarmist, but the economic incentives are in the bill and I don’t see any limitations other than a preliminary injunction from the superior court to temporarily stop this kind of development. The bill gives developers approval as a matter of right and requires development of at least 15 units per acre. I don’t see any legal impediment to dozens of these projects starting up this year.

For alarmist, how about sewer lines and our one sewer plant over-flowing as the bill proposes lower standards for sewer volumes. That I do believe is alarmist, and I don’t think it is likely to happen. In discussions with people in town, we come up with several worse options that this bill would allow, but I really don’t want to publicly disclose these ideas that would cause Greenwich even more problems.  

              Some reasons we need affordable housing

David Ogilvy, several years ago, when we were on working on a deal together, told me the most important thing is to try to always do what’s best for the town. In the long run everyone is better off. I am a strong believer in more affordable housing. I moved here in 1967 and the town is not what it was then. We are seeing more and more high-end units replacing our more modest homes. Our volunteer fire companies are having trouble finding enough people. The over-scheduling of adults and kids and the lack of really free time for everyone have led to different town.

We are seeing a less diverse range of means, but not along racial and ethnic lines. Check out the United Ways’ just published online 2021 Greenwich Needs Assessment (https://greenwichunitedway.org/needs-assessment). It’s an excellent summary of the issues that are really facing Greenwich. It points out that our minority population is actually up a little.

While we have some very wealthy residents, the United Way has also pointed out that 7% of our residents live below the poverty line and an amazing 22% fall into a group called Asset Limited, Income Constrained, Employed. These are folks who earn more than Federal Poverty Level, but don’t have significant savings and just barely meet their basic needs. They have little money for any emergencies and are unable to handle even a short period of unemployment. In Greenwich, this group is 22% not that far below the state-wide percentage of 27%.

We do have housing for these folks, it’s not always good housing, but people upstate would be surprised that 29% of the residents in “super-rich” Greenwich are struggling to meet even a basic living standard. Many of these folks are the ones that make this town work in town government, local businesses, our charities, religious institutions and volunteering. They are an important part of the town and we need to have affordable housing available for them. They add to the rich fabric of Greenwich.

What is the law now as to affordable housing?

The main statute presently promoting affordable housing in Connecticut is Connecticut General Statute 8-30g. This is the statute that allows developers to appeal denials of affordable developments by local planning and zoning committees, if the town doesn’t have at least 10% affordable housing as defined in the statute. In court, the town can not argue that the development exceeds zoning limitations. The court has to permit the development unless the town can show that the proposed development would endanger, public health, safety, or other matters such as the environment.

The law presently has two problems. First for a development to be considered an affordable development:  

(1) 15% of the units must be deed restricted to households earning 60% or less of the area median income (AMI) or state median income (SMI), whichever is less, and

(2) 15% of the units must be deed restricted to households earning 80% or less of the AMI or SMI, whichever is less.

To meet the 80% state median income the renter can’t make more than $42,000 per year and at 80% the lower state-wide income limitation is $56,000. By using 60% and 80% of the state median many projects that would otherwise work in Greenwich don’t generate enough income to be viable commercial developments. These state-wide median based incomes exclude our first-year teachers, firefighters and police officers, since their starting salaries are little above the 80% statewide average.

We should be able to use the local area income, which would allow for much higher rents and make more projects viable. For folks that are resistant to affordable housing, the statewide income standard means that 8-30g has resulted in minimal affordable housing in Greenwich. It’s a feature, not a bug in the law for these folks.

The other problem is that in calculating whether a town has met the affordable housing 10% minimum much of the affordable housing in a town is not counted. The statute only counts (1) government-assisted housing and (2) low-income houses, mobile homes and accessory apartments that are deed restricted as affordable for 40 years.

At the present time 5.3% of our housing qualifies under this restrictive definition. This is 1,371 units out of a total of 25,631 housing units in town. Our Planning and Zoning Commission and Greenwich Communities (formerly called the Housing Authority) are to be congratulated for having this many units that meet the state requirement given the high cost of land in Greenwich.

              How do we create more affordable housing?

The high cost of land in Greenwich is the biggest problem to creating more affordable units. The land around the train station and along the Post Road are particularly valuable for commercial businesses. To make units affordable you have to have either, more units per acres, lower land cost, or free land.

Our present affordable housing law, 8-30g, does not do a good job of creating affordable housing. It allows for greater density, but the developer gets 2.3 .regular units for every affordable unit. At the present time we are 1,200 affordable units short under the 10% statutory definition. This means that we would actually need 4,000 units in 8-30g compliant development to net 1.200 affordable units.

              Count all affordable housing

To my mind, two things should be done to improve the situation. First, count the affordable housing that every town actually has. I would count all units that meets the 80% local standard should be toward the required percentage. For units that can meet the 50% standard, they should be counted as 1.5 units. This will distinguish towns like Greenwich that a diversity of affordable housing from towns with regulations that prohibit types of housing that would be affordable. This will incentivize town and developers to create more privately funding affordable housing.

All market rate units, whether receiving government assistance or not, should be counted, since some of our rentals in-town actually meet these limits. Also, our accessory apartments, which P&Z just made easier to do, could be built to meet these standards. Property owners that are willing to rent out their properties at these lower limits should get a property tax break.

These affordable units should not need to be deed restricted. The owner should annually certify what the rent is and that it is rented. SB 1024 doesn’t require that the units be rented, so your neighbor can build an apartment in their back yard and deed restrict it, so it’s counted under 8-30g, and use it as guest house. That’s not helping people who are looking for affordable house.

Second, the town should build, or take over, rental housing that is 100% affordable. Why build 2.3 market units just to get one affordable unit. While it would be highly controversial, these units could be built on state or town land saving the cost of the land. A few large developments tucked away to my mind would be a better alternative than lots of mid-sized buildings with one or two affordable units.  

For a really controversial proposal, the town could purchase presently existing company housing from the hospital, private schools and other facilities giving these institutions an infusion of cash and us a big boost in affordable housing. (I don’t say it’s likely, but when your write a column or propose legislation you can include anything you want.)

              Have the state donate land

We could also get the state to donate the air rights at the Greenwich railroad parking lot and some of the rights-of-way along I-95 for moderate cost housing for local workers that can’t afford the going rates, particularly when they are starting out.

              A Housing Trust Fund

Planning & Zoning also has an excellent idea which is to create a not-for-profit Housing Trust Fund to be financed with private money, but available to help assist some public housing projects. Companies could get housing for employees; individuals could get tax deductions and the town could meet its requirement for 10% affordable housing set out in 8-30g.

To be clear there is no 10% goal in the SB 1024, so unless that fails to pass or can be amended to include such a provision, we could still end up with the nightmare of uncontrolled development. This bill has strong support in many cities and some town, which baffles me. Do the local elected officials and town commissions really want to give up control on what can be built in their municipalities.

As I mentioned in my last article this is no time to sit back, if you know someone in these other towns and cities that are supporting, this uncontrolled development, you might give them a call and ask if they know what is likely to happen in their cities and towns.

SB:1024 – The “End of Zoning as You Know It” Bill

I support affordable housing in Greenwich and have done so for decades. Back in the ‘80’s, I drafted the original affordable accessory apartment ordinance and helped usher it through the Greenwich Planning & Zoning Commission. In the 90’s, I was Chair of the Selectmen’s Affordable Housing Commission for several years trying to coordinate multiple town agencies to make Greenwich welcoming to a diversity of people and economic means. I want to preserve the character of Greenwich and enhance its already diverse population. We are about to see a bill that will do just the opposite, while greatly changing Greenwich.

SB 1024 is a blockbuster bill just introduced in the Connecticut legislature that will do a lot of damage to the quality of life in Greenwich, particularly central Greenwich and will produce only a little affordable housing. We also have another bill that wants to create a statewide property tax, which in combination with SB 1024 would be create synergistic badness for Greenwich.

What SB 1024 will do if passed, and it has a very good chance of passing, is to bring in developers from outside this area to build lots of multi-family housing to rent mostly at market prices. The proponents of this bill, “Desegregate Connecticut”, are of the opinion that if you build lots of new housing that housing prices will fall, and this will desegregate Connecticut. I think that is extremely unlikely given that we live in a metro area of 14 million plus, lots of who would love to live in Greenwich, a town of only 62,000. What you are more likely to get are lots of new downtown and Post Road units renting at premium, not affordable prices.

There are several underlying ideas that have been incorporated into the bill, but I can’t tell you how they would work even after multiple readings of the bill. Over the years, I’ve worked on a lot of legislation; as an attorney, testifying twice in front of the Connecticut legislature, as a lobbyist in Washington and speaking at a lot of public hearings here in town on P&Z and other regulations.  I thought I was losing it in my old age, because I couldn’t figure out the details of how SB 1024 would work here in Greenwich. Luckily for me, and unfortunately for Connecticut, everyone I’ve discussed the bill has said the same thing too; they don’t know how it would work.

Let’s take a look I what I think the bill says.

              WHERE COULD YOU BUILD

The bill proposes high-density development around the primary transit station for each municipality. For Greenwich, this means our train stations and it probably means the Greenwich train station. Unfortunately, the definition of “municipality” is somewhat convoluted so in a worse case situation it could be all four train stations. The bill proposes allowing the building of high-density complexes within a half-mile of the transit station.   The odds are that this is all of downtown Greenwich, including parts of Mead Point. This transit area will be looking at an intensity of development that we have never seen before and under this bill the town can’t stop or even slow down this development.

The bill however goes on to say that the half-mile radius can be expanded to 1 mile if there is “a public right of way that directly connects to such transit station with adequate sidewalks, crosswalks and other similar pedestrian facilities”. Central Greenwich is a great place to walk, and a 1-mile radius would extend from Greenwich Hospital to most of Belle Haven and Field Point Circle.

In addition to central Greenwich, you also have two other areas for increased density projects; one is the “Main street corridor” and the other is any lot in our single-family zones. The “main street corridor”may only be the Post Road for three-quarters of a mile around the top of Greenwich Avenue or it may mean the entire Post Road from NY to Stamford. I’m guessing it’s the entire length of the Post Road, but I’m not sure. (It might also mean some of King Street also.) This main street corridor would extend along the Post Road and for a quarter mile on each side.

              WHAT COULD YOU BUILD?

If it is central Greenwich and the Post Road corridor, the question is what could you build. This is the really interesting part; you can build higher density in the transit district and the main street corridor at a “minimum of density of 15 units per acre”. To me that means that on our R-20, 0.46 acre lots, you would have to build at least 7 units.

 What I can’t figure out is how big that 7-unit building can be. It might be limited to the present FAR of 4,500 s.f. in the R-20 zone, that would be 7 units of 643 sf. It might be limited to half of the lot size or 10,000 square feet per floor up to 37.5 feet the height limitation in the R-20 or it might have no limit. Also, the economics would strongly encourage developers do assemblages of properties, and to buy oversized lots so that they could put up much larger buildings.

In the transit district you may not have to any on-site parking. The presumption is that everyone will take public transit. In the main street corridor developer would only need a max of 2 parking spots per unit. So, a four-bedroom unit with 6 people would still only need 2 parking spots. Imagine what trying to drive on Milbank or E. Elm will be like in 2022.

In the single-family zones each property could build an accessory apartment. This means a guesthouse of up to 1,000 s.f. with a full kitchen. This apartment can be either be in the house, with no need for a separate entrance, or it can be in a separate building. Contractors will have field day building elegant pool houses with full kitchens. Parents will be able to send their kids to play in the backyard and not come back until tomorrow, oh and make your own breakfast too.

The bill has no requirement that these actually be rented, they just have to be deed restricted for 10 year. Presently in Greenwich, if you build an affordable accessory apartment you had to certify each year that it was still be rented at an affordable rate. The bill will abolish both our affordable accessory and elderly accessory apartment regulations.  

The bill also eliminates three key zoning provisions that presently zoning board members can use to turn down projects. Today projects have “to provide adequate light and air; to prevent the overcrowding of land; [have] to avoid undue concentration of population”. No longer will overcrowding be a factor to be considered or can you complain that the proposed big apartment building will block the sun or air circulation. Under this bill density as they call it in the new bill or overcrowding as it called in the present law is actually being encouraged in what are already our most densely populated areas.

              “AS OF RIGHT” IS WRONG

Probably the most dangerous concept in the whole bill is that all of the above can be done “as of right”. This is the so-called “permit zoning.” If this bill is seen as having a good chance of passing then developers will option lots of land in central Greenwich and along the Post Road. Once the bill is signed they close on the land and wait for it go effective on October 1, 2021. In the meantime they pull out there previous plans done in Norwalk, Hartford, Yonkers and New York City where this type of high-density development is more common and tweak the plans for that site. (This is what will give out of town developers and advantage. On Friday, October 1, 2021 we could see as many as a dozen or more of these permit applications filed with the Building Department. Provided, they comply with the Building Code the Town would have to approve them by December 9th and construction could start the next day.  Unlike the present 8-30g affordable house process, it appears that public health and safety, nor environmental issues can be considered. Sewer capacity may also not be an issue. (Lack of sewer line capacity was a primary factor in denying approval for the 355 unit proposal on the Post Road Ironworks site.)  

The only limit to how many units can be built is that the town can limit these new high-density development to 50% of the downtown lots. It’s not clear whether that means the town can designate which half of the area can be developed or that they have to wait until there is a high density development on every other lot, before these units can be stopped.

“As of right” means no P&Z review, no public hearings, but still likely lots of lawsuits. Whether the town can get a preliminary injunction to halt the construction of dozens of projects is not at all clear. It’s also not at all clear as how many developers would go ahead in such a circumstance.

 As I said I’m an advocate of affordable housing. I think accessory apartments are a good way for widows to stay in their houses and for young couples to buy their first house and for kids who grew up here to find an affordable place to live. The town could have done a better job of telling people about our elderly accessory and affordably accessory apartments, but the town needs some control of these units which the proposed permit zoning does not permit.

We also don’t need a statewide property tax. As with all taxes it will start off low, but just as the income tax did, it will grow. Every time legislators need to plug a budget deficit hole, they can change one number, the state-wide mill rate, and poof the deficit is gone. Then we’ll get more tiers and the politically connected will get exemptions. It’s a really dangerous tax.

              SO, WHAT CAN BE DONE

The proponents of this bill have been organizing for years and are trying to apply a machete to every town’s regulations, when towns are very diverse. DesegregateCT.org lists 70 organizations that support them. You can start by contacting your state senator and representatives. Luckily, we have legislators in both the Republican and Democratic caucuses. Given the anti-Trump backlash, that swept in more liberal legislators, stopping this bill will be hard, so the best we may be able to do amend it, and let’s really hope it can be clarified, so at least we know what the rules are.

The legislators have already sat through a day of testimony, and I mean a day that started on one day and ended in the morning the following day, but I and other people couldn’t testify. There should be more hearings and they should be done regionally.

You can also check out organization that you may be members of who are supporting DesegregateCT and let them know that you don’t support SB1024 as proposed. We, and they, can support desegregating housing. The Connecticut Conference of Municipalities of which Greenwich is a member is a supporter of DesegregateCT. CATIC who writes title insurance policies through their attorney clients supports DesegregateCT through their foundation. Other members are the Sierra Club, Connecticut Homebuilders, AIA Connecticut (architects), APA CT (town planners) and ironically, Connecticut Preservation Action.

As to the state property tax; kill it. The state is getting billions of dollars from Washington as part of pandemic relief. Now is not the time for more taxes.

I like to say stay tuned for upcoming developments, but this time I’m urging you to get up and do something, now, before uncontrolled upcoming developments overwhelms us.

Where Has All the Inventory Gone?

What’s keeping housing inventory off the market?

by Mark Pruner

mark@bhhsne.com | Berkshire Hathaway

Inventory is way down in Greenwich. In fact, it’s at all-time, record lows. Our previous record low for inventory was 299 single family homes a couple or years ago on January 1st, just after all the year-end expirations hit. At the end of February, we only had 277 listings and this was actually down from January 1st which is traditionally the low point of the year for inventory. Our inventory traditional grows slowly in January, and the first part of February, and then starts to accelerate by the third week of February as the “spring” market starts (which I guess is better than calling it the late winter market, which is what it really was this year).

As of March 10,2021 we have 281 listings, so we might be starting to see more spring inventory come on faster than it is going off, but as with most things Greenwich real estate it zig-zags week to week. Our transactions, contracts plus sales, started out strong and have continued strong. We are up 94% on transactions through the end of February. This can’t keep on much longer, because we are running out of inventory.

As of the end of February, inventory had dropped 46%, which is 236 fewer listings that last year at this time. We came into the new year with very low inventory, and it got worse. New listings are coming on slower this year than last year. In 2020 through March 10th we had added 236 listings, this year we have only added 191 listings or a drop of 45 listings. We are down 19% in new inventory this year and it’s even worser than that.

Last year we a lot of shadow inventory, whose owners had been waiting for years to put their house on the market and finally did so in 2020.  

Our inventory dropped in 2020, but then it held steady, so new inventory was coming on as fast as sales and contracts could take it off albeit with below average total inventory.  The result was sales were up 63% last year and most of this increase was in the last five months of the year. From August to December sales were often double what they normally are. Then came 2021 and our sales have continued to be almost twice what they were in the pre-Covid months of January and February 2020.

At the same time, inventory has dropped in a zig-zag pattern in 2021 so far. It looks like we still have some shadow inventory left from $5 – 10 million where our 2021 listings are actually up by 20 listings. This has kept up our months of supply for that price range from dropping even more, but the question is for how much longer. If you exclude the $5 – 10 million price range, we are actually down 65 new listings from 2020. Under $1 million we have had only 18 new listings down 54% from last year.

New Inventory listings from 1/1 – 3/10/2020
New listings from 1/1 – 3/10/2021

What’s also remarkable is of the 191 new listings that we have had come on this year, 67 already have contracts and 18 have already closed. Now, of those 18 listings, 12 actually had zero days on market. What that means is that these were private transactions, that are being reported so other agents can see the selling price and so that the listing and selling agents can take public credit for the transaction.

              What’s keeping listings off the market

With the market as hot as it, many listings are not making to a public listing. Agents announce at their office meetings that they have a listing coming on and another agent says, “I think I have someone for that.” The GMLS implemented the NAR required rules last year which prevents agent from marketing these so called pocket listings outside of their firm. If you look at the contract, the listing is with the homeowner and the brokerage firm, so the brokerage is really marketing the listing to itself.

Interestingly, many homeowners who might have listed their house last year during the dip in Covid cases are reluctant to list their houses now, since if they just wait a couple of months, most of the people who come through their house are likely to be vaccinated. What’s a few weeks delay in a rising market.

Another factor is that we have practically no new construction. What we think of as new construction is really replacement construction. I sold three land listings last year, one truly was raw land, but one was to replace a house that had burned down and one was an oversized lot with a house to be torn down plus a subdivided lot. So, four lots sold that will only add two houses to our housing stock.

The other thing we have talked about is the apparent disappearance of our shadow inventory under $4 million last year. From $4 – 5 million we are up 1 more listing in 2021 than in 2020 we do have a gain of  19 more listings this year over $5 million. What I failed to mention earlier is that we entered 2021 with well below average high-end listings. So we are actually down 10 total listings over $5 million even with 19 more new listings this year. The only real increase in inventory over last year is from $6.5 – 10 million where we one more listing.  

If you look at the percentage change chart comparing month end February 2020 to the end of February 2021 one of the other things you’ll notice is a lot of cells with Excel error messages. The error messages mean there were no sales in that category last year. (BTW: I hate whoever at Microsoft came up with  “#DIV/0!” for this error. It’s ugly and a pain to deal with.) If you scan the percent change chart all these error messages are above $6.5 million and below $600,000. The former is due to no sales at the beginning of 2020 at the high end and later is due to no inventory under $600,000 this year.

Another blogger here in town accused me of being a Pollyana, which I look at another way of saying I’m optimistic. The optimist says the snow is gone and is being replaced by snowdrops. Lots of folks have been vaccinated and lots more are every day. Rising price will encourage more people to put their houses on the market and homeowners will push for public sales to get multiple offers rather than the private sales. All this will result in us getting back to 600 listings by the end of March.  (I think that may be a little too optimistic, I’d be happy to get to 400 listings.)

Stay tuned our market continues to be interesting.

February 2021: Greenwich Real Estate Transactions Double – Inventory Cut in Half

February 2021: Greenwich Real Estate Transactions Double

 Inventory Cut in Half

The number you want to remember for Greenwich real estate in February 2021 is “2”. Our sales and contracts are 2x what they were last year in the second month of the year. Our February sales were more than double last year, and contracts were nearly double. Our inventory is down to barely 1/2 of what it was last year. Our median price for 2021 sales so far is $2.2 million, which is up almost 20% from February last year. We have too little inventory for sales to continue at this pace.

Once again, the Greenwich real estate story has been turned on its head. Sales are important, and they are up this year. To be precise sales for the first two months of the year are up 68 sales from 2020 to 129 sales this year or an increase of 90%. Our contracts are up from 75 in 2020 to 148 contracts in 2021 or 97%. While this is a stunning change, it is not what’s going to define our market in 2021; that is our inventory numbers.

Our inventory is at record lows. As of the end of February we only had 277 single family home listings in Greenwich. This compares to 513 listings at the beginning of March 2020. We started the year at 287 listings also a record low and briefly struggled up to 300 listings, but since then we have actually been drifting down in the net number of listings. Right now, we should be adding dozens of listings each week as our spring inventory comes on the market and sales are usually at their low point for the year.

When you look at certain price categories you can see just how tough it is for buyers out there. From $800,000 to $1,000,000 we have 7 listings; last year at this time we had 25 listings. We actually have almost as many contracts as we have listings in this price range. The result is that our months of supply in this price category went from 16.7 months of supply last year to 2.8 months of supply this year or a drop of 83%.

Under $600,000 our months of supply is zero, as in we don’t have any houses, when at least last year we had 4 listings. This really speaks to how unique our market is. According to the NAR, the median house sales price for the entire US in January was $303,900. Half of the houses in the U.S. sold for less than $304K and that median sales price was actually up 14% from last year. In Fairfield County as a whole, the median sales price was $550,000, which was up 22% from January 2020 according to the Smart MLS. Right now, the lowest price house on the GMLS is $625,000 more than twice the national median and $75,000 higher than the Fairfield County median sales price. We live in a very unique market.

It’s not just the lower end of our market that is seeing these remarkable year over year changes. All the way up to $5 million we are seeing 6 months or less of supply. When you throw in our 97% increase in contracts, then we are seeing about 6 months of supply all the way up to $10 million.

Above $10 million we have 23 listings down 21% from last year’s 29 listings. We are looking at 15.3 months of supply at the ultra-high end due to our 3 sales (and we have two more ultra-high-end contracts). I can’t compare these sales to last year’s sales as last year we had no sales over $6.5 million last year through February. In fact, in 2020 our first sale over $6.5 million didn’t happen until May 11, 2020 despite having over 80 listings.

                Inventory our 2021 sales determinate

Inventory, at all price ranges, is going to define what kind of market we have this year. If we get back to anything like normal inventory levels, we are likely to have a very good year. We have two big Covid related factors that are driving our market. Clearly, we are seeing many New York City families and other individuals looking for more space in their homes and no shared hallways, stairs, or elevators. They want to be able sit in their backyard and not have to wear a mask. The pre-pandemic perks that kept people raising children in a 1,200 s.f., NYC apartment are all shut down or have limited access. Museums, concert halls, lectures, exhibitions, and restaurants aren’t available or are restricted, making those apartments feel smaller every day. NYC is just not as cool as it was before.

The other factor that doesn’t get nearly the attention that it deserves, is the number of Greenwich families that decided to upsize in 2020. I had six sales last year where the buyers were doing just this. I was elected to the Board of Assessment Appeals and we are hearing assessment appeals this week. Three quarters of the appeals that I heard were from Greenwich residents who had bought another house here in Greenwich.

It could be that our out-of-town buyers didn’t know about the appeals process, but I will say that every buyer I had last year asked about taxes and assessments. It could also be that our local residents know how to find particularly good deals even in a pandemic. Regardless, lots of our Greenwich residents have been upsizing and our older homeowners continue to downsize here in Greenwich at similar historical rates. Some are going to Florida and other southern climes, but they have already done. The impression is that in the Covid era, that’s increased, but there is no good way to quantify people’s reasons for moving.

One thing that is clear is that we had lots of local homeowners that were willing to list their houses last year. Our sales were up 334 houses in 2020 over 2019 for total sales of 861 houses. Much of this additional inventory were from the so called “shadow” inventory of people that had been waiting years to sell. The question is how much shadow inventory is left, based on the first two months, the answer maybe not much. Then again sellers may be waiting for the crocuses and the climatic spring.

                The Covid Housing Paradigm Shift

One of the main factors driving our intra-Greenwich buyers is that lots of Greenwichites need a different house. Today’s buyers want two, and even three offices. Kids also need virtual schooling area(s). Parent’s don’t want the school site to be in a remote bedroom on the third floor. At the same time, we are seeing some movement away from the very open floor plan. When the whole family is home, the whole day, for the whole week, having some private get-away space becomes a necessity.

The next couple of years will show whether these shifts in peoples housing needs becomes the new normal or if this is only a phase that will pass when Covid passes away. Given that the present predictions are that Covid may hang around much like the flu, albeit at much lower number of infections, the most likely result is that we will see a little of both. Some renters will return to NYC permanently and some pandemic renters have decided to take up full time residency here.

                Summer rentals

What isn’t going away are summer rentals. Many Greenwich homeowners who rented their houses last summer found it was a nice way to make a good amount of money in short time. It looks like most of the tenants liked their summer rentals as there are presently zero summer rentals available, though inquiries show that the many landlords are re-renting their houses again this summer.

                A good time to list

I hear that some people are waiting for warm weather to list their house. With all the snow we’ve had it doesn’t look very springy, but it’s not the calendar or the weather that determines when the best time to list a house is but supply and demand. We don’t have much of the former and so have lots of the latter so now is a good time to list a house.

 Stay tuned from a real estate viewpoint, 2021 has the potential to be even more nail biting than was 2020.