What’s the Hottest Real Estate in Greenwich’s Hottest Market

I was going to write this great article about what price segments were hot in Greenwich’s hottest year ever, but the numbers don’t support that kind of analysis. It doesn’t support it, because all the segments are hot, if you define hotness as the percent of listings in each price range that sell at or above their original list price. When you look at the pie charts of what price ranges have the most over list, it looks eerily similar to the pie chart of all sales by price ranges.

So far, we have had 733 sales for the year through this week. Of those sales, 131 went for full list price and a similar number, 161 houses, went for over original list price for a total of 292. That’s 40% of our sales going for full list price or over list. Let’s take a look at the very hot $1 – 1.5 million price range. That price range makes up 16% of all sales so far this year and that price range makes up 15% of the at or over list price sales.

Percent of Greenwich Home Sales by Price
at List or Over List for 2021 YTD

Percent of all Greenwich Home Sales
by Price YTD 2021

That’s what we see all the way from $600,000 to $6.5 million with one exception. The only price range that has a more than average list and over list sales is from $1.5 – 2.0 million. That price range makes up only 12% of our 733 sales so far, but it makes up 16% of our list and over list sales.

On the less than very hot side you have to go all the way up $6.5 – 10 million before you see a drop off in hot sales. Above $6.5 million the hot sales are only 3.4% of all sales while that segment represents 5.7% of our sales.

If you compare the hot sales within a price category to all sales in that price category the $1.5 – 2.0 million price range stands out even more. Of the 77 total sales in that price category, 46 or 60% went for list or over list. For the entire market, as noted above, 40% of all of sales went for list or over list. Looked at this way the other very hot price range is $4 – 5 million where 51 of sales, 23 of 45 sales went for list or over list.

Map of Sales of Homes at List or Over List YTD (8/25/21) Map of All Home Sales of Homes in Greenwich

The over $6.5 million price ranges stand out on the lower end of over list bidders. There only 24% of the 45 sales are going for list or over list but think about that. You come to Greenwich wanting to buy a house for around $8 million. The odds are 1 in 4 that you are going to have pay full list price or over list for that $8 million house. This is in a market segment that only a few years ago was seeing the over $5 million market going for an average 76% of original list price.

BTW: When looking at other people’s stats be very careful as to whether they are using the sales price to original list price (SP/OLP) or the most recent list price (SP/LP). Markets can be made to look hotter if you use SP/LP. This means that if a listing started at $4 million and was grossly over-priced and then over 2 years , the list price was lowered to $2.5 million dollars and then sold for $2.6 million it would be counted as a hot property, when it was really just a badly price property that took 2 years to sell.

2021 Highest Sale Over List by Percent

We have 18% of our sales going for full original list price, but we have 22% going for over list price, but how much over list price? Reporters like going for the records, the most extreme we have is 32 Wesskum Wood. It was listed on April Fool’s Day (my brother’s Russ’ birthday by the way) at $1.6 million and 8 days later it was under contract for $2,200,000 or an amazing 38% over list. A few years back, I sold a property for 22% over list, a record that stood for several years, but this year we have another listing that sold for 29% over list. We have a total of 4 houses that sold for 20% or more over list, but this is out of 161 sales that went for over list price.

Hot $ ranges>= list% of over listAll sales% of all sales% hot
< $600K10.3%50.8%20%
> $10M10.3%81.2%13%

When you look a little closer, these over list price bidding wars are not quite as intense as you might think. The median amount over list for those 161 sales was 5% over list. If you are looking at buying a house with multiple offers that is listed at $1,000,000, the numbers say you have a pretty good chance of getting the house at $1,050,000. At the other of over list sales 25% went for 3% or less over list.

How Much to You have to Bid Over List to Get Your Dream House

It always amazes me that some buyers just refuse to get in a bidding war, it’s just not for them. The point is that you don’t have to go much over list even in 2021 to win the house in many situations. Five years ago, when bidding wars were much less common, my client’s house was in the sweet spot of the moment, and we had 7 bidders. We went to highest and best, one very distinguished gentleman who had initially bid over list refused to participate in the highest and best competition. He wouldn’t even put in his original bid. He should have; he would have gotten the house for no more money than he was willing to pay before the highest and best competition.

Multiple offer competitions are not to be feared. If you lose you are in the same situation you were before, you don’t have a house. This isn’t poker, where if you come in second best you lose everything in the pot.

Also, the best offer is not always about money. I’ve seen lower bidders get the house because the buyer was willing to wait 3 months while the owner found a place to move. This year, I’ve heard of multiple winning bidders who pulled out of the deal while contracts were being drafted. This is why, I always suggest my seller agree to notify not only the winning bidder, but a second and third back-up. There is a much better chance that those folks will have a good taste in their mouth when you go back to them asking if they will honor their original offer now that the winning bidder has withdrawn.

So bid away, you’ve nothing to lose, and you’ll have great stories for the future, win or lose.

July 2021 – Another Record-Breaking Month for Greenwich House Sales

Sales Likely to Fall in August as Low Inventory Limits Sales

The numbers for July are pretty amazing. We just had our biggest sales month ever with 142 sales and $448M in sales volume in one month. That’s more sales than we had in the entire first four months of 2020. This sales number broke also last month’s record of 135 sales and last year’s monthly record of 118 sales in September 2020.

Pre-pandemic you have to go all the way back to June 2011 to find the previous record of 114 sales which was a one-month blip caused by an increased sales conveyance tax increase. The last record for market-driven demand was 109 sales in August 2001.

Prices are up about 18-20% in nearly all price levels. Backcountry and mid-country are seeing the biggest rebounds since these areas are the furthest from town and suffered the most in the post-Great Recession years.

So far in August demand continues to be high, though not as frenzied as in the second quarter of 2021. Contracts are down about 17% from July 2020 when we were seeing a major acceleration in sales as Covid restrictions loosened. Sales peaked two months later in September 2020. 

The drop in contracts is partially due to summer vacation with lots more buyers travelling, often for the first time in over a year. Contracts traditionally fall in July, but what is really driving the drop in sales this year is our shrinking inventory. As of Wednesday, we are down to 290 listings, when were at 555 listings at this time last year.

 While we have had low inventory all year, our total number of listings are up 60% for the year. Listings have just gone to contract as fast as they have come on, which has hidden this jump in total listings numbers. We have even more listings than that as many listings never hit the market. One internal email of a coming listing and a fellow agent contacted the listing agent and said he had a buyer. (That happened twice to me, once on the sell side and once on the buy side.)

When you look at where the changes are year over year, the drop in inventory is a very consistent story. We have lower inventory at every price range from under $600K to over $10 million. Our inventory number are not just down by a little the smallest drop is 30% from $6.5 – 10 million from 53 listings in 2020 to only 37 listings as of the end of July this year. Under $600K we are down 75% from 4 listings to 1 listing and most of the year we have had nothing to sell under $600K.

Among major price categories, the biggest percentage drop is from $1 – 1.5 million, where we are down from 68 to 30 listings or a 56% drop in the number of listings. A couple of weeks ago, I put on a house in this price range. We had 6 offers in the next four days, the majority over list. While most price ranges are tough, our entry level houses are particularly tough. We only have 2 months of supply from $1 – 1.5 million and an amazing 1.6 months of supply from $600 – 800K.

Overall inventory is down 46% and months of supply is down 71%. (The months of supply is how many months it would take to sale our present inventory based on the demand rate so far this year). At 3.2 months, we are at ridiculous levels. This ridiculous level continues all the way up to $6.5 million dollars. While low months of supply are not uncommon under $1 million to see months of supply under 4 months of supply for prices over $3 million is just unheard of.

From $6.5 – 10 million, we only have 7 months of supply. Compared to our other price categories that might seem like a lot, but in June of 2019 we had 42 months of supply. We’ve dropped 83% in months of supply in two years, and this is after a long period where months of supply in this price category were measured in multiple years of supply not months.

On a percentage drop basis, the story is almost as good above $10 million. We went from almost 6 years of supply last July or 70 months, to only 20.1 months of supply this year. This is a drop of 70% and the market is getting better. If you take the sales in July over $10 million and annualize them, you come up with 11.5 months of supply.

This last analysis is a bit of fun with numbers as we only had 2 ultra-high-end sales in July, but we only have 23 listings on the market today down from 37 listings in July 2020. And, most of our high-end sales post-recession now happen after August.

What we are seeing is a drop in the number of high-end and ultra-high-end homeowners that are looking to move out of Greenwich. To my mind, our first selectman, Fred Camillo, and our governor, Ned Lamont (also a Greenwich resident) have done a good job navigating the Covid crisis, while many other states have not handled Covid, and particularly, the Delta variant well.

 Stay tuned, August will tell us a good deal about where the market is going …