Record Sales – Record Low Inventory
We broke 1,000 sales in 2021, a goal that most people thought we would never see, and we did it on the last business day of 2021. Pre-Covid, our 2019 sales were only 528 sales, so we are looking at sales up 90% in just two years and we were up 16.8% this year over 2020; a year when many towns outside of Greenwich saw lower sales this year.
For example, both Darien and Fairfield saw single family home sales decline in 2021, not because of any drop in demand, but due to lack of inventory. In Darien sales dropped 3.4% and in Fairfield sales dropped an amazing 14%.
Greenwich was not immune from such drops. Under $600,000 our sales were down 53% as many of the houses in our lowest price range appreciated over $600K, but that still didn’t raise sales from $600,000 to $800,000. In that price range, our sales were down 17% from 54 sales in 2020 to 45 sales in 2021. We also saw sales drop from $1.5 to $2.0 million, from 154 sales in 2020 down to 139 sales in 2021 and this is in the heart of our market in Greenwich.
Sales were down in some price ranges, but overall sales were up 16.8%, that means that we had to see big jumps in other price ranges and we did. Our biggest gainer by numbers of sales was from $2 – 3 million, where we had 59 mores sales this year leading to 251 total sales. This was an increase of 31%.
Part of what led to this big increase was that many Greenwichites who owned homes in the $2 – 3 million price range upsized their houses to get more offices, amenities, homework areas and just space in general. What that meant was that their homes were available for sale both to people coming from New York City and coming from smaller houses and rentals in Greenwich. These homeowners then listed their homes otherwise we would never have had enough listings to make it to 1,005 sales in 2021.
Our biggest percentage increase was from $6.5 million to $10 million where we saw sales jump 120% from 25 sales in 2020 to 55 sales last year. Some of this sales increase were those Greenwich people who were selling their $3 million house and moving to a $6.5 million, but we also had a lot of New Yorkers concerned about their safety in New York City as well as Covid. Hopefully, the new ayor, Eric Adams, with his police background will bring the crime rate down. Problems in New York City bode ill for Greenwich in the long run, even if they lead to a temporary influx of new residents.
Overall, our high-end has been the strongest part of our market with sales from $5 – 10 million up 216% since 2019 and up 82% just from 2020, which was itself a record setting year. Interestingly, another price range where we saw a slight sales drop was over $10 million where we went from 15 sales in 2020 to 14 sales in 2021. I’d take that “drop” with a grain of salt. I know of a bunch of private high-end sales, such as the $19.3 million sale on Lower Cross Road that were never listed. I’d love to know how our private sales did both years. I’m betting that like the rest of the market, our private sales were up last year.
Very Little New Inventory
All this is happening while our inventory, which was never close to normal levels this year, dropped precipitously in the last part of the year. We started this year at 152 listings, when we should have around 400 listings. Pre-Covid you have to go back 21 years to Dec. 2000 for the prior record low number listings and that prior low was almost double what we have now. In 2000 we hit a low of 291 listings and this week we have 152 listings.
In some areas of town, our inventory is almost comical. In Byram we have 3 houses for sale. In Glenville, 5 houses, in Cos Cob we are up to 6 houses and we have 8 and 9 houses in Riverside and Old Greenwich. These incredibly low numbers mean that we have zero inventory in some price ranges in these neighborhoods.
For example, in Cos Cob we have 6 listings, but nothing between $1.8 million and $3.2 million, i.e., if you are looking for a house anywhere around $2.5 million you won’t find anything to see in Cos Cob. This is after we sold 28 Cos Cob houses in that price range in 2021. This $2.4 million wide price range was mostly emptied last month, December 2021. In that month, we had 8 Cos Cob houses go to contract creating that big empty space where we would normally have a couple of dozen listings.
Our inventory peaked at 342 listings in June and dropped for most of the rest of the year. In a normal year we peak at around 650 listings. As we had less to sell, contracts dropped in the second half of the year, then surprisingly flattened out in the last 3 months of the year as buyers rushed to buy, before interest rates and prices went up. At year-end, our contracts dropped, as our mini-yearend buyers’ frenzy started to see even a dearth of house priced reasonably.
Strong Buyer Demand in Greenwich – While our new listings have slowed, demand has not slowed as winter is here. Buyers are snapping stuff up as quickly as it comes on the market. Of our 152 listings, only 30 have been listed for 60 days or less. In Old Greenwich, our hottest market, buyers have a choice of 9 houses with only 3 houses under $1.5M. Of those 9 houses, only one has been on the market for less than two months.
You can see that we have strong buyer demand from Westchester County, if you look at the map of 2021 sales in Greenwich. Our border looks like a Seurat pointillism painting with a series of sales right along our western and northern borders with New York State. These folks are in a new state, but in some cases their old friends are just across the street or only one exit away.
Price Ranges – Sales, Inventory and Months of Supply
We have low inventory across the board. In some price ranges, our contracts waiting to close exceed the inventory. From $1 – 1.5 million we have 13 contracts waiting to close, but only 10 listings. The ten listings in this price range are nicely distributed. You have one listing in Old Greenwich, Riverside, Cos Cob and mid-country. You have two listings in backcountry, Glenville and central Greenwich. At least the buyers in one of our most popular price ranges have a choice of neighborhoods. Another price range with more contracts than inventory is from $600,000 to $800,000, where we have 7 contracts and only 4 listings.
To see just how tight the market is check out our months of supply. The traditional dividing line between a buyer’s and a seller’s market is 6 months of supply, i.e., all listings would sell out in 6 months at the present rate of sales, if no more inventory came on the market. We have less than 6 months of supply all the way up to $10M and less than 3 months of supply under $5M.
Our total months of supply is an astounding 1.8 months, but is it really that tight? Looked at some ways, our market really isn’t that bad as the stats make it out. In part, this is because these stats are designed for a normal market not the hot market we have.
One of things that the traditional stats don’t show well are listings that go on and off the market in less than a month. In a typical market, this isn’t a big factor, but last year, 351 of our 1,005 sales were on the market for less than a month. Many of these listing probably never appeared as “inventory” as they weren’t an active listing when stats were run at the end of the month or quarter.
Of those 351 shooting star listings, 73 were on for zero days on market meaning they were private sales that were “listed” on the MLS “For Reporting Purposes Only”. And, there were a lot more of these private sales that weren’t reported on the MLS.
Real Estate in 2022
Regardless of how much inventory we get on in the next two months we are going to have a tight market for a while and possibly the entire year. For the time being, the smart money is out there buying their houses before prices go up even more than the 10.6%, they did this year. Also, for the majority of our buyers that need mortgages, they are rushing to buy, before the Fed raises rates.
The greatest imponderable is how many people are left to sell their homes after 1,869 house sales in the last two years. In 2021, we had a stellar first half and a good 3rd quarter. We should have had a much slower fourth quarter and thats the way it looked to be at the end of October, but some of the Frenzy that we saw in second quarter came back in the last two months and sales went up even as we had less and less inventory to buy.
The one thing that we do know is that this year is going be different, than the prior two years. Covid will go away or at least no longer be at pandemic levels. During the year most people will have a much better idea of just when they will have to be in the office. People who are waiting out this uncertainty in rentals are likely to buy and we will get some more upsizers listing their “smaller” houses which will look big to those people in rentals.
Interest rates will go up, meaning some money may move from stocks to bonds, potentially flattening the stock market. But, a lot of Wall Street people are going to get some nice bonuses for last year’s market. Also, a major economist says that stimulus money takes about a year to have its full effect, so alot of the $2.2 trillion of stimulus money is still sloshing and will be looking for a home well in to 2022 (preferably a nice home here in Greenwich.)
If you have a home, January 2022 is a great time to list it. If you are buyer, it’s not as bad as the headlines look, but there is probably no more important time to have a good Realtor, banker, home inspector and attorney and if you need a mortgage pay the fee and get underwritten pre-approved. You are going to be going up against a lot of buyers that are bringing all cash to the table and no mortgage contingency.
Stay tuned, it’s going to be a really interesting first quarter…
By Mark Pruner, 203-969-7900 – firstname.lastname@example.org