or Maybe It’s Not So Bad
In nearly every neighborhood in Greenwich, the real estate market is worse this year than last year. Overall, our total sales volume is down $750 million dollars or 33%. The hardest hit neighborhoods are Byram and the South of the Post Road neighborhood that includes Belle Haven, Indian Harbor and Mead Point. Our most affordable neighborhood and some of our priciest neighborhoods are the ones seeing the biggest drop in sales volume. Not only are our total sales volume down, but so are the number of houses sold through the end of August.
Last year at this time, we had sold 752 houses year to date. This year we are looking at a drop of 36% down to 479 houses. Once again Byram got crushed with a drop of 61% drop in the number of sales, but coming in second and third were two of our most popular neighborhoods; Old Greenwich is down 49% in sales and Riverside is down 45% in sales. The total dollar volumes in both neighborhoods took about a 45% drop. These are recession type numbers. In the Great Recession we saw a year over year drop of 47% in unit sales from 726 sales in 2007 to 460 sales in 2008. Our fall in number of houses sold and total volume sold is deep and widespread.
But wait, just last week you didn’t I write that it wasn’t all gloom and doom in Greenwich and that we were doing much better than the rest of the country. And, that’s true too. So, what is it? To see how our market can be both hot and cold at the same time, all you need to do is look at a color-coded map of the changes in our market from last year. The pink, “pro-buyer’s numbers” are in the number sold and the sum of sold dollars columns where sales numbers and total dollars went down. The second part shouldn’t be surprising, when the number of sales fall by 36% you’d expect the total sales volume to drop by a similar amount, which it did dropping 33%, even with some home price increasing. In many cities across the country that had the biggest run-ups, we are seeing the largest drops, that however is not what is happening in Greenwich.
All of the above apparently contradictory statements can be explained by one word, “inventory” or more accurately, lack of inventory. Last year at this time, we had 267 listings as our inventory took a steep drop from the prior June 2021 peak of 342 listings. If you go back to our last pre-Covid year, we had 585 listings at the end of August 2019.
Sometimes these numbers seem like an abstraction, but imagine you grew up in Riverside and want to bring your kids back home to be close to their grandparents. In 2019, you had a choice of 61 houses; in 2022 you only have a choice of 13 houses. Under $1 million you have a choice of one house. From $1 – 2 million you have a choice of two houses. On the flip side, if you are looking to buy your dream house, you have a choice of only two houses over $3.7 million: one at $4.8 million and another at $25 million. Be happy if you are looking from $2 – 3.7 million, at least you have 9 choices.
It’s a tight market for buyers, but it does vary from neighborhood to neighborhood. For example, our two highest months of supply are 7.6 months of supply North of the Parkway and 5.5 months of supply South of the Post Road. That also happens to be where we have the highest percentage of house over $5 million and over $10 million, which are our two weakest segments. That doesn’t mean if you are looking to buy a house for $2 or 3 million in those areas that you are going find a pro-buyer’s market. Houses under $5 million are tight everywhere.
Both backcountry and South of the Post Road are the only two areas that have a price drop from last year. But, they really haven’t. Once again that is due to the drop in high-end sales, and particularly, the very high-end town wide. So, the average price is down in backcountry is down 11%, but the sold price per square foot is up 6% over last year.
Prices are continuing to go up, because inventory continues to drift down. As I write this, we only have 194 listings down from 202 at the end of August only a week ago. As yet, we have not seen anything that you might characterize as the beginning of the fall market. In our office meeting, several properties were announced as soon to be listed, but it’s still not a lot.
In some ways for some groups, the sky is falling, or maybe better said, the skies have gotten gloomy. For example, if you are the town or state collecting conveyance taxes or if you are a real estate brokerage firm having to pay the same overhead you are seeing fewer dollars. Furniture companies and landscapers are likely to see down turns in new business as the number of sales have dropped. For buyers and sellers though they are still in a pretty tight pas de deux.
Stay tuned the fall market inventory has to arrive soon …