Buyer’s Guide to Winning Multiple Offer Bidding

So far this year, we have had 180 single family homes go to contract or closed. Of those 180 transactions about one-sixth have either sold for list price or more or been on the market for less than a month. Now you would think that these properties were our lower priced properties, but the price distribution matches our sales distribution fairly well. Eight of the 29 properties were priced less than $1M, 13 were from $1 – 2M and eight of the properties were priced over $2M. So a well-priced, desirable property can sell quickly at any price.

1st Quarter Over List and Quick Sales

So how does a buyer get an advantage in competitive bidding situations or a tight market? The short answer is to be better prepared than your competition and then use that preparation to move quickly.

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. Meet with them and build a relationship. Very few financings are pro forma today.

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 it and getting 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 this year. If you are selling your own house and you need the funds from that house to close consult a tax attorney or accountant to see just how much the taxman taketh and ways to minimize the take.

Finally, houses come and go, so don’t let planning get in the way of the house that just came on that may not be there by the time you do your preparation.. If you see a house come on that you might like go see it and if you like it make a bid. You don’t want to have paralysis by analysis. So while you are preparing keep your eyes open for the right house for you and don’t wait if you see something that looks good.

What follows below is a set of tactics that can give you the most advantage in negotiating in a multiple offer situation.

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. A pre-approval letter and shorter mortgage contingency goes a long way when bidding against someone without one. Also now’s a good time to fix your credit score rather than when your loan hangs on getting a higher rating.

If there is some way you can do all cash 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 for deals under $2,000,000. Consult with your team before you do this. Refinancing later can be tricky and may affect your taxes.

Third, be available. If 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.

Fourth, be flexible and reasonable. Don’t let a minor deal point or few 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.

February 2017 Greenwich Real Estate Report

Inventory Down, Contracts Up & $2 – 4M Looking Good

By Mark Pruner

Douglas Elliman – Greenwich

mark.pruner@elliman.com – 203-969-7900

  • Contracts up 32% year over year with spike from $2 -4 million
  • Heavy activity as buyers rush to do deals before interest rates rise
  • High-end market gets off to a good start

January 2017 was an okay month for sales in Greenwich, but an excellent month for contracts.  Our contracts as of the end of this February were up 21 over February 2016 jumping from 65 contracts last year to 86 contacts this year. More than half of this increase in contracts was in the price range from $2 – 4 million where contracts up by an even dozen.

February Sales, Inventory, Contracts & Months of Supply

Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 3 4 1 5 2 6 3.0 1.8 3.0
$600-$800K 15 8 2 10 2 10 15.0 5.3 7.5
$800K-$1M 12 6 1 7 5 11 4.8 3.8 12.0
$1-$1.5M 36 14 8 22 20 34 3.6 3.7 4.5
$1.5-$2M 57 11 2 13 10 21 11.4 9.5 28.5
$2-$3M 90 18 8 26 15 33 12.0 9.5 11.3
$3-$4M 67 13 3 16 9 22 14.9 10.7 22.3
$4-$5M 53 4 1 5 3 7 35.3 26.5 53.0
$5-6.5M 55 3 3 6 4 7 27.5 27.5 18.3
$6.5-$10M 53 4 0 4 0 4 46.4
> $10M 34 1 0 1 1 2 68.0 59.5
                 
TOTAL 475 86 29 115 71 157 13.4 10.6 16.4

Our inventory was down significantly from last year with only 475 listings down from 493 listings last February. Of this drop of 18 listings, 16 were between $800K and $2M. Our sales and contracts are about the same in this price range, so the drop in inventory was the main factor in significantly lower months of supply from $800K – $2M. From $1 – 1.5M we have a remarkably low 3.6 month of supply.

feb2017-mos-030217

 

February 2017 vs. February 2016

2/17 vs. 2/16 Inventory Contracts Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Mo. Annlzd
< $600K 1 2 -2 0 -2 0 2.0 0.6 2.3
$600-$800K 2 3 -1 2 -6 -3 11.75 1.8 3.2
$800K-$1M -5 1 -2 -1 -2 -1 -0.1 -1.1 6.3
$1-$1.5M -4 0 -1 -1 9 9 -3.7 -1.9 0.1
$1.5-$2M -7 1 -4 -3 0 1 -1.4 -1.7 17.8
$2-$3M 3 6 4 10 7 13 -9.8 -5.7 -10.5
$3-$4M -5 6 -2 4 2 8 -5.7 -7.3 7.9
$4-$5M 2 2 -1 1 1 3 -15.7 -18.1 27.5
$5-6.5M 3 -2 2 0 1 -1 -7.2 4.8 -33.7
$6.5-$10M 4 2 0 2 -2 0 3.5
> $10M -12 0 -1 -1 0 0 -24.0 -21.0
TOTAL -18 21 -8 13 8 29 -2.3 -2.9 3.1

When you look at contracts in all price ranges, the other area that jumps out at you is the $2-4 million price range where we are up 12 contracts from last year and our closed sales are up 9 houses from last year. In this $2 – 4 million price range we have 21 contracts in the queue. As these sales close over the next two months we will continue to see good sales in this price range.

feb2017-sales-inv-cur-ks-030217

Now overall, February sales were down 8 houses from last year, but this is not overly worrisome as February 2016 was a record month for February sales. Our 10-year average for February is 30.9 single family home sales so 29 is not far off the average. The drop in sales from 2016 is fairly evenly distributed across the price ranges. We also had a good January so we are still up for the year in sales.

sales-sfh-2015-dect2017-030517

We may even be seeing a bit of a supply constraint in sales, since the small drop of sales in most price ranges roughly corresponds with the drop in inventory in those same price ranges. Two other positive indicators, albeit purely anecdotal, are a good numbers of showings and significantly higher open house attendance.

If you look at just the inventory compared to the first two months of sales it looks like we have plenty of inventory, but that’s not the case from many buyers’ viewpoint. By the time they pick a price range, a neighborhood, a housing condition and a style of house there may be only a handful of houses that fit their desires. As a result, houses that have been on the market for a good period are selling.

February 2017 Pie Charts - Inventory, Sales YTD, February Sales and ContractsActivity over $4 million is doing well with 20 sales or contracts so far this year. We had one sale for $19,250,000 and a contract of a house listed at $17,500,00.

Old inventory is also being absorbed. A third of our 158 sales and contracts in 2017 were for houses that have been on the market for more than 8 months. We even had 22 sales that were on for more than a year. The record holder so far for 2017 was a house that had been on and off the market since 2010 and sold in January after 1,233 cumulative days on the market.

For buyers being prepared with information and financing is key. We have inventory coming on every day in the Greenwich spring real estate market, albeit a little slower than last year, but it is going to contract faster than last year, so email alerts of new listings are crucial.

I used to set up alerts to go to clients 2 – 3 times per week, now I set them up so they get new listings within 5 minutes of them going on the Greenwich MLS. The sooner the buyer has an accepted offer in hand the fewer competitors they have, since most buyers won’t go see a listing with an accepted offer. In Greenwich, however an accepted offer doesn’t mean the buyers can relax. The rule here is that the deal is not binding until the contract is signed. Buyers need to have their inspectors, bankers and attorneys lined up before the offer is accepted not after. In a busy market, like this, they need to cut every day possible off of the time period from accepted offer to signed contract.

If the market follows the Dow as it has been doing this could be a very interesting year for buyers and sellers.

 

99 Open Houses in Greenwich, CT on March 4-5, 2017

Greenwich Weekend Open Houses March 4-5, 2017

Greenwich Open Houses for March 5, 2017

99 Open Houses this weekend! WOW! There are 9 on Saturday and 90 on Sunday. Prices range from 3 rentals at $5,495 to the highest priced home at $6,950,000.

Click here for  the interactive map to plan your route.

The number of homes in each price range is as follows:

Rentals: 3 Homes

Under $1,000,000: 9 Homes

From $1,000,000 to $2,000,000: 31 Homes

From $2,000,000 to $3,000,000: 28 Homes

Above $3,000,000: 28 Homes

 

Address Town Price Saturday
12 Georgetowne North  #12 Greenwich $1,250,000 Sat 12-2 PM
365 Round Hill Road Greenwich $1,495,000 Sat 12-2:30 PM
12 Shore Acre Drive Old Greenwich $1,875,000 Sat 2-4 PM
22 Indian Head Road Riverside $2,345,000 Sat 2-4 PM
69 Circle Drive Greenwich $2,545,000 Sat 12-2 PM
151 Milbank Avenue  #1 Greenwich $2,975,000 Sat 1-3 PM
5 Brown House Road Old Greenwich $2,995,000 Sat 3-5 PM
303 Milbank Avenue Greenwich $5,949,000 Sat 2-4 PM
Address Town Price Sunday
62 Orchard Place  #A Greenwich $5,495 Sun 2-4 PM
195 Bible Street Cos Cob $7,500 Sun 1-3 PM
303 Milbank Avenue Greenwich $18,000 Sun 2-4 PM
33 Talbot Lane  #18 Greenwich $519,000 Sun 1-3 PM
245 Byram Road Greenwich $549,500 Sun 1-4 PM
193 Hamilton Avenue  #18 Greenwich $699,000 Sun 2-4 PM
302 River West Greenwich $715,000 Sun 1-4 PM
64 Cambridge Drive Greenwich $799,000 Sun 2-4 PM
77 Havemeyer Lane  #412 Stamford $835,000 Sun 1-3 PM
65 Florence Road Riverside $850,000 Sun 1-3 PM
48 Spring Street  #7 Greenwich $975,000 Sun 1-3 PM
48 Spring Street  #5 Greenwich $985,000 Sun 1-4 PM
7 Riverview Court Greenwich $1,195,000 Sun 1-3 PM
1044 North Street Greenwich $1,199,000 Sun 12-2 PM
21 Center Drive Old Greenwich $1,200,000 Sun 1-3 PM
2 Nassau Place  #3 Cos Cob $1,249,000 Sun 2-4 PM
61 Orchard Place  #A Greenwich $1,280,000 Sun 2-4 PM
28 Powell Street Greenwich $1,299,000 Sun 1-3 PM
20 Georgetown North  #20 Greenwich $1,325,000 Sun 1-3 PM
85 Bowman Drive Greenwich $1,325,000 Sun 1-4 PM
150 Pemberwick Road Greenwich $1,349,000 Sun 1-3 PM
172 Field Point Road 5 Greenwich $1,349,000 Sun 1-3 PM
4 Charter Oak Lane Greenwich $1,375,000 Sun 2-4 PM
61 Lockwood Road Riverside $1,400,000 Sun 1-3 PM
219 Glenville Road Greenwich $1,449,000 Sun 1-3 PM
73 Taconic Road Greenwich $1,545,000 Sun 1-3 PM
3 Nutmeg Drive Greenwich $1,549,500 Sun 1-3 PM
50 Old Orchard Road Riverside $1,550,000 Sun 1-3 PM
28 Caroline Place Greenwich $1,639,000 Sun 12-2 PM
12 Laddins Rock Road Old Greenwich $1,649,000 Sun 2-4 PM
17 Tory Road Riverside $1,749,000 Sun 1-3 PM
311 Cognewaugh Road Cos Cob $1,785,000 Sun 1-3 PM
260 Stanwich Road Greenwich $1,800,000 Sun 1-4 PM
260 Stanwich Road Greenwich $1,800,000 Sun 1-4 PM
65 Summit Road Riverside $1,850,000 Sun 1-3 PM
58a Orchard Cos Cob $1,875,000 Sun 11:30-2:30 PM
12 Shore Acre Drive Old Greenwich $1,875,000 Sun 2-4 PM
7 Tinker Lane Greenwich $1,925,000 Sun 1-3 PM
29 Old Stone Bridge Road Cos Cob $1,950,000 Sun 1-3 PM
17 Candlelight Place Greenwich $1,995,000 Sun 2-4 PM
36 Burning Tree Road Greenwich $2,050,000 Sun 1-3 PM
116 Pecksland Road Greenwich $2,100,000 Sun 1-4 PM
70 Summit Road Riverside $2,125,000 Sun 2-4 PM
37 Crescent Road Riverside $2,195,000 Sun 1-4 PM
12 Old Wagon Road Old Greenwich $2,249,000 Sun 2-4 PM
22 Indian Head Road Riverside $2,345,000 Sun 1-4 PM
23 Clapboard Ridge Road Greenwich $2,395,000 Sun 1-3 PM
5 Shorelands Court Old Greenwich $2,395,000 Sun 2-4 PM
25 Copper Beech Road Greenwich $2,425,000 Sun 1-3 PM
268 Palmer Hill Road Riverside $2,495,000 Sun 1-3 PM
143 Woodside Drive Greenwich $2,495,000 Sun 11-1 PM
10 Pine Ridge Road Greenwich $2,500,000 Sun 1-3 PM
777 Lake Avenue Greenwich $2,500,000 Sun 1-3 PM
69 Circle Drive Greenwich $2,545,000 Sun 12-2 PM
80 Glenville Road Greenwich $2,550,000 Sun 1-4 PM
15 Hycliff Road Greenwich $2,650,000 Sun 1-4 PM
17 Lincoln Avenue Greenwich $2,650,000 Sun 1-4 PM
75 Dearfield Drive Greenwich $2,695,000 Sun 1-3 PM
350 Riversville Road Greenwich $2,950,000 Sun 2-4 PM
20 Dewart Road Greenwich $2,950,000 Sun 2-4 PM
152 Milbank Avenue  #1 Greenwich $2,975,000 Sun 1-3 PM
1016 Lake Avenue Greenwich $2,995,000 Sun 1:30-4 PM
8 Dearfield Drive Greenwich $2,995,000 Sun 1:30-4 PM
150 Riverside Avenue Riverside $2,997,000 Sun 1-3 PM
50 Hillcrest Park Road Old Greenwich $3,100,000 Sun 1-4 PM
9 Game Cock Road Greenwich $3,199,000 Sun 1-3 PM
444 Old Church Road Greenwich $3,199,000 Sun 1-4 PM
22 Widgeon Way Greenwich $3,250,000 Sun 2-4 PM
26 Stag Lane Greenwich $3,295,000 Sun 1-3 PM
323 Cognewaugh Road Cos Cob $3,295,000 Sun 2-4 PM
14 Sherwood Farm Lane Greenwich $3,495,000 Sun 1-4 PM
15 Cottontail Road Cos Cob $3,495,000 Sun 2-4 PM
340 Old Church Road Greenwich $3,675,000 Sun 1-3 PM
106 Lockwood Road Riverside $3,985,000 Sun 1-4 PM
7 Hawkwood Lane Greenwich $4,100,000 Sun 1-3 PM
52 Ridgeview Avenue Greenwich $4,195,000 Sun 1-3 PM
390 Lake Avenue Greenwich $4,199,000 Sun 1-4 PM
6 Greenwich Cove Drive Old Greenwich $4,199,000 Sun 2-4 PM
61 Winding Lane Greenwich $4,200,000 Sun 1-3 PM
4 Jones Park Drive Riverside $4,295,000 Sun 1-3 PM
2 Lakewood Circle South Greenwich $4,295,000 Sun 2-4 PM
79 Pecksland Road Greenwich $4,497,000 Sun 1-3 PM
22 Welwyn Road Riverside $4,595,000 Sun 1-3 PM
15 Northway Old Greenwich $5,295,000 Sun 2-4 PM
6 Andrews Farm Road Greenwich $5,350,000 Sun 2-4 PM
35 West Way Old Greenwich $5,495,000 Sun 1-3 PM
38 Dairy Road Greenwich $5,495,000 Sun 11:30-1:45 PM
29 Calhoun Drive Greenwich $5,975,000 Sun 1-3 PM
11 Angus Lane Greenwich $6,250,000 Sun 1-3 PM
85 Indian Head Road Riverside $6,750,000 Sun 1-3 PM
27 Doverton Drive Greenwich $6,950,000 Sun 1-3 PM

 

What’s Happening to the Practice of Real Estate

Few things have changed real estate more than technology. A generation ago real estate agents got a weekly book with all the listings from the Greenwich MLS. With Realtors being the only ones that had this information they had a powerful advantage over buyers and sellers. A buyer couldn’t easily find out what properties were selling for in each area of Greenwich. Sellers generally knew, because then as now, sales prices got printed in the paper, but it was a lot of effort to research these prices without one of these books.

Now buyers and sellers have most of the information that agents have on sites like Realtor.com and Zillow. Some folks predict that such sites will put Realtors out of business as sellers just post their properties online and buyers will run some searches and find the right house on their computer and wire transfer the funds. The chances of that happening are nil.

While the information is easy to find, the government and people’s demands have made the job of real estate agent much more complicated. We have a whole series of environmental demands that we didn’t have before. Issues of oil tanks, asbestos, lead paint and radon all must be checked and remediated if necessary.

Local government issues have also gotten much more complex. We have planning & zoning regulations that have evolved greatly in the last 30 years. In additions to setback and height restrictions, we have an ever evolving floor area regulation that has become a competition between developers and regulators to control how big houses can be. We now also have green area requirements and the building department has a very complicated set of water drainage rules. We also have inland wetland regulations and real estate tax issues. All of these issue are controlled by state and local rules.

The idea that someone would make a million dollar purchasing decision by looking at some photos is just not very likely and fool hardy. Now some would argue that computers are becoming so powerful that systems like IBM’s Watson, that can diagnose diseases, would end up replacing Realtors. That also is not likely because real estate is so local. The negotiation process in Greenwich and Stamford are distinctly different while the closing process in New York and Connecticut are very different. As a result you don’t have a the economies of scale that you have with a say Trulia where the programming for the website can be used for any house in the US and the site can be used by anyone anywhere in the world.

The other place where technology has clearly changed the practice of real estate is in buyers and sellers expectations on communications. Email and in particular text messages have called on agents to be much more communicative than before. Often, the younger the client the more immediate communication is demanded. Sellers want to know what buyers thought of their house very quickly. Buyers want to see new listing minutes after the come on the market and set up showings the same day.

The amount of information communicated has also gone up. Every real estate office has a high-speed scanner to convert paper to digital files that can be emailed. Photos are no longer enough, now plot plans, aerials, septic permits and building permits are all moved electronically. The job is getting faster and more complicated to provide state of the art services to the client.

Greenwich Home Sales, Interest Rates, TRID and the CFPB

TRID RegulationsHigher End Sales and Contracts Looking Up

So far this year, the 2017 Greenwich real estate market has been very interesting, particularly at the high end. We have an even dozen properties that have either closed or are under contract for over $5 million. Much of this hasn’t been reported, because only two of those properties have actually closed. Of the 10 other properties waiting to close; one of the houses under contract is listed for $17.5 million, and two listings are between $8 and $10 million. This is after a year where we only had 28 properties sell between $5 and $10 million for all of 2016.

Year-to-date, we have 48 sales of single-family homes, plus another 78 contracts waiting to close. Sales from $1 to $2 million have been the strong point in this market. On the inventory side, properties have been going off the market just about as fast as they have been coming on so our inventory continues to be low with only 448 house listings.

Will Higher Interest Rates Hurt Sales – Not in the Short Term

Despite the snow this week, it’s been a mild winter and buyers have been more active than in the harsh winter years. In addition to the mild winter, increased buyer activity is attributable to expectations by buyers of rising interest rates. Interest rates perked up earlier, but only a little and they seem to have settled around 4% or a little under. (Interestingly enough, the non-conforming, so-called jumbo loans/larger loans, have lower interest rates than the conforming and often government-insured loans.)

Now micro-economics say rising interest rates will result in lower real estate sales, however, the National Association of Realtors, did a study of interest rate increases and house sales. What they found was that usually when interest rates increase it’s because the economy itself is expanding and people have higher incomes and feel wealthier. The result is that the expanding economy tends to increase sales and interest rates are more an indicator of this. So, higher interest rates, provided they are accompanied by an expanding economy, don’t necessarily correlate to lower home sales.

What we have seen in each of the last few years are pundits at year-end predicting higher interest rates in the coming year. This has resulted in a jump in January contracts followed by a drop in February as interest rates don’t continue their rise and people dial back their expectations of increasing interest rates. With the Trump administration, this may well change. We have had a long period of expansion and are due for a correction, however, the expansion has been a fairly lackluster one, but slow growth and certainty are better than no or negative growth.

TRID is Hindering House Sales

While higher interest rates may or may not mean lower house sales depending on the economy, one thing that clearly has hindered the housing market are the Dodd Frank and TRID mortgage regulations and the thousands of pages of regulation that have been created. Along with all of the regulations came thousands of compliance officers that had to be hired to interpret and enforce these new regulations from the Consumer Financial Protection Bureau. To see just how bad it is, just take the name of the massive new TRID regulations. TRID is an acronym that contains two other acronyms; TILA-RESPA Integrated Disclosure rule. Now TILA stands for Truth in Lending Act and RESPA stands for Real Estate Settlement Procedures Act so just the title should be the Truth in Lending Act – Real Estate Settlement Procedures Act Integrated Disclosure Rule and the regs themselves are worse.

These regulations lead to silly real world results that actually hurt buyers. Buyers with “preapproved” mortgages can be denied by the bank at the last minute. Compliance issues can prevent funding, for a buyer that doesn’t fit neatly within the requirements of a particular type of mortgage and its regulations. Most Greenwich buyers’ finances don’t fit neatly within the regs. They have unusual and often complex financial situations. As a result, some really outstanding loan officers have to jump through hoops to get the buyer a mortgage. Too often it turns out there is a brick wall on the other side of the last hoop.

Another example of how this increased complexity has made closings take longer and be more difficult, is that the standard Greenwich purchase agreement now provides for a ten-day extension for failing to close on time rather than a three-day period for delayed closing that had been in place for decades. This is directly related to the complexity of the new regulations and the uncertainty that the regulations have generated.

Mortgage Regulations Need to Be Redone

The result is more problems for buyers in getting loans, more expenses for banks that are passed through to consumers, fewer community banks that can afford the compliance costs and fewer people qualifying loans. Now I’m not against regulations, but the system that we have now is not working and it is holding back the economy and the housing market. It is badly in need in rationalizing.

 

January Sales in Greenwich Up – Very Competitive Price Ranges

January 2017 was an excellent month for sales in Greenwich. The really promising thing about it is that sales from $1 million all the way up to $5 million were up significantly over January 2016.

Last month we had 42 single-family home sales in Greenwich and 33 of those 42 homes were between 1 million and $4 million. The segment from $1-1.5 million was particularly outstanding with 12 sales, up from only two sales in January 2016. The even better news for that price range is that we have 16 contracts that have been signed waiting to close.

02/01/2017 Inventory Contracts Last Mo. Solds Month Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 7 0 1 1 1 1 7.0 17.5 7.0
$600-$800K 20 3 0 3 0 3 16.7
$800K-$1M 12 4 4 8 4 8 3.0 3.8 3.0
$1-$1.5M 31 16 12 28 12 28 2.6 2.8 2.6
$1.5-$2M 49 6 8 14 8 14 6.1 8.8 6.1
$2-$3M 75 18 7 25 7 25 10.7 7.5 10.7
$3-$4M 67 8 6 14 6 14 11.2 12.0 11.2
$4-$5M 44 6 2 8 2 8 22.0 13.8 22.0
$5-6.5M 54 3 1 4 1 4 54.0 33.8 54.0
$6.5-$10M 53 5 0 5 0 5 26.5
> $10M 35 0 1 1 1 1 35.0 87.5 35.0
TOTAL 447 69 42 111 42 111 10.6 10.1 10.6

When you look at contracts in all price ranges, the other area that jumps out at you is the $2-3 million price range where we have 18 contracts that have been signed. This is 11 more contracts than we had in January of last year. Sales in the $2-3 million price range will continue to be busy in February 2017, which has traditionally been our month with the lowest sales for the year.

Greenwich Real Estate Months of Supply by Sales and Contracts - January 2017

Greenwich Real Estate Months of Supply by Sales and Contracts – January 2017

Our January sales showed strong sales from $2 million all the way up to $5 million. We had had 15 sales in this price range this January compared to only 6 last January. We may actually be seeing a little evidence of a Trump Bump here as this is the second consecutive month with better high end sales and contracts.

January 2017 Greenwich Real Estate Inventory, Sales YTD, January Sales and Contracts

January 2017 Greenwich Real Estate Inventory, Sales YTD, January Sales and Contracts

 

Our total inventory is down to 447 houses which is 13 lower than last year at this time, while total sales are up 16. In fact, every aggregate category; whether inventory, contracts, sales, or months of supply are moving in a pro-seller direction.

Curiously, the one exception is the market under $800,000. In that price range our inventory is up 8 houses from last year while total sales and contracts are down 11 from last year. While these numbers aren’t large, they have a big impact in a market with only 27 houses in inventory. This price segment always has low inventory so this is probably only a temporary anomaly.

January 2017 Greenwich Sales and Contracts

January 2017 Greenwich Sales and Contracts

The other big change can be seen when you look at where in town the sales are happening. We are seeing relatively good sales and contracts in the back country and also in the eastern half of mid-country. When you look at the map of sales the dots are more dispersed in the 4-acre and 2-acre zone, but then so are the houses. To get a fair comparison you should double the number of dots in mid-country and quadruple the number of dots in backcountry compared to the one acre zone. Mentally doing that shows how good a month January has been for what had been our two slowest areas.

As you might expect with lower sales under $1 million dollar Byram and Pemberwick, for once don’t show a lot of sales, however Glenville with higher price points is doing fine. Central Greenwich, Cos Cob, Riverside and Old Greenwich also continue to do well.

At the other end of the market, the ultra-high end is looking good. The house with an additional lot at 60/62 Oneida in the Indian Harbor Association sold for $19.25 million. At the opposite end of town, a Conyer’s Farm property that was on for $17.5 million just went to contract.

From $5 – 10M we have 8 houses under contract, which bodes well for first quarter sales in what has been our most challenging price range.

jan2017-4pie-020117

Overall, the Dow Jones Industrials topping 20,000 has really put in a spark in the market. The shenanigans in Washington have been ignored so far while the prospect of heightened interest rates has encouraged sales in our mid-market. If these trends continue 2017 could be a very good year.

 

How Not to Sell a House in Greenwich

Presently, we have 9 houses that have been listed on the GMLS for more 1,000 days and almost a fifth of our 438 listing have been on the market for more than a year; so what keeps houses from selling.

INITIAL PRICING: The biggest reason by far is over-pricing the house when first listed. The first two weeks of a listing is critical and if online buyers think the house is overpriced they won’t even go see the house. Even if their agent recommends seeing the house if what they see online doesn’t match up with their idea of its value they will turn down the showing.

So why do owners over-price their houses? First, it’s just human nature; no one wants to leave money on the table if a buyer would have paid more, so why not take a flyer at a higher initial price. This hope and a dream approach can set off a cascading list of issues that can easily leave the house on the market for a year or more and result in price well below what you might have gotten.

Second, owner’s value the unique features in their houses that were added as labors of love and money. The problem is that most buyers will only pay a little more, if any for these features. Paradoxically, the lowest list price often leads to the highest and fastest sales price, by generating the most traffic to the house.

Things like quality of construction, beautiful gardens, and homeowner care and maintenance often don’t play into a buyer’s decision as whether to see a house or not. With the rise of the Internet, items that can be rendered as numbers have reduced the unquantifiable elements. Buyers look at square footage, price per square foot, acres, days on market and other features that they can sort on their spreadsheets as signs of value.

PRICE REDUCTIONS: Every time, an owner changes the price it shows up on the Internet and each price change or lack of them have an unwritten tag line in buyers’ mind:

  • Price unchanged for 100 days – The seller won’t negotiate a “fair price” and may not want to sell at all, probably a waste of time to go see
  • A small price reduction – Seller will negotiate, but their bottom line is close to their present list price so that needs to be close to the buyer’s perceived value
  • A series of small price reductions – Must be something wrong with the house if no one has bought it after all those price reductions and the buyer is probably desperate and will take a lowball bid.

If the buyer traffic is not there initially, or if you had good traffic, but no offers have been made it’s time to take a major price reduction. You also don’t want to do this more than twice so the bigger the better. Once again paradoxically the bigger the price cut the better your sales price will be. What you don’t want to get caught in is the death spiral of a dozen cuts, if you do you may end up having to reduce the price below “fair market value” to get people to come see your house.

POOR PRESENTATION: I was talking to another experienced agent about how much clutter and poor presentation could cost a seller and we both came to the same figure. We posited two identical older homes, but one was neat and tidy and the other cluttered and dirty. If the neat house went for $750,000 we both estimated, it would be minus $50,000 if the other house was a mess. If you add dishes in the sink and mildew in the shower, you could take off another $25,000. Appearance counts.

So, the things you can do that will improve the value of your house starting at street side:

Curb appeal – A lot of people decide whether they like a property as soon as they see it, so trim the trees and bushes, remove fallen branches, fix the driveway, paint the mailbox and add big house numbers so the house is easy to find. Make sure the path from the driveway to the front door is a nice as you can make it; buy a new doormat with a welcoming message, paint the front door and replace any corroded door knobs and knockers.

First steps – Assuming they still like the house from the exterior the next most important is the first two steps inside. Make the inside air temperature the opposite of the outside; warm in the winter and cool in the summer. Make sure there are no unpleasant smells such as cat pee or cigars (we smell one of these every week.) The entry should have the warm inviting feel of a home not a hotel lobby.

Inside – Get rid of “bad memory points,” the things that people remember a week later about the house. I’ve seen dead squirrels in the attic, dead bugs under the sink, and used diapers left out. Even things that aren’t offensive should be fixed, like door that stick, dust on shelves and a used drinking glass in the sink should be removed.

NEGOTIATION: If you want to really insult a Greenwich seller make a lowball offer, however, if you are the seller put that irritation aside and consider the situation. Last year our median sales price to list price was 92% so if the parties were to meet in the middle the buyer would start with an offer of 84% of list price or an $840,000 offer on a $1,000,000 listing. A lot of sellers wouldn’t even counter this “insulting” offer and a lot buyers would be too embarrassed or prideful to raise their own opening offer so the negotiation is over, before it began.

My philosophy is to counter every offer. The buyer maybe an ignorant, irritating, cheapskate without any money, but you’ll never know unless you counter-offer (along with a strong, and often unneeded, admonition from seller’s agent to buyer’s agent to get serious in buyer’s counteroffer.)

The other major negotiation killer is the line in the sand. Very often the buyer and seller will be less than 1% apart, but they both draw a line in the sand and won’t make a better counter. (Seller: If it’s that small a difference the buyer shouldn’t have problem coming up 1%.”) If that happens try to add more negotiating options; a better closing date, larger down payment, or offer to include the yard furniture, or the Mercedes.

And, whatever you do, try not to tick-off the buyer. It never makes the process easier and greatly increases the chance that both parties will walk. At the same time try not to be ticked-off yourself. Yes some buyers are rude, but it’s a transaction not dating. Too often, what is perceived as rude is really a cultural, regional or national difference in style, so stay cool and a few showings, can lead to a good price and quick close.

by Mark Pruner, Douglas Elliman, 203-969-7900, mark@greenwichstreets.com