Is Old Greenwich the Best Place to Live?

November Market Continues to Be Busy

Our market continues to be hot. As of the middle of November we have 729 sales compared to 490 sales at the end of November last year. Our market should continue strong through the end of the year with 174 contracts waiting to close compared to only 65 last year. So far in the first half of November we’ve had 51 sales compared to 40 sales for the entire month of November 2019. Our inventory is also down with only 415 listings compared to 520 listings at the end of November last year.

When you look at our weekly transaction index we were up nicely the last two weeks. Two factors seem to be influencing this increase; one is the election is over and that uncertainty has been removed and two is unfortunately we are seeing a revival in Covid cases. The result is people are more comfortable buying with less political uncertainty, sending the stock market up, and the impetus to look for literally greener pastures is actually getting stronger.

                Why do people always want to live in Old Greenwich

As usual, Old Greenwich is a neighborhood that has done well this year, just as it did last year; a year when Riverside and Cos did not do well. What is it about Old Greenwich that people find so attractive over the decades. I grew up in Old Greenwich at the corner of Lockwood and Tomac and it has always been a little bit Norman Rockwell, a little international and usually just fun.

Old Greenwich & Riverside Zones

Every August when I was in junior high, I would take over an Old Greenwich paper route from one of the hardworking Haggerty boys and get to see lots of interesting parts of OG. (The Haggerty’s were smart. They went to camp in August while I rode my bike in 90 degree heat, hoping that I’d find Good Humor truck still parked on Shore Road.) From the grandmother who always had cookies for me on Friday, collection day, to the house with the empty liquor bottles in foyer where a well know rock band was spending to the summer, it was, and still is a great place to grow up.

                Where and What is Old Greenwich?

At the south end of Old Greenwich, you have Greenwich’s premier park, Greenwich Point. In the middle you have a village that Planning and Zoning and many town planners everywhere would like to emulate. Next you have, Binney Park, a generous gift to the town and then the Post Road, I-95 and Metro-North to get you a lot of places quickly.  Next you have Havemeyer Park (aka Have-a-baby Park still living up to it’s name and lastly Hillcrest Park where my debutante ball date lived, before she started going out with Michael Bloomberg.

Old Greenwich has 4 different zones going from the R-7 zone of 7,500 s.f. lot up to an RA-1 zone of 1 acre or 43,560. In the main though Old Greenwich is composed of an R-12 zone south of the Metro-North railroad tracks and an R-7 zone from there up to Palmer Hill. These two zones comprise 91% of the sales in Old Greenwich.

At the south end of Old Greenwich, where Lucas Point is there is a small R-20 zone that represents 4.5% of the sales in Old Greenwich. At the north end of Old Greenwich is Hillcrest Park where there is the RA-1 zone which is 4.1% of sales. Interestingly, the average sales price of the half-acre, R-20,  lot is about 50% higher than average price for the one-acre, RA-1 lot. This is because most of the R-20 sales in Lucas Point are direct waterfront properties on Long Island Sound and get a premium.

                                Inventory

For all the attention that Old Greenwich gets it does not have a lot of listings. It is even worse in 2020, we are down this year in inventory with only 36 listings in Old Greenwich.  Given its desirability the lowest priced listing at present is $749,9000, though we did have one sale at $608,000. Also, because Old Greenwich doesn’t’ have a large zone on the water, the highest priced sale so far this year is $6,195,000. Still the difference between the lowest house sale and the highest sales price is a factor of 10, so in some ways Old Greenwich is a microcosm of Greenwich itself.

As of 10/31/2020InventoryContractsLast Mo. SoldsLast Mo Solds+ Contracts YTD Solds YTD+ ContractsMos SupplyMos w/ ContractsLast Mo. Annlzd
< $600K000000 – – –
$600-$800K21012310.07.7 –
$800K-$1M03037100.00.0 –
$1-$1.5M281923310.90.72.0
$1.5-$2M853823283.53.32.7
$2-$3M933624273.83.83.0
$3-$4M634715184.03.81.5
$4-$5M4123676.76.62.0
$5-6.5M2202465.03.8 –
$6.5-$10M310101 –34.5 –
> $10M000000 – – –
          
TOTAL362713401041313.53.22.8
          

                Sales

In 2020, we have had 104 sales through the end of October and have another 27 contracts. The market continues hot with 13 sales in October, at a time where we’d normally be looking at only a handful of sales. Where you really see how hot this market is when you look at the months of supply. Most people consider less than 6 months of supply to be a seller’s market. How about 0.9 months of supply, that’s what we have from $1.0 – 1.5 million with only 2 listings and 23 sales and 8 contracts.

At the high end from $5 – 6.5 million we have 3 listings, no sales and 1 contract so months with contracts is almost 3 years of supply, but one more sale makes a big difference in this thin a market. For the market as a whole, we have 3.5 months of supply and this is what we mostly have from $1.5 million up to $4 million.

                Marketing

I have a listing at 343 Sound Beach Ave, an extensively renovated classic shore colonial, where we just lowered the price by $100,000 to $2,095,000 and we are getting regular showings. Of course, being vacant and ready for immediate occupancy helps as many of the buyers in the market are highly motivated.

This does illustrate another issue. You would think that in this market that listings would be flying off the shelf, and for many properties that is true. Of our 104 sales, 26 went to a non-contingent contract in less than a month and 35 sold for full list price or over list.

At the same time in one of the hottest markets and hottest neighborhoods, we had 22 listings expire unsold. And, it’s not just at the high-end. Half of the listings that expired were under $2.3 million, one even at $615,000. We still have value buyers, as we have had all post-recession. People don’t want to be seen as over-paying. In addition, now we have Covid buyers that just want out of the high-density. NYC and they are not wed to any one town.

                The Future

So what to do in Old Greenwich in the Covid era? For most Realtors the answer is to list your house now. Then again, there are a lot of Realtors who say that anytime, but this time we really mean it. The weekly index of transactions is high, inventory is low particularly in Old Greenwich inventory. If the vaccines roll out faster, our multi-trillion dollar deficits squeeze out private borrowers and drive interest rate higher, then the market could cool quickly, better to take advantage of a hot reality, when facing the reality of cool future.

Having been a lawyer for 19 years, I’ll also argue the other side. The coronavirus has caused a paradigm shift and the glow is off the Park Avenue and Brooklyn roses. For at least the next couple of years, people’s psyche are going to drive them to buy more land. With 8.3 million people and only 62,000 in Greenwich we can expect to see demand stay high till 2023 and beyond. In addition, we have to run out of people that have been waiting for years to move. Once these mainly downsizers move, inventory will stay low and demand high and we will start seeing some real price increases. So some are waiting for the price increases to come.

Which is it? Probably a little of both, so stay tuned …

October 2020 Greenwich Neighborhood Report – Mid-Country the New Sales Sweet Spot

              Mid November Update

First some good news, Greenwich we passed 700 sales for the year to date early this week and finished with 719 sales YTD as of Friday. This is the first time we have done that since 2013 when we had 724 sales for the entire year. Prior to that, you have to go back to 2007 to see sales exceed 700 houses for the year. But the news gets even better, in those two earlier years, we didn’t have 174 contracts waiting to close. With most of the election uncertainty behind us, closings should pick up in November and are likely to exceed October 2020’s 92 sales. Our 10-year average of single-family home sales in November house sales is 39 sales and as of 11/13/20 we already have 41 sales.

              October 2020 Neighborhood Report

As of the end of October, we are up 109% on contracts over last year, while our sales are up “only” 49%, since we had to make up for a slow first half. In that slow first half, we were down 11% in sales compared to our ten-year average. Year over year, we were up 17% compared to our anemic 2019. The second half surge in sales and contract is however, not a townwide phenomenon

Total Sales, Contracts & Inventory by Neighborhood

(10/30/20 GMLS)

SectionInventorySoldsContracts
Banksville232
Byram12132
Cos Cob376320
Glenville18278
North Mianus474
North Parkway857824
Old Greenwich3410424
Pemberwick572
Riverside4910822
South of Post Rd706225
South Parkway14419849
Grand Total460671182

              Mid-Country Greenwich – The New Sweet Spot for Sales

Our new sweet spot in town is mid-country so let’s take a detailed look at this area, that is bigger than backcountry, but doesn’t get nearly the attention that backcountry does. For the GMLS there is no backcountry. It’s kind of like the rules of golf not mentioning the rough that you find on every golf course. The GMLS has a huge section of the town called South of the Parkway. This area goes all the way from the southside of the Merritt Parkway to the north side of the Post Road. It starts in the west at the New York border and continues all the way to the Stamford border in the east except where it bumps up against Cos Cob.

We also call much of this area mid-country, but the southern end of this area isn’t. Students in the South of the Parkway section go to four different elementary schools; Parkway, North Street, Glenville and Julian Curtis. The houses South of the Parkway are located in 5 different P&Z zones. The smallest is the R-7 zone with 7,500 s.f. minimum lot size lots located on lower Lake Avenue near the hospital. The largest zone is the RA-2 zone with 87,120 s.f. lots south of the Merritt Parkway.

The highest sales price South of the Parkway in 2020 is 13,412 s.f. in Deer Park that sold for $10,750,000. The square footage of this house is almost double the lot size in the R-7 zone. The least expensive house South of the Parkway was actually in the R-12 zone and sold for $850,000 near Central Middle School. To draw overall statistical conclusions from such a diverse set of prices and lot size is problematic, but it’s what we have.

When you look at the numbers for South of the Parkway, they are almost twice any other section of the town. Part of that is that as mentioned, it is by far the largest section of Greenwich, but it’s also has had the biggest gains in sales this year. Last year, South of the Parkway had 115 sales out of 449 sales or 25.6% of all sales. This year South of the Parkway, we have had 198 sales out of 671 sales or 29.5%. So, more sales and a bigger share of these increased sales as people are buying up the 1- and 2-acre zones in this section. Match the increase in sales with a drop of 31% in listings and you better bring you A-game and a good Realtor if you want the house.

Change in Inventory Sales and Contracts 10/2020 vs 10/2019

SectionInventorySoldsContracts
Banksville102
Byram310
Cos Cob-172313
Glenville-1190
North Mianus2-64
North Parkway-113213
Old Greenwich-19247
Pemberwick0-30
Riverside-164012
South of Post Rd71817
South Parkway-648327
Grand Total-12722295

              Riverside, Cos Cob & Backcountry

The three other areas where we saw big jumps in the number of sales were Riverside, Cos Cob and Backcountry. For Riverside and Cos Cob, 2019 was not a good year, so when they came back this year, they got a bigger increase year over year. Backcountry actually started its recovery, pre-Covid as by 2019 prices there had gotten much cheaper than in Old Greenwich. In the Covid era, people want land and there are still good deals to be had in backcountry which resulted in 32 more sales this year. The question is for how much longer.

Backcountry sales are up 70% over last year and contracts are up 118%, while inventory is down 11%, which is less than other sections. This small drop in inventory probably indicates that there were a bunch of people in backcountry who had been waiting for better times to list. (I’ve been talking to several about listing now or later.)

Cos Cob has seen major percentage increases as they have recovered from a poor 2019. Last year at this time, there were only 7 contracts on Cos Cob listings, this year we have 20 contracts for a 186% increase. Sales after a slow start for the year, are up 58%, better than townwide average of 49%.

Chart, waterfall chart

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              Old Greenwich

Old Greenwich is not in recovery.  It has been on a multi-year run without the ups and downs we have seen in other areas of town. In my old neighborhood, south of the village that used to be junior executives and their families, inventory is down 38% to only 34 listings. Sales are up 30% and contracts are up 41%, but both these increases are below our townwide average.  It’s nice to start from a high base, but the percentage increases are not as great.

              South of the Post Road

South of the Post Road has done even better with a 213% increase going from 8 contracts last year to 25 contracts this year. On the other side of the ledger, sales in North Mianus are down 50% going from 13 sales last year to only 7 sales this year. A lot of this is Brownian motion as it works out to less than 1 sale a month.

              Summary

What we are not seeing is a significant increase in sales prices in any neighborhood. This is because the above analysis is not for price increases. This year Greenwich is competing not only against Darien and New Canaan, but also Wilton and Bedford, and Ridgefield and Weston. Covid buyers who can’t find what they want in Greenwich are moving up the line. Most of them haven’t been in their office for months and if you are going into your office once a week, what’s an extra 30 minutes in your commute a few times a month.

Coming up a new president, new Covid vaccines, vaccine deniers, another multi-trillion dollar stimulus package and stuff no one has predicted.  Stay tuned….

Greenwich Home Sales Fall to New Highs in Oct. 2020

Are You the Doughnut or the Hole?

Greenwich single family home sales dropped 21% in October compared to September 2020. Some people will see this as the beginning of a return to our typical winter doldrums for sales. But, that’s not very likely to happen, since we have 182 contracts waiting to close. What you want to focus on in October sales is the doughnut and not the hole.

                October Sales are the Doughnut with Extra Sprinkles

Our 92 sales in October is spectacular. Our ten-year average for October is 41 sales, we more than doubled that number this year.  Our 92 October sales is actually higher than our average for our best sales month, June, which only averages 86 sales. So good sales, but a significant drop over last month, but very good contracts.

A significant part of the drop in sales in October compared to September is likely the uncertainty of the election. Whenever there is a rise in uncertainty, we see a slowing in sales. I’ve always found this curious, as closing dates are set weeks and months before the event, but as the event draws nearer, closing dates get pushed beyond the uncertainty created by the event.

                Contracts Continue to be Way Up

With 182 contracts we actually have a good shot at November being over 100 single family home sales, which would be a rebound from October. The one thing that the drop in October likely means is that we won’t make 900 sale this year, but over 800 sales is likely as we have 853 sales and contracts total YTD. This compares to 526 sale for all of 2019.

Now 2019 was our worst year since the crash of 2009. Our 671 sales in 10 months is greater than our 10-year average of 621 sales per year, and we have two months to go. Our market has been like those movies, Chariots of Fire, The Black Stallion, Herbie the Love Bug, et al where the competitor stumbles and then comes roaring back. February to April were all below average months so to have already exceeded our 10-year average shows just how strong the second half sales surge has been.

                Months of Supply are Way Down

When it comes to parsing the numbers this month it’s actually kind of boring. Our inventory is down 127 house or 22% from last year in every price category, but one. The one exception is over $10 million where we are up 6 houses from 29 to 35 listings. At the same time, we are up 100% in sales at the ultra-high end from 6 sales last year to 12 sales this year and half of those sales are over $16 million. This brings up our average for the year to $2.67 million up 12.5% from last year. Our median sales price is also up 12.8% to $2.11 million.

October saw our sales price per square foot increase by 4.7% compared to all of 2019. This is a much better indicator as to whether house prices are rising as it is less influenced by whether sales are in up in any particular price category. At the same time, our sales price to assessment ratio is only up 1.7% for the first 10 months of the year. When you look at just October sales, those sales prices to assessment ratios are up 4.1% over last year. These are real price increases in Greenwich house prices regardless of how you look at it. You just need to pick your number depending on whether you are talking to someone from Darien or the Tax Assessor.

What is really remarkable across the board is our drop in months of supply, which is the amount of time it would take to sell our present inventory based on the rate of sales so far.  With inventory down 22% and sales up 49%, months of supply for the whole market is down from 13.1  MoS to 6.9 MoS. This a big drop and means for most price categories we are clearly in a seller’s market.

Over $10 million, we are down from 48.3 months of supply to 29.2 MoS, a drop of 19.1 MoS. The next biggest price category MoS drop is somewhat surprising. From $3 – 4 million, we are down from 23.3 MoS last year to 7.0 months of supply this year, a drop of 16.3 MoS. (If anyone is looking in that price range, I have a good backcountry opportunity for you.)

When you look at the bar chart of inventory, sales, last months sales and contracts a few things jump out at you. Our $2 – 4 million market is doing particularly well for sales. It’s also where we have the most inventory, so it is not supplied constrained like our under $1 million market. The hot area for contracts is $1 million to $4 million and we saw the same thing for sales last month.

                                Should I Stay or Should I Re-Lo?

In every other post-recession year, when a client would ask me if they should list their house in November, it was a nuanced investigation to look at inventory, sales, style of house, age and condition. I don’t like to put on houses when inventory is high and demand is low, to have them sit accumulating days on market. Often my recommendation was to wait until late February of the following year. In 2020 this analysis is not necessary. The analysis is not what month and year you should put your house on, but how soon you can put it on this year. The buyers are there, and many are looking for fresh inventory. Speed is probably to your advantage unless you want to roll the dice for the potential of a little more appreciation versus the potential for a bigger depreciation.

For buyers you should be ready to move quickly when you find the right house. If you don’t there is a good chance that someone else will.

And…. then there is the whole question of what this election will mean for Greenwich real estate.

How Not to Buy a House in Greenwich, CT

               We have 842 sales and contracts so far, but every week buyers, some experienced, most not, crash and burn in their efforts to buy a house, so lets look at how these folks fail to get the house they want.

Low Balling the Opening Bid – Some people are sure that if they make enough low ball bids that eventually somebody will be desperate enough to actually accept their bid. The problem with low ball bidding is that in Greenwich, the seller, the majority of the time, won’t even respond to the bid. This leaves the buyer with two bad choices; he can bid against himself and raise his bid or walk away from a house that had he opened with a more reasonable bid he had a good chance of buying.

The average list price to sales price ratio and Greenwich is around 93% and has stayed fairly constant. Making a bid that is only 75% of list price is a waste of time. The one exception is high-end and particularly, the ultra-high end. In those rarefied airs the 93% ratio of sales price to original list price gets much lower.

Focusing on Foreclosures – Foreclosures are another popular way not to buy a house in Greenwich. Some people have to have the best bargain (read lowest price possible) and see a foreclosure as being the answer. The problem in Greenwich is that there are very few foreclosures that are actually foreclosed. Connecticut is one of the most homeowner-friendly states when it comes to foreclosing on a property. The process often takes two years or more. In those two plus years you are likely to multiple foreclosure auction notices appear in the newspaper. In Greenwich, like most of the rest of Greenwich, they are usually canceled and most of the properties never actually go to foreclosure.

This year it was even tougher for the foreclosure seeker as the courts were closed for months and foreclosure proceedings were stayed due to Covid.

Even if an auction actually happens, the buyer needs to realize that he or she is bidding against professionals who know all the ins and outs. Now if you are looking to meet an interesting group of people you will find them at a foreclosures. If you are really looking to buy an investment property via foreclosure, you’re going to have a lot more success where foreclosures happen more often, in the larger cities of Connecticut.

Lower-Priced, Brand New Houses – Another unsuccessful strategy is to focus only on brand-new houses. Of our 663 single-family home sales this year only 12 were built this year. Of those 12 new spec houses, only one was under $2 million. It’s very unlikely you’re going to find a new house for under $2M in Greenwich.  If you do want new for less than $2M, then consider buying a teardown and building.

Taking a Vacation – Another surprising way that buyers end up not buying a house in Greenwich is by taking a vacation in the middle of negotiation. This is happening less this year, but people still want to get away.

You would think if someone was going to be spending a lot of money on a house and they’re in serious negotiations that that’s not the ideal time to go camping. Almost every year however I get involved in a situation where we end up waiting for a client to get to somewhere in the wilderness where they can get a cell signal. I’ve emailed documents to cruise ships, remote tropical islands, and countries you have to google to find where they are.

Being out of town isn’t the deal killer that it was even five years ago but if you’re in a competitive bidding situation being unavailable during an entire afternoon visiting your recluse uncle or golfing at a club that doesn’t allow cell phones or expecting uninterrupted sleep  in a time zone 12 hours ahead of Greenwich means there’s a good chance that you’ll lose the deal.

No Money Down – There is a book out there about how to buy real estate with no money down and even to get the bank or the homeowner to pay for the improvements. You don’t see buyer trying this very often in Greenwich and I have never seen it work. The one time you can do this is if you are veteran who qualifies for the VA’s 100% mortgage.

In Your Face Negotiating – We get buyers from all over the world and all types of businesses. Some are used to a rough-and-tumble style, usually fails in Greenwich. Unless the seller is also part of that world the odds are that the seller will just take a pass on negotiating. (I did once see two NYC building contractors screaming at each other on a conference call even to the point of threatening to have each other’s building permits for NYC projects cancelled. They ultimately decided not to do the deal but did go out to dinner together with their wives, all of whom were friends.)

Insulting the Seller – Nine out of 10 times insulting the seller is the kiss of death. I have seen sellers take substantially less just so they can keep that “jerk” from getting the house.  And, it doesn’t have to be a direct insult, showing up late at meetings, not doing what you say you are going to do, inappropriate jokes, or even mispronouncing the owner’s name can hurt or kill a deal.

In Zillow We Trust – Another way that a buyer can kill a deal before it’s even started is by trusting some of the estimates that the big real estate websites such as Zillow generate. Greenwich has very few tract houses and a variety of housing styles, topography, ages, and floorplans. In addition, our square footage may or may not include the basement or attic space so the “size” of the house can vary a great deal even if the houses have the same floorplan. Trying to estimate price in Greenwich via a computer model leads to some really bad price estimates.

The problem is that some buyers believe these estimates and let them control their house hunting and bidding. Some buyers won’t go see a house where the Zestimate says the house is “over-priced” even though it is in their price range. Sometimes they don’t even tell their agent that’s why they rejected a house. Zestimates can also screw up bidding, as buyers refuse to bid over the Zestimate. It’s no way to buy a house.

How to Buy a House in Greenwich – In reality all of these things come down to doing your own research, being prepared, focusing on areas with good prospects, and acting respectfully to the seller. Alternatively, you can have a good agent who will tell you what is likely to work and will definitely not work. Also, there are times to break these rules. Sometimes sellers just won’t budge and stepping back from negotiations can get them to step forward. Just make sure you have cell service where you are going when you decide to break the rules.

Overall Greenwich Real Market Continues Very Busy but Varies by Neighborhood

                October Mid-Month Update

We have sold 52 homes through October 16, 2020. Our 10-year average for the whole month of September is only 49 houses. So, we have already sold more in half a month than we normally sale in the whole month of October. We also have 178 contracts so once again we have a good chance of having over 100 sales for the month and have record sales for any October.

If you add the 173 contracts that we have signed now to our 577 sales, we have had in the first nine months you come up with 747 sales for the year. This would be our highest number of sales in the 21st century. What’s even more amazing is that the 4th quarter generally is only 21% of our sales. It will be much more this year.

When you look at our sales and contracts for the last three months by week, the weekly transactions zig-zag, but even the low points are at a higher level than we saw in the first half of the year.

Total 2020 Greenwich House Sales and Contracts by Week

Our totals are all looking good with our average and median sales prices up 9.0% and 12.5% respectively compared to year-end 2019. When you look just at 116 September sales, our average and median prices are up even more as you would expect in an accelerating market.

On the inventory side, we are down at just about every price level. Our prices are up and so are our sales and contracts.

            September 2020 YTD Neighborhood Report

Looking at just these numbers you would think that everything, townwide is rosy. If, however, you look at the individual neighborhoods in Greenwich, you see a more nuanced stories. Some neighborhoods are down in some categories and some neighborhoods are doing remarkably well compared to last year, but they still have a ways to go.

When you look at the neighborhoods, certain areas and numbers jump out. Backcountry and mid-country are doing very well this year, while Byram, Pemberwick, Banksville and North Mianus are not doing much better and in some statistical categories are actually doing worse. The one factor that ties all this together is acreage. If you have bigger lots in the pandemic year of 2020, you are doing better. If you have less acreage per lot, the demand has not increased much this year.

            Backcountry

One of our hottest areas has been backcountry where sales are up 74% for the year. Our contracts are up an amazing 140% this year. We have sold 68 houses and have 24 under contract. While this is a remarkable turnaround this year in many ways, all this gain has just gotten backcountry back to even. When you look at the inventory of 83 houses compared to the sales of 68 houses you come up with 11.0 months of supply. The second highest for any neighborhood. Add in the 24 contracts and things look a little better with 9.5 months of supply which is down by 14 months of supply from last year.

Backcountry Sales 2020 (as of 10/17/20)
Sold (Blue)                                          73
Pending (Yellow)                              16
Contingent Contract (Green)      9

This increase in backcountry sales actually started in 2019 when backcountry sales for 2019 were up 30% compared 2018 (which tells you just how bad things had gotten in backcountry by 2018). The other big change is where the sales and contracts are in backcountry. In short, they are everywhere, which is a change from prior years. In 2018 and before, the further you went out in backcountry the harder it was to sell. Now, backcountry is backountry. Sales are spread throughout the 4 acre zone and there is even a concentration along the north border as folks from Westchester want to escape the harsh impact of the $10,000 SALT cap on taxes, but still want to be close to their friends in Armonk and Bedford.

                        Mid-Country

The area that has done the best in 2020 is mid-country or South of the Parkway as the Greenwich MLS calls it. There sales are up 60% less than backcountry’s 74% increase, but contracts in mid-country are up an incredible 292% to 35 contracts compared to only 12 contracts in 2019. We also have 8.9 months of supply, the type of number you used to see some years for Riverside. Total sales in mid-country are $553 million or up $221 million from 2019.

 Also, in md-country the average sales price is up $137,045 while the average sales price in backcountry is down this year. Neither of these numbers are particularly indicative of what individual house prices are doing. They indicate more higher-end houses are selling in mid-country and more houses below the backcountry average north of the Merritt. The changes in the mix of what is sell are causing these numbers to jump around.

For a better indication of how individual house values are doing, look at the price/sf and also the ratio of this year’s sales prices to the 2015 assessment values. These number are less effected by what price points are selling. When you do that, you see that both these numbers are actually down a little bit. What we are seeing are lots of motivated sellers meeting the bids of even more motivated buyers. Once this group of sellers who have been waiting to sell is used up, then you will see more bidding wars and prices going up. Of course, this assumes that a couple of trillion dollars of new government debt and continuing high unemployment don’t lead to a recession next year. So far average and median prices are moving up. In September, both the average and median sales prices were up compared to those numbers for the whole year of 2020.

                        Riverside, Cos Cob & Old Greenwich

These three neighborhoods in the southeast part of town have traditionally been our family neighborhoods and as such they have done very well this year. We have lots of families that have been cooped in small apartments in NYC with some vary restless kids who are buying up houses left and right in these neighborhoods. Old Greenwich has 3.4 months of supply which is the very definition of combat buying. If you are buyer, you need to be all cash or have a mortgage application that is underwritten pre-approved, because you are not going to be the only people interested in the houses that are properly priced.

In Riverside, it’s not tooth and claw, but it is still hot with only 4.7 months of supply, so be prepared. Cos Cob is actually at 6.7 months of supply, but this is down from 12.8 months of supply at this time last year; 2019 was not a good year for Cos Cob, but 2020 is.

                        Glenville

Glenville has been much like Cos Cob and has done better than its southerly neighbors, Pemberwick and Byram. Glenville has an inventory of 16 houses and has already sold 22 houses with another 10 under contract. This equates to 6.5 months of supply for sold houses and drops to 5.3 houses when you add in the contracts.

Glenville also has the greatest increase in sales price/sf at 11.1%. We are seeing some real property value increases in this area. You wouldn’t know this however if you looked at the average sales price which is down 19.6%, This is the kind of jumps that you see where you have less than two dozen sales and the loss of a couple of high-end sales while also have a couple of more sales under the average. So, all the Glenvillians should focus on price/sf and ignore the averages.

                        Pemberwick & Byram

The market is not bad in Pemberwick and Byram, it is just didn’t get any hotter this year. The irritating thing about these two areas for us Realtors is that people who move in really like it and tend to stay here so from year to year we don’t have a lot to sell. Right now, we have 2 houses on the market in Pemberwick and 10 houses on the market in Byram.

With 4 sales in Pemberwick we are looking at 4.5 months of supply, which is just the same as we had last year. It’s still hot, it just didn’t get hotter. Part of this may be that buyers who are fleeing New York City are looking at smaller lots and options throughout Westchester and Fairfield Counties. This can not be said of buyers looking for 2 and 4-acre lots, as many towns don’t have large lot zones.

Byram has had 13 sales this year which equates to 6.9 months of supply, essentially the same as last year’s 6.8 months of supply.  Both the average price/sf and the sales price to assessment ratio are up slightly in Byram.

            Summary

Our market took off in June and has risen to levels of demand hardly ever rarely seen in the last 40 years. We are quickly working our way through our shadow inventory (a term I never understood, but Halloween is this month, and I’ve always wanted to use it). Once most of the folks that have been waiting to move up, move out or downsize have done so, we are going to see an even tighter market.

Right now, we really need inventory to meet our demand;  not something you normally say in October. If you do list now, however, trying the premium price route may well not be effective. You’ll get showings but if you do get offers, they may not be what you want. On the flipside, if you price your house to this market, you have a very good chance of having a contract before year-end even with the holidays coming up.

Mid-October Greenwich R.E. report – Still looking good

So far this month we have sold 52 homes in October 2020. Our 10-year average for the whole month of September is 49 houses. So we have already sold more in a half month than we normally sale in the whole month of October. We also have 178 contracts so once again we have a good chance of having over 100 sales for the month.

When you look at our sales and contracts they zig-zag, but at the highest level for the year.

Total 2020Greenwich House Sales and Contracts by Week

One of our hottest areas has been backcountry where sales are up 74% for the year.

Backcountry Sales 2020 YTD (10/17/20)
Sold (Blue)                                          73
Pending (Yellow)                              16
Contingent Contract (Green)      9

This increase in backcountry sales actually started in 2019 when backcountry sales for 2019 was 30% higher than we had in 2018. It’s going to be an interesting 4th quarter.

September Greenwich R.E. Sales Set Another Record

Why Aren’t Prices Up More

Once again sales of single-family home in Greenwich set a record with 116 sales. This is up 150% from last year. We’ve never had a September with triple digit sales. Post-recession, the highest number of sales reported on the Greenwich MLS were 63 sales in 2015. Given that we had 193 contracts as the end of August, I expected that we would have a very good September as these contracts closed, but I’m still surprised that sales set a new post-recession record for any month.

For the year, we have sold 577 houses in Greenwich and this is more than the 526 houses we sold in all of 2019. Now 2019 was not a great year, but we will easily break the 600 house sales level this year as we have 173 contracts waiting to close. Any year over 600 sales is a good year for Greenwich. But we will likely be over 700 sales, which makes for a great year. If you just take the 173 contracts, we have outstanding, also up 150% over last year, and add them to the sales YTD, you come up with 750 sales and contracts. We might even exceed 800 sales.

I say might, because our 173 contracts are down from our 193 contracts at the end of August. It’s possible, we may finally see the sales curve start to drop in October as our contracts are down 20 from August. It just depends on how many of the 173 contracts that we have waiting close, actually close in October versus later in the year. In a normal October, we sell around 41 houses. We should easily double that this year and might make it three months in a row with over 100 sales.

The market last week was as hot as it has been all year, when you look at our weekly transaction, sales and contracts signed. Last week we tied our previous high for the year at 68 transactions.

All these transactions are sucking up inventory quickly. We are down to 477 single family homes or down 23% from last year when we had 622 listings at the end of September. For every price category below, our inventory is from last year.  

Over $10 million we are up 2 listings to 35 listings. As we are seeing an increase in high-end sales over $5 million, we are seeing more people listing their houses. This increase in listings over $5 million has been mostly matched by sales. The result are big drops in months of supply starting at $3 million and going up. For example, when you take the 8 sales over $10 million and add in the 4 contracts, the months of supply have dropped from 4 years of supply to 2.5 years of supply.

Over $5 million, we went from a cold market to a warm market. From $5 – 6.5 million, we only have 14.4 months of supply. Drop down to $3 – 4 million and you are looking at 7.2 months of supply. This is the kind of number you see in Greenwich around $1 million not at triple that price.

As of 10/1/2020InventoryContractsLast Mo. SoldsLast Mo Solds+ Contracts YTD Solds YTD+ ContractsMos SupplyMos w/ ContractsLast Mo. Annlzd
< $600K114515160.60.70.3
$600-$800K16751229365.04.73.2
$800K-$1M151282038503.63.21.9
$1-$1.5M48371249981354.43.74.0
$1.5-$2M552723501011284.94.52.4
$2-$3M1003226581351676.76.33.8
$3-$4M75252045851107.97.23.8
$4-$5M4112517294112.710.58.2
$5-6.5M417714233016.014.45.9
$6.5-$10M509413162528.121.012.5
> $10M3542681239.430.617.5
          
TOTAL4771731162895777507.46.74.1

When you take the September sales and analyze them to calculate months of supply you can see big drops from $1 million all the way to the very top. I have a listing that I put on last week at 343 Sound Beach Ave in Old Greenwich for $2,195,000. It’s an older house, but it has been freshly renovated and hit a sweet spot with lots of showing right out of the gate.

I’m seeing the same thing at 677 River Road in Cos Cob, which is on for $1,3900,000. This is a nice 2,500 s.f. house on 1.1 acres. Being on River Road it slopes up from the Mianus River and has a limited backyard, normally a significant issue for families with kids, however, with limited inventory we are seeing more showings to families than we are to downsizers who often want less yard to maintain. Removing a few trees to create a yard when you only have 3 – 4 months of supply starts to look much more viable to those young family buyers.  

                House prices up 15.2% in Greenwich – Sort of

I was talking to brother, Russ Pruner, a Realtor since 1980, who has seen a lot of ups and a couple of downs in Greenwich real estate. We were both marveling at how all this demand hasn’t pushed up prices more. When you look at the sales price to assessment ratio for 2020, we are only up 1.0% for the year in sales price. On the other hand if you compare the average sales price for this year so far to last year, we are up from a 2019 average of $2.38 million to $2.59 million or an increase of 9.0% which matches some of the price increases that we saw in the 80’s, 90’s and early digits. In many of these years we were seeing double digit percentage increases in prices per year. In 2004 we sold 835 houses listed on the Greenwich MLS and had another 144 private sales.

If you want a dramatic number, the median increase is 15.2% in sales price for September 2020 compared to last year’s median. Much of this apparent appreciation is simply that we are selling more houses above the median this year. We are though seeing real price increases in the last two months as you would expect with sales over 100 house these last two months.

I know, what you are saying, which is how much is my house up? My best guess 4 – 6% with much of that coming in the last couple of months, but why isn’t it more? First off, each house is different and is its own micro-market. Houses that need work in Byram have not increased like moderately priced houses in mid-country, then again Byram saw some of our best appreciation pre-Covid.

Also, as I’ve written before, Covid buyers are running from NYC and are looking at lots of options, particularly under $1.5 million. I actually had a Covid buyer, who was interested in Greenwich, ask me how it compares to New Canaan, a very common situation, but then she asked me about Wilton and Fairfield, not towns that we usually compete against for buyers. Despite all this new “competition” Greenwich is doing just fine in the marketplace.

Curiously, for all the talk of multiple bid situations only 14 out of the 116 sales in September went for over list. Given that, with winter and the holidays coming up, now is not the best time to go with a premium list price. Save that for the spring market when you’ll have time to adjust the price if you over-price the house.

We are seeing other stats that are likely to lead to increased prices. September sales were on for a median of only 96 days compared to 140 days in July. The sales price to original list price was 95% compared to 92% in July. Lastly our inventory is continuing to stay down, making for a competitive market. Normally, I don’t suggest listing your house in October, but I do this year, and the sooner the better.

The $2 billion question is will we make to 800 sales this year. We’ll have no problem with 700 sales as we already have a total of 750 sales and contracts with a whole quarter to go. We’ll need about 75 sales in each of the next three months and that shouldn’t be a problem in October. But our contracts have dropped from 193 at the end of August to 173 today and we have the holidays coming up. We also have the election uncertainty, never a good thing for house sales, and Covid cases are going up again in parts of NYC. We’ve still got a good shot at making it, if we get anything like the number of contracts signed in October as we saw in August and September. Stay tuned, it will be an interesting 4th quarter.

September 2020 on Record R.E. Sales Pace in Greenwich

The Greenwich real estate market is going into uncharted territory. After a near record August, September is continuing hot after a short rest for the Labor Day weekend.

  • September will likely be a record with 157 contracts and sales so far this month
  • Last year we had 46 sales for the whole month of September, as of 9/25/20 we have already had 95 sales and we will break 100 sales for the second month in a row
  • We had a big drop for the 4-day Labor Day week, but transactions rebounded strongly the last two weeks.
  • We have yet to see a fall drop off as sellers are continuing to supply inventory late in the year, but inventory is going off about as fast as it is coming on
  • Inventory continues tight with 491 house listing versus 622 listings last year at this time a 21% drop
  • High-end NYers are looking for weekend and bailout houses as Greenwich is looking more attractive than the City and is much closer than the Hamptons
  • We have 67 sales and contracts over $5M this year compared to 39 sales and contracts as of the end of September last year an increase of 72%

Making a Good House on Long Island Sound a Great House

We have a lot of great houses in Greenwich that sell at premium prices, but these houses, particularly, the older ones, were not built the way you see them today.  Their owners moved with the times and renovated these houses to include the features that they and other people want. Today we are going to look at 22 Cherry Tree to see some of the things that were done to make a good house great.

                Location, Location, Location

First off, the house at 22 Cherry Tree Lane has location (Riverside), location (Harbor Point Association) and location (great views of Long Island Sound).  For many folks in Greenwich, and even in Riverside, these streets may not be known, as unless you are going there, you aren’t going through there as the streets on the southern end of Riverside all end at the Sound.

The Harbor Point Association was at one time a great estate of some 40 acres and now hosts some 35 houses. The association fronts on Greenwich Cove and the Sound and comes with its own marina and beach along a breakwater that reaches out into the Sound. It also has one of the nicer security guards at the front gate and many of the houses overlook a tidal pond with a weir at the opening that keeps the pond full at low tide.

                A Hot Neighborhood Today

The present owners bought the house back in 2013 and it was a good house with 5 bedrooms and 4/2 baths on 1.05 acres with beautiful views of the Sound and tidal pond. (On the other side of the pond is 34 Indian Point Lane that sold in June of this year for $42,175,000 and also 32 Indian Point Lane which is listed at $20,995,000, but it’s too late if you wanted to buy it as it is under contract.) In 2013, 22 Cherry Tree was a two-story house with a portico across the front and seven gables on the second floor. It had been listed originally in 2011 for $6.99M. The following year it came back on at $5.49M and towards the end of 2012 was relisted for $5.19M and sold for an even $5 million on July 8, 2013.

                Finding Ways to Improve a Good House – The Pool

The question for the buyers was how to take a good, solidly built house and make it better. The new owners and the architects came up with several ways to improve the house. The most obvious change was the addition of a large pool right out the back door. The owners were originally told this could not be done, but with some creativity, perseverance and $400,000; the pool got built.

While the pool is beautiful much of that cost was not paid to Shoreline Pools to actually build the pool. The lot is 1.05 acres and this area is not served by town sewers, so each lot needs a septic system. In the case of 22 Cherry Tree Lane, the septic system was located right where the pool would go. So. Redniss & Mead had to come up with an engineering solution. The whole septic system was moved from the large yard on the side of the property to the rear of the property, which meant you needed engineering studies and the approval of the Town Health Department. The nice thing is that moving the septic system meant that area is now a level yard ideally suited for the present badminton court or other outdoor activities.

This area of Riverside falls within the Coastal Area Management Zone so it gets extra scrutiny from the town Planning and Zoning Commission. The regulatory process for all town agencies took two years to complete and cost a substantial portion of the $400K spent on the pool. Another major cost was that owners wanted the pool to be a roughly the same level as the first floor of the house to get better views of the water and sunsets. This required bringing in dozens of truckloads of dirt. At the end of the day the owners had a beautiful pool, an amenity that is in great demand in the Covid era.

                Adding interior space and improvements

The owners also wanted several additional features including a large walk-in closet in the master bedroom, a screened in porch, an elevated place to sit and watch the gorgeous sunsets and more space. They also wanted an updated kitchen, a second floor laundry and more parking spaces. The walk-in closet had an easy solution that was hard to do. Right next to the master bedroom was a small bedroom that didn’t work well as a bedroom but made for a very nice walk-in closet and an upstairs laundry room.

The hard part was figuring out how to replace that bedroom as you don’t see many four bedroom houses at this price point. The solution was to add a third floor but zoning only allows for 2 and a half stories and a maximum height of 40 feet. A half story does not mean that ceiling is only 4 feet high on the third floor, it means that the size of the floor can only be half the square footage of the floor below. The height requirement would also have been violated with a standard peaked roof, so the third floor had a roof with two peaks each lower than a full peaked roof.

The setbacks in the RA-1 zone are 50 feet for the front and backyards and 25 feet on the side, so how to add floor space without significantly expanding the overall footprint of the house. One way to do this was to use the “wasted” upper space for the cathedral ceiling in the living room. By putting a ceiling over this space, the owners got a playroom on the second floor. Directly off of the living room they screened in part of the portico and put a roof deck on top, which became one of the great features of the house.  Now you can sit and watch the water from an upstairs vantage point.

At the same time, they enlarged the windows on the second floor to let in more light and make the views of the Sound ever better. One area where many homeowners have particular requirements is the kitchen. Today’s kitchens are just as much gathering areas as are the adjacent family areas.  The owners hired Kitchens by Deane to give the kitchen a warm inviting feel, while still being very functional.  They also opened the kitchen to the family room and redid the large center island.

Much of this work was done before the family moved in, though the long approval process for the pool meant that that work was going on while the owners were there. These changes and improvements in total came to $4 million over and above the purchase price, but in the end the owners got a house that felt like new and had everything that they wanted.

As I often tell buyers, very few people ever regret creating the house that they really want. The costs to create a great house are not insignificant, but why put up with house features that make you unhappy every day. Your home should be the castle that you want.

Real Estate Sales Soar in Pandemic – Why Some Houses are Still Not Selling

Even in one of our hottest market ever 13% of our 491 listings have been on for more than a year. Of those 64 old listings that have had their birthday anniversary, 18 of them have actually had their second birthday and 5 of them have actually been on for more than 1,000 days, 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.