February is traditionally the worst month of the year for sales, and let’s hope that is the case for February 2024. We only had 17 sales last month. We had no sales of a single-family house under $800,000 so far this year, while we had 29 sales of houses under $800,000 last year, with 3 of which were in December 2023. Under $1 million, we had 7 sales last year and only 2 sales this year. At the upper end, we have had no sales over $6.5 million in February and only 1 sale over $5 million. Last year at this time, we had 3 sales over $6.5 million, with all three being over $8 million.
For sellers, the only really good news in sales was from $4 to $5 million, where sales were up 16% from 6 sales in 2023 to 10 sales this year, or an increase of 67%. Overall, our 17 sales this February were up 2 sales from last year’s 15 sales. Of course, we did have 1 more day this February compared to last year or an increase of 3.57% in days over last year. We also had both of the two extra February 2024 sales on February 29th, so but for the leap day, our sales this year would have been the same as last year.
All of this is a convoluted way to say that on the sales side, the first two months of 2024 look a lot like the first two months of 2023 with a total of 45 sales. This compares to our 10-year pre-Covid average of 66 sales. Bottom line, Greenwich house sales have not been good. You have to go all the way back to the deepest part of the Great Recession to find 2 first months that were as bad as 2023 and 2024. Of course, the first two months of 2009 make this year look great as we only had 17 total sales in January and February 2009.
The problem is, of course, inventory. Just when you think inventory is recovering from its all-time low of 88 single-family home listings in January, we bump into a glass ceiling. Our inventory soared from that record low of 88 listings at the beginning of January to 114 listings by the end of the month, or an increase of 30% in one month. Make no mistake, even as inventory was getting better week by week, the inventory number at the end of each week was an all-time low for that week and well below the previous record low inventory that we saw each week in January 2023.
Then came February, and inventory dropped back for two weeks, then inventory recovered, reaching 124 listings by the end of the month. This month, inventory continues to go sideways at a time when it should be climbing sharply each week as the spring market is well underway. In 2019, we had 454 listings at the beginning of the year. By the end of January 2019, we had 476 listings, and by the end of February, we had 532 listings with another 18 added in the first week of March 2019. What this means is that our present inventory of 119 listings could quadruple and we would still be below our inventory in the first week of March 2019.
You might think with sales low and inventory low that not much is going on in the market; and you’d be wrong. It is combat buying out there. In January, I put a listing on in central Greenwich for around $2 million, and it had a signed all-cash contract in 8 days. Russ and I put listings on in Cos Cob just under $2 million and Riverside at $3 million plus once again both got an all-cash contract in 8 days. All deals were for over the list price. While it was a good start to the year for us, we have a fair amount of company. Of our 45 sales so far, of our 52 sales so far this year, 17 of them were on the market for less than 14 days. Of those 17 sales, 16 went over the original list, and the other went for the full list price. Speed, tactics, and aggressive bidding are crucial in this market for the hot properties.
You see the same thing if you look at contracts. At the end of February, we had 59 contracts, only 9 of which were contingent contracts. For those contingent contracts, the median days on the market were 90 days compared to 22 days for the non-contingent/all-cash deals. (It’s actually worse than that as the contingent deals continue to accumulate days on the market until they go non-contingent.) The median price for a contingent deal was $1.3 million compared to $2.5 million for all-cash, non-contingent deals. What we are seeing is that lower-priced houses that need work and have been on the market for several months are about the only place where buyers needing a mortgage contingency have a decent shot at a house in Greenwich.
Never has “Cash is King” been more true. That, however, doesn’t mean you can’t get a mortgage; it just means buyers shouldn’t go into battle with a knife when your competitors have a pistol. For buyers, what is at risk is your 10% down payment; $150,000 on a $1.5 million dollar deal. If you are one of those buyers, the first thing to do is to get a loan commitment or be underwritten, pre-approved on your mortgage. This way you know the bank only needs an appraisal, a contract, and a couple of weeks to get approved. Many buyers need multiple months to move out, and if they know they get a higher price and only have to wait a couple of weeks rather than a month or more, you’ve got a shot.
Another way for the buyer who is going to get a mortgage is to take the risk that you might not get a mortgage provided you have an alternate source of funding. How is your stock portfolio, 401(k), or crypto doing? If you can cover the purchase price, then your 10% down payment isn’t really at risk, just the potential for more return. Then again, there is a good chance that Greenwich real estate may hold its value better than your other asset class.
We are also going through the greatest intergenerational wealth transfer in history as the baby boomers get up in years. I’m working with two clients where the house hunt is a family affair. The first-time homebuyers are bringing a lot of internet skills to the table, and the older generation and bringing experience about renovating houses. (BTW: Check out the updated version of the heavily advertised homes.com and also the property search at greenwichrealtors.com.)
The situation is not as bad as the inventory and months of supply numbers might have you think. The three houses that we had that went to contract quickly and 14 other listings were blue moons. They never showed up in the month-end inventory because they came on the market and went to contract in the same month. That’s a large percentage of our contracts.
We are going to sell hundreds of homes this year; if you are a buyer, if you have a much better chance of getting the house, if you are more prepared than your competitors and well-advised.
If you are a seller, there is probably no better time to get a quick sale, at a good price with buyers willing to accommodate your timing, whether it be closing in 3 weeks or 3 months.
