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In the first quarter, we sold 195 houses totaling $581 million dollars. This compares to the first quarter of 2020 when we sold 101 houses totaling $217 million. So, sales are up 93% and dollar volume is up 167%. The increased sales volume is driven by a major shift to higher-priced houses. As discussed last week, the work and schooling from home changes in lifestyles has meant that lots of the homes that people live in now are too small for the new 24/7, multiple offices and multiple schoolwork areas lifestyle.
We are seeing not only people moving from NYC to Greenwich for more space and much less crime, but lots of Greenwich folks right-sizing. For most families that means moving to larger homes with more rooms, more land and more amenities. As always though we have many folks, that have retired and are empty nesters, moving to central Greenwich to condos, co-ops and apartments. These senior buyers are coming from both Greenwich and Westchester County. The problem is that we don’t have enough people leaving these downtown units, leading to the pipeline clogging up.
The demand is there, but the supply until this week was flat. Finally, this week we saw inventory actually go up by 9% from 285 last week to 311 listing this week. The only problem is that we should be around 550 listings, not 311 listings. Part of this increase in inventory, may be the result of increased prices that we have seen, which will be discussed at the end of the article.
But let’s look at how the Greenwich neighborhoods are doing.
Our sales numbers in the first quarter for several neighborhoods are just weird. Normally, we see a set of descending stair steps, as we have more inventory than we have sales for the for first three months and more sales than we have contracts. Byram, Pemberwick, Glenville and South of the Post Road, think downtown, Chickahominy and Belle Haven, illustrate this typical first quarter pattern.
Our weird neighborhoods are Cos Cob, Old Greenwich, and particularly weird is the pattern in Riverside. We actually have more sales in Riverside the first three months of the year than we have inventory, and we have more contracts than we have sales. The result is that we only have 2.3 months of supply in Riverside and if you add in contracts it goes from ridiculous to unthinkable at least if you are buyer.
If you are buyer looking in Riverside, because of the excellent Riverside School (nice job Mr. Weiss and teachers) and you are looking between $2.0 and 2.5 million, you have choice of four listings and one of those came on yesterday. For all of Riverside you only have 34 houses on the market. Now that sounds bad, but at the end of March you only had 19 listings for the whole neighborhood.
At the other end, is backcountry where we had 65 listings at the end of March with 21 sales in the first quarter and 20 contracts.
Backcountry has been slower this year than the rest of the town, but one place where it blows away every other neighborhood is for the highest sale so far this year. If you look at the chart, the maximum sale in backcountry goes to the top of the chart and then it keeps going one and half more times to $45,000,000. Our next highest sale is $13.3 million in mid-country.
We have Tommy Hilfiger to thank for taking a great backcountry property and making it even better. He bought it at $31.3 million in 2010 and made a lot of improvements. Over the years, he has done that to several property. I used to regularly see him walking on Buckfield when I had a listing at 37 Buckfield. One of my regrets is I never thanked him for what he did for high-end sales in Greenwich, but then one of the things you get in Greenwich is privacy.
The other things to note is how some areas have a relatively small gap between the lowest priced sale and the highest, while other areas have big gaps. For those areas with big gaps your averages are going to jump around every time there is a high-end sale, so take changes in averages in these neighborhoods with a grain of salt.
A little more than halfway up the months of supply chart is 6 months of supply, the traditional dividing line between a buyers and a sellers’ market. Only backcountry goes over that line into a buyer’s market. One of the reasons for that may be that we still have some shadow inventory left in backcountry, whereas in most of the rest of the town, those folks who wanted to move and had waited years, listed their house and got it sold last year.
For our larger neighborhoods, Riverside is leading the pack with 2.3 months of supply. Now this is really amazing when you consider that the average sales price in Riverside is $2.39 million dollars. For most Connecticut town, that average price would be the high sale for the year and for many towns, the high sale for the decade.
Townwide we have 4.4 months of supply and most neighborhoods are between 3 and 5 months of supply. If you are coming to buy in Greenwich, you need to come with an underwritten pre-approved mortgage or have cash.
As you might expect with sales prices in the first quarter for single-family houses going from $520,000 to $45,000,000, we have widely varying prices per square foot. At the moment, South of the Post Road has the highest sales price/sf at $728/sf followed by Old Greenwich and backcountry. Normally backcountry wins this category, but this year we need more high-end, high $/sf sales. Backcountry is actually much better than we have seen it in many years, just not as good other sections are doing.
Part of that is the one area where are seeing enough supply is our over $10 million market. Luckily, Governor Cuomo, has really taken an interest in supporting Greenwich’s high-end real estate. With the help of the NY Legislature, NY state will now have the highest state taxes in the nation even exceeding California. For high earners in NYC, combined city and state taxes can be almost 16% compared to 6.99% in Connecticut.
I expect you’ll see some rather impressive high-end sales later in the year. In fact, post-recession most of our high-end sales have happened in the 4th quarter, so trust in Cuomo and be patient.
One of the best indicators of sales appreciation in Greenwich is the ratio of the sales price to the tax assessor’s assessment. Our chart for the first quarter of 2021 is remarkable in that every neighborhood, but Banksville has a SP/Assmt ratio that is up from the last revaluation in 2015. (I also wouldn’t worry about Banksville, that price drop is based on only three sales in the first quarter.)
What’s really remarkable is that for all the press that Old Greenwich has gotten for price appreciation, the best neighborhoods to put your money in back in 2015 was Byram where sales prices are up 45% from the revaluation that was effective 10/1/2015. This all the more remarkable, because Covid has hurt Byram and Pemberwick in particular due to their higher density in the last year. The other nice thing to see is backcountry and midcountry with SP/Assessment rations in positive territory. This is actually good news for front country, since we are going to have another tax revaluation this year. With prices coming up in northern Greenwich, the shift of the tax burden to front country will not be as great as it would have been had the numbers in 2019 been included.
Overall, the SP/Assmt ratio is up 15% in the last 5 years. If your assessment percentage increase goes up more than the townwide average, you can expect your taxes will being going up. If you live in a neighborhood that has appreciated, but less than the townwide average your taxes are likely to go down in 2022 when the new assessments will be used to calculate taxes.
Overall, things are looking up for Greenwich real estate. The one major fly in the ointment is half a dozen bill in Hartford including a proposal for state-wide mansion tax.
Stay tuned.
