Greenwich Real Estate in August 2024 – A lot like August 2023

August is always a tough month to try to figure out what is going on in the market, because not much is going on in the market.We don’t see a lot of new inventory come on as most people are waiting for the fall market in September. Also, most of the sales that close in August are from contracts signed in prior more active months.

We are, however, seeing some clear trends that have developed over the last couple of months and have continued into August. These trends may bode well for a little more balanced market. Since June our inventory has exceeded the inventory that we had in 2023, However, we still are not close to the inventory that we saw in the next prior year of 2022 and down more than 75% below the inventory that we saw in August 2019.

Having said that, the actual number of active listings has continued to trend down as it always does in the second-half of the year, just not as fast as it did last year. We have seen a little more inventory come on in the first week in September, but the big question is will the number of new listings accelerate in September.  What we have seen is that, as has happened throughout 2024,very low inventory has led to a below average number of contracts, which has led to lower sales in 2024 compared to the last few years.

The good thing is with inventory up a little bit and contracts down a little bit we're seeing slightly better months of supply overall. Our overall months of supply for the entire market is 3.2 months, i.e. if no more listings came on, we would sell out our present inventory in just over 3 months. This is up 0.7 months of supply from what was an astounding low of only 2.5 months of supply in August 2023.

The market has seen increased months of supply though MoSis up only slightly from $1,000,000 to $3 million, which is the heart of our market. This price range has 40 single family home listing and YTD sales are 170 homes.

Interestingly, our highest increases in months of supply are under $1,000,000 and over $6.5 million. Under $1,000,000, the houses in inventory have been on for an above average days on market. Anything in that price range that's in good shape and price to market goes in a few days to a couple of weeks. At the present time,  we only have nine listings under $1 million. Their median time on market is 40 days compared to a median of 19 days for sold properties in August.

At the high end,we're looking at 7.7 months of supply from $6.5 to $10,000,000 and 21.1 months of supply over $10 million. Having said that, our year-to-date sales over $10 million are up 3 sales from 8 to 11 sales and our sales from $6.5 to $10 million are about the same at 23 salesYTD.

The really remarkable thing about our very high-end market is that we're up 20 listings over $6.5million which gives us 52 listed properties. Compare this toother end of market where you have to go all the up $3,000,000 to get only 49 listings.Overall, our high-endsalesare doing  well with 35 sales over $6.5 million and an additional 30 sales from $5 million to $6.5 million.

We do have significantlylower inventory from$4 -$6.5 million with nine fewer single-family homes in this price range. It all depends on how you slice and dice your price ranges as to what story you want to tell.

For the overall market, sales rose strongly from February 2024, traditionally our lowest inventory and sales month, to June and have essentially leveled off for July and August. Each month sales have been below our 10-year pre-COVID average, but sales have been constrained all year by the aforementioned lack of inventory. One thing to note is because our days on market is so short we get a lot of blue moon sales where things come on and go to contract in the same month. So these listings never show up in the end of the month inventories. They do show up in YTD sales, it’s just that our inventory numbers are not quite as bad as they might seem, when the blue moons aren’t included.

For most of the market from $800,000 to $6.5 million, we are right around three months of supply and even under that for some of these price categories. Under 6 months of supplyis considereda sellers’ market so under 3 months of supply is a super-seller’ market.

Our market is also stable. When you add in contracts and assume they'll close in 45 days, our months of supply with sales and contracts is almost identical in every price category with around three months of supply. That indicates a relatively constant level of demand.

Of course,we're now in the fall market and September will be an important month to see whether this slight loosening of the market will become agreater loosening. Even if the loosening continues  it will be months before we get back to anything like a normal market of 500 or so listings in September.

The one thing that the contracts do indicate is that the high-end is actually an improving market. This is not that unusualsince post the Great Recession as very high-income earners aren't getting their big bonuses at the beginning of the year like the large majority did back in the digits decade. Post Great Recession, we are now seeing good activity in the third and fourth quarters for very high-end sales.

The Fed announced a rate cut for September and this may change the vibe of the market but given that most sales in Greenwich are not using mortgage contingencies the changing interest rate may not help that much. In fact, it might hurt a little bit because people with large bond holdings were finally getting decent bond payments, and these will drop slightly. Of course, at the same time the higher interest rates push down bond prices, but that change for people who hold their bonds for years is not that significant.

Expect to see more inventory come on in September and greater numbers of new listings than we see sales. We  will almost certainlysee more of the same in October with the presidential elections in early November and election uncertainty will slow our market . Curiously, it doesn't seem to matter who wins the election, it's the uncertainty that freezes people from moving forward.

The main reason for more inventory from this very low base is that we are getting to the point where people who have been keeping their houses off the market are starting to feel biological pressure. More children have been born and families are having to stay in the same smaller house. This will eventually lead to a push for larger houses.

At the other end of the age range, older folks may decide it’s finally time to downsize to smaller houses and condos. Many of these people have been holding out for the last several years. Having to take care of large houses and having more trouble dealing with stairs, moving to a condo or a smaller house, particularly with an elevator starts looking pretty attractive.

In Greenwich the stock market plays a big role, it has hit record highs this year and we are seeing some people moving some of that stock market money into Greenwich real estate as the stock market is looking a little frothy. Also, real estate is an excellent hedgeagainst inflation. Ifanything,close to the amount of money that each presidential candidate is talking about pouring into the economy either through reduced taxes or more government grants. you can expect to see a revival of inflation and real estate is a major hedge against inflation. For renters’ inflation means higher rent costs. For homeowners, inflation means more equity.

Stay tuned...