APRIL 2019 GREENWICH MARKET REPORT – $40M Sale Second Highest Ever

by Mark Pruner

This month is time for some slanted reporting, but it’s only fair to balance some of the Greenwich bashing reporting. In April,  we had 34 sales that totaled $102,340,772. Based on a population of 62,000 people this works out to be amazing $1,650 sales for every man, woman and child in Greenwich in just one month.

4/30/19 Inventory Contracts Last Mo. Solds Last Mo Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 7 1 2 3 5 6 5.6 6.4 3.5
$600-$800K 14 5 0 5 4 9 14.0 8.6
$800K-$1M 33 8 1 9 9 17 14.7 10.7 33.0
$1-$1.5M 68 15 3 18 22 37 12.4 10.1 22.7
$1.5-$2M 102 19 8 27 18 37 22.7 15.2 12.8
$2-$3M 148 32 11 43 25 57 23.7 14.3 13.5
$3-$4M 104 13 3 16 12 25 34.7 22.9 34.7
$4-$5M 74 3 3 6 5 8 59.2 50.9 24.7
$5-6.5M 59 2 0 2 2 4 118.0 81.1
$6.5-$10M 52 3 2 5 3 6 69.3 47.7 26.0
> $10M 32 0 1 1 3 3 42.7 58.7 32.0
                   
TOTAL 693 101 34 135 108 209 25.7 18.2 20.4

Our average sales price in April was $3,010,023. This is up a huge 25.6% from our average sales price for all of 2018 which was $2,396,448. In 2018 median price, the price where half of the sales were above and half were below, was an enviable $1,765,000. In April of 2019, our median sales price was up even more to $2,302,000. This is a 30.4% increase in the median sales price in only 4 months.

We also had three sales over $5 million in April. The highest sales price was 33 John Street selling for $14,875,000. This property was purchased in July of 2010 for $2,875,00. The sales price represents a 517% increase in the value of the property in less than 9 years of ownership.

It also shows that value of the land purchased was only 19% of the ultimate sales price, much less than the rule of thumb of land price being a third of the sales price for new development; thus, illustrating the amazing bargains to be had in backcountry land purchases.

Of the other two sales, 24 Windrose Way sold for $9,400,000 in a private sale, a clear sign of a hot market where property are being sold even before they can be listed. The other sale over $5 million was 35 Winding Lane, which sold for $6,850,000 after being bought for $6,000,000 less than 3 years ago or an increase of 14.2% in only 35 months.

Our 34 sales in April are up 36%  from the 25 sales that we had in March of this year. May sales are expected to continue to climb as we have over 100 contracts waiting to close. The market segment from $2 – 3 million dollars is doing particularly well with 25 sales so far this year with 11 of those sales being just in April an increase of 3 sales from April 2018. In addition, we have an amazing 32 contracts pending in that price range up 10 contracts from last year.

Looking back at 2019 so far in the ultra-high end, over $10 million, we have the same sales as last year, but one sale this year wasn’t reported on the GMLS. In February 110 Field Point Circle sold for $48 million also in a private sale. Were this reported on the GMLS it would be the second highest sale ever. The $48 million sale of Victor Borge’s old estate, is even more impressive, when you realize the purchase price was $17.5 million in 2009 in the heart of the Great Recession. Buying when everyone else is selling and waiting can be an excellent strategy. Taking a great property and making it even better also can lead to excellent returns. This is one of the premier properties in the U.S. and the buyer agreed.

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So that’s the slanted version and everything I wrote above is accurate, but it actually makes me a little queasy to write it, because it’s not a fair representation of today’s market.

For the whole market, April was better than March, but still not that good. (April is almost always better than March as we get into the heart of the spring sales market.) Our inventory was up 61 units or 10% to 693 single family home listings at the end of the month and is now 707 listings.

Our sales YTD are 108 or down 29% from last year. On the getting better side contracts are 101 contracts which is down only 13% compared to being down 37% at the end of March.

Our years of supply is still high at 26 months, which is up 10 months from the end of April 2018. When you factor in the contracts outstanding, we are 18.2 months of supply, still higher than last year, but by only 5.7 months.

As to changes in the average and median prices, we are seeing a greater drop in sales from $600,000 to $2 million. So, when sales are down below our average price the average goes up and sometimes, as in April, both the average and median go up a lot. Unfortunately, the sales above $3 million are also down just not as much as in the higher price ranges. The one exception to this is the $6.5 – 10 million price range where we had 2 sales in April compared to none in April 2018. For the year, however we have 3 sales in this high-end category, the same as last year.

Overall, it’s a buyer’s market, but things are headed in the right direction, at least for the month of April, I just wish they’d get there a lot faster.

The Devolution of News and the Bashing of Greenwich

My column in this week’s Greenwich Sentinel was about the media’s need to sensationalize bad news about the Greenwich real estate market and the selective fact selection the authors use to support their premise. You can read the article below with links to the Wall Street Journal and ZeroHedge articles mentioned. The Sentinel posted it on their website here. They also wrote an excellent editorial on what I called day-glo journalism and the history of yellow journalism

If you want to hear what is really going on in the Greenwich real estate market, Carolyn Anderson, Paul Pugliese and I are talking about the north Greenwich market at the Round Hill Association annual meeting on Wednesday May 1st starting at 6:30 for the reception and probably around 7:00 for the presentation.

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[Article as it appeared in the Greenwich Sentinel plus links]

The Devolution of News and the Bashing of Greenwich

Last week the Wall Street Journal ran a story entitled: Wealthy Greenwich Home Sellers Give In to Market Realities. It had a lot of inflammatory comments and “facts” all woven together to leave the impression, as one financial website dubbed their paraphrase of the article, that The Greenwich Housing Market Is Imploding.

Let’s take a look at exactly how yellow journalism’s modern incantation, what I call “day-glo” journalism, works. 

The idea behind day-glo journalism is to take an overstated idea (such as, in the case of the WSJ article: a single real estate auction is an indication of the “never-ending slump” in Greenwich real estate) and create a story from it that will get a lot of clicks and shares and re-tweets, which are the new standards for a career advancing  article.

Day-glo journalism hijacks this story right from the opening sentence: “After four years on the market, and three price cuts, a stately Colonial-style home on Greenwich, Conn.’s tony Round Hill Road is being sold in a way that was once unthinkable in one of the country’s most affluent communities: It is getting auctioned off.”

To day-glo the news in an article you need to normalize the extreme, so it begins by making four years seem like the norm. Four years on the market is a long time; it’s 1,460 days. Nowhere in the article does it indicate that this number of days on market would mean it was the 8th longest house listing on the GMLS out of 669 listings. Our median days on market is only 172. 

Next, the article says auctions were once unthinkable in one of the country’s most affluent suburbs, but that idea is not attributed to anyone. What has happened in Greenwich is that a number of companies have tried to get into the business of auctioning houses, but in general, these auctions have not resulted in money in the owner’s pockets and there have only been a handful of them attempted. 

It is not that they are unthinkable but rather that they are simply ineffective. To my way of thinking, we don’t see more auctions here because they don’t work well in Greenwich, since bidders don’t tend to show up. We did have one “successful” auction where a house listed for $7.25 million sold for $4.48 million, but that hasn’t encouraged many sellers to try auctions.

In day-glo journalism unsubstantiated statements are taken as fact, such as this one, “Many wealthy New Yorkers are opting to live in the city, rather than in the suburbs.” Really? How many is “many” and from what source are they getting this information? How do they know that? The simple answer is they don’t know. 

In a clever sleight of hand, the article throws in: “The seemingly never-ending slump is leading some sellers to accept less—sometimes a lot less. Owners who paid top dollar for their homes in the Fairfield County town in the mid- to late-2000s are routinely selling for less than they paid.”

There was a bubble that peaked around 2007, but to refer what has happened since as a “never-ending slump” is simply inaccurate. Many houses on the waterfront and in other areas are actually up in value, particularly those bought in 2009, but that sort of distinction would slow the narrative and ruin the day-glo. Also, our sales were up in 2018 over 2017, but that is also not mentioned in the story. 

In day-glo journalism, many inconvenient numbers that don’t support the more salacious narrative of a “never-ending slump” won’t appear in the article. This happens in part because most reporters in today’s 24-hour news cycle and shrinking print circulation are under immense pressure to get the story and move on to the next story. When I have called reporters about articles (although I have not had a chance to talk to the reporter of this particular story), they often say they weren’t aware of the other numbers. Once I called a Vanity Fair writer who had grossly overstated the unsold inventory in Greenwich and her defense was that the “gist” of the story was correct. Unfortunately, the advent of high-pressure “online journalism” allows for just about anything to be posted and for contradictory information (information that doesn’t support the narrative) to just get ignored.

Another favorite ploy is reporting statistical changes without context. For example, “The median price for a home in Greenwich dropped by 16.7% last year to $1.5 million in the fourth quarter of 2018, according to a recent report by brokerage Douglas Elliman.” 

While this statistic is mathematically correct, these changes in the median price are often used to demonstrate that all houses in Greenwich dropped in value, and that’s not accurate. A more thorough investigation of the numbers shows clearly that the change in the median price was due to 1) a big jump in sales of lower priced home sales combined with 2) a small decline in higher priced home sales. Sales of homes from $800,000 to $1,000,000 jumped 60% while sales from $5 – 10 million saw a small decline. Therefore, higher sales below the median price and lower sales above the median caused the median to decrease, but not because there was a general drop in Greenwich house values. 

But why Greenwich? You don’t see Darien or New Canaan getting this kind of attention. Greenwich is well known and articles about Greenwich get lots of clicks. Several years ago, I put up a blog post about a drop in high-end sales, which got picked up by the WSJ real estate blog, then by a Bloomberg reporter and then by Bloomberg TV. The Bloomberg reporter told me that the print story was the number two story world-wide on the Bloomberg terminals that month. The only other story that got more attention, according to her, was a story about a Berlin hedge fund that gave their top people a weekend at a German brothel (where prostitution is legal).

I was told this over a very nice lunch at L’Escale, paid for by Bloomberg. The reporter said her editor would welcome more stories about Greenwich. The negative stories got attention, while the good news stories were mostly concentrated on who were the purchasers and sellers of $10M+ houses in Greenwich. 

People just can’t seem to get enough stories about wealthy people getting their comeuppance. Writers who want to move up in this world of blogs and instantly measured click-throughs have a much easier job of it if they write a negative article, keep the narrative simple, and are willing to ignore contradictory facts. 

When a major publication does this, lots of folks want to jump on the bandwagon. Other bloggers will paraphrase the story and often amplify the negative aspects of the article. This is what happened on the popular ZeroHedge website, where the post about the Wall Street Journal article was made even more negative and was retitled, The Greenwich Housing Market Is Imploding As Prices Tumble As Much As 25%. 

The title, while dramatic, comes from a relatively common situation when selling very high-end houses, which are often listed at 25% more than their final sales price. High-end houses are unique, hard to price, and often come with the high-end owner’s overconfidence. As a result, the original list price is frequently much higher than the sales price. Reporters and bloggers love to talk about the huge discounts that sellers must take to sell their houses, as if this is a sign of major market weakness. While having to take big reductions in price ranges under $5 million is a sign of market weakness, it’s not so much in the high-end market where the sales price (SP) to original list price (OLP) ratio will always be lower. In 2018, our overall SP/OLP percentage was 92%, but over $10 million it was 81.5% and over $15 million the two houses sold at 56% of the original list price. Is this a sign of market weakness or simply owners who select brokers willing to list a house at the highest initial price, regardless of whether the price comports with today’s market?

The short answer is, you really can’t tell.  But we do know that reporters love to quote this price drop as a major sign of high-end market weakness. The other thing that happens with these follow-on articles is their narrative is often more strident and less carefully worded. 

The lead paragraph of the Wall Street Journal’s article reads: Once asking $3.795 million, the four-bedroom property will be sold May 18 with Paramount Realty USA for a reserve price of just $1.8 million.

The ZeroHedge post reads: It’s price tag used to be $3.795 million, but now the four-bedroom property will be sold for its reserve price of just $1.8 million, according to the Wall Street Journal.

So, the story goes from an article about an auction with a low reserve to a story about a house that had a $3.8 million list price and now “will be sold” for its $1.8 million reserve price. 

I could go on, but I’m already well over my word limit, so suffice it to say there are lots more examples of articles bashing Greenwich real estate in a biased manner. The problem is that enough of these articles have accumulated that they are doing real damage to our real estate market. Having a paper like this one, which is more interested in accuracy than in day-glo stories, is essential to presenting a more factual picture of what’s actually going on in the market. 

I am not pushing for rosy stories about the Greenwich market. I am advocating for balanced reporting that takes in the ups as well as the downs. We had a poor first quarter in 2019, which came after a 2018 that had more sales than the previous year. We need both reported. 

Mark Pruner is an award-winning real estate agent with Berkshire Hathaway. He can be reached at 203-969-7900 and mark@bhhsne.com.

GREENWICH, CT REAL ESTATE – 1ST QUARTER MARKET REPORT – A Bumpy Ride

March was a good month for deals from $2 – 3 million where we have 24 contracts waiting to close. This is up 9 contracts from last year. In addition, another 14 houses have closed in that price range. For folks in the backcountry 5 of those sales have been north of the Merritt.

We also saw sales increase in March from $3 – 4 million with 5 sales this March compared to only 2 sales in that price range in March 2018.  For sellers, the market from $1 – 2 million is looking better with only 134 listings, which is down 16 listings from last year. In addition, inventory is down from $5 – 6.5 million and over $10 million by 5 houses in each case.

As of 3/31/19 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 6 1 2 3 3 4 6.0 6.8 3.0
$600-$800K 15 2 1 3 4 6 11.3 11.3 15.0
$800K-$1M 29 1 3 4 8 9 10.9 14.5 9.7
$1-$1.5M 57 9 8 17 19 28 9.0 9.2 7.1
$1.5-$2M 77 12 3 15 10 22 23.1 15.8 25.7
$2-$3M 137 24 3 27 14 38 29.4 16.2 45.7
$3-$4M 96 10 5 15 9 19 32.0 22.7 19.2
$4-$5M 66 4 0 4 2 6 99.0 49.5  –
$5-6.5M 50 1 2 3 2 3 75.0 75.0 25.0
$6.5-$10M 50 2 0 2 1 3 150.0 75.0  –
> $10M 25 1 0 1 2 3 37.5 37.5  –
TOTAL 608 67 27 94 74 141 24.6 19.4 22.5

Now that was the good news, unfortunately, there is more not-so-good news than good news in March and the first quarter of 2019. Overall, our inventory is up 41 houses, our sales are down 28 and based on our contracts being down 39, we aren’t likely to see a significant improvement in April. When you add up the contracts and sales, we are down in every price range, excepted for the aforementioned $2 – 3 million price range.

When you look at each month in the first quarter, January 2019 sales were only down 2 sales from our 10-year average, while February sales were down 10 houses and March sales were down 11 houses from our ten-year average. As a result, our total of 74 sales for the first quarter of 2019 is down from 102 sales in the first quarter of 2018.

This is a drop in overall market sales of 27% from 2018. With a 37% drop in contracts as of the end March, sales for April don’t look good at this point. The result of increased inventory and lower sales has resulted in some dramatic increases in months of supply.

For example, last year at this time we had less inventory and more sales from $4 – 5 million. As a result, we now have 99 months of supply compared to only 21 months of supply at the end of the first quarter 2018. For the entire market we have gone from 16.7 months of supply to 24.6 months of supply or from less than a year and a half to more than 2 years of supply.

When you look at the solds and contracts, the majority of our market activity is concentrated between $1 and $4 million dollars where we have 70% of our sales our 82% of our contracts. Together, we have 107 sales and contract in this mid-market range. The problem is that we have 367 listings between $1 and 4 million.

Under $1 million where our market supply is often well under the 6 months of supply level that marks the line between a buyer’s and a seller’s market, this year we are looking at a buyer’s market. Now part of that is this is the spring market with lots of new inventory coming on the market, but last year we only had 1.5 months of supply in our under $600K market and this year we have 6 months of supply in what is normally always a seller’s market.

We do have a good number of contracts between $1 and 4 million dollars and those months of supply will be coming down barring a really big surge in supply. That surge however can not be ruled out, at least between $2 and 4 million, as we already have seen 19 more listings this compared to last year in this price range.

As I said last month, it’s a good time to be a buyer, but that shouldn’t last. Interest rates are down, the stock market is up, and unemployment is low. Eventually, Hartford will defeat a whole slew of bad bills that overhang our market, and the ones they do pass will at least bring certainty to the market and let people move on with their lives. However, as Bette Davis said in “All About Eve”, “fasten your seatbelts, it’s going to be a bumpy ride” at least for one more month.

 

 

The State of Greenwich Real Estate – 3/27/19 Presentation to the Retired Men’s Association

I did a presentation to the Greenwich Retired Men’s Association that was well attended and got nice write-ups in the Greenwich Free Press and the Greenwich Time.

You can

 

 

What’s Going on with Greenwich Real Estate?

The February 2019 Greenwich Real Estate Report

by Mark Pruner
mark@bhhsne.com

February is a short month, only 28 days, or 10% shorter than January. February is also traditionally the slowest month for sales as older inventory overhangs the market and most newer inventory is waiting for warmer weather. In addition, February is known for having bad, discouraging winter weather, that doesn’t make you want to spring out of bed and go see houses.

3/2/19 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 6 3 0 3 1 4 12.0 5.3
$600-$800K 11 3 2 5 3 6 7.3 6.4 5.5
$800K-$1M 20 2 2 4 5 7 8.0 10.0 10.0
$1-$1.5M 54 6 7 13 11 17 9.8 11.1 7.7
$1.5-$2M 68 11 2 13 7 18 19.4 13.2 34.0
$2-$3M 120 13 4 17 11 24 21.8 17.5 30.0
$3-$4M 81 10 1 11 4 14 40.5 20.3 81.0
$4-$5M 54 2 0 2 2 4 54.0 47.3
$5-6.5M 52 2 0 2 0 2 91.0
$6.5-$10M 47 1 0 1 1 2 94.0 82.3
> $10M 24 1 2 3 2 3 24.0 28.0 12.0
TOTAL 537 54 20 74 47 101 22.9 18.6 26.9

Now having said all that, over the last 10 years we still have managed to average 31 houses sales in February, but in February 2019 we only had 20 sales. This is down 43% from last February’s 35 sales.

If you who read my January report this drop in sales is somewhat expected as our contracts at the end of this January were down, but I never expected a sales drop of this much. January 2019 was nearly the same as 2018 and we regularly see sales and contracts seesaw from one month to the next. We need the big kid to come sit on the seesaw to get the seesaw moving up. For February, sales were down 43%, contracts are down 39% and inventory is up for most price ranges. At the moment it is a buyer’s market.

Now it’s not all bad news in sales, our sick child for 2018 appears to have recovered as sales from $1 – 1.5 million are up in February 2019; one of our two bright spots. The $1 – 1.5 million price category also has had an inventory drop with 10 fewer listings than last year. The result is months of supply in the $1 – 1.5 million price range dropped from 16 months of supply last February  to 10 months of supply this February.

The other good news category is over $10 million where we had two sales, one in backcountry and one on the waterfront in Old Greenwich both for $11 million dollars. (We also have another ultra-high-end house under contract.) Like our other bright spot, inventory is also down to only 24 options for the very well heeled. Combine more sales and lower inventory and we are looking at a remarkable 2 years of supply down from over 9 years of supply not that long ago.

The market just below that, from $5 -10 million continues to be a difficult market and it is even more so for the first two months of this year with month of supply literally off the chart (well at least off the chart if the chart tops out at 4 years of supply).

The large sales drop is worrisome, but what is really worrisome is contracts. Contracts tell you where the market is now not 1 – 3 months ago as sales do. In contracts we are down in every category from $600,000 to $10 million. In total we have 35 fewer contracts at this point this year than we had last year. So March is also likely to see a sale decline also.

Year-to-date, sales are only down 28% and contracts are down 39%, both over a broad price ranges, you have to ask yourself what’s going on. The government shutdown is over, the China trade situation looks like it’s getting better, unemployment continues low, the stock market is up and interest rates are down from their recent peeks.

Whatever it is has to affect houses over a broad set of price ranges. One thing it could be is the extraordinary sturm und drang coming out of Hartford. Right now we have bills to impose a conveyance tax on buyers, to create a statewide property tax, to place tolls on every major, and even some minor, state highways, to broaden the sales tax to lots of businesses and professions that haven’t paid sales tax before and to offload part of the teacher pension problem to the town which will have to raise property taxes to pay for this imposition. Now all of these bills won’t pass, but they all raise the uncertainty level and that tends to freeze buyers. For buyers who are willing to roll the dice, now is good time to negotiate a deal and for sellers now is a good time to be particularly flexible.

But the crystal ball is foggy; we’ve got just one bad month and things could turn quickly. The murkiness of the situation gives the advantage to the bold buyer. (If you are bold, I have a seller who is willing to be flexible. The open house is at 108 Pecksland so stop by from 1 – 3 pm this Sunday.)

 

 

 

 

 

Greenwich Real Estate Statistics for January 2019

January 2019 – Greenwich Real Estate Sales Hold Their Own

Government Shutdown Pushes Contracts Down

by Mark Pruner

203-969-7900

                January Sales

In some ways January 2019 was a lot like January 2018. This year we had 29 sales and last year we had 30 sales. In most price ranges we had about the same sales as last year. Sales were up from $1.5 – 3 million, where we had 13 sales which is up 7 sales from last year or more than double the 6 sales we had in January 2018.

On the downside we had only one sale from $600K – 800K which was down 6 from last year. We also saw a drop of 2 sales in our ultra-high-end, over $10 million market, from 2 sales last January to no sales this year, but we have 3 ultra-high-end contracts waiting to close. Overall these small changes are just the normal numeric chatter you get in a market with only a few dozen sales in January.

2/4/19 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 6 0 1 1 1 1 6.0 15.0 6.0
$600-$800K 9 2 1 3 1 3 9.0 7.5 9.0
$800K-$1M 17 3 3 6 3 6 5.7 7.1 5.7
$1-$1.5M 43 8 4 12 4 12 10.8 9.0 10.8
$1.5-$2M 64 10 5 15 5 15 12.8 10.7 12.8
$2-$3M 110 7 8 15 8 15 13.8 18.3 13.8
$3-$4M 67 6 4 10 4 10 16.8 16.8 16.8
$4-$5M 51 1 2 3 2 3 25.5 42.5 25.5
$5-6.5M 51 2 0 2 0 2 63.8
$6.5-$10M 42 0 1 1 1 1 42.0 105.0 42.0
> $10M 24 3 0 3 0 3 20.0
                   
TOTAL 484 42 29 71 29 71 16.7 17.0 16.7

Contracts

What is not general chatter is the effect that the federal government shutdown had on our local real estate market. Contracts were down 28% from last year’s 58 contracts to this year’s 42 contracts. From $2 million to $10 million contracts were down in every category. Below $2 million the contracts were the same as last year. On the good news side, the ultra-high-end that had no sales last month has the aforesaid three contracts pending.

The overall drop in contracts in January does not bode well for sales in February.

                Inventory

On the inventory side we are having an average year overall, but we have some noticeable changes at different price levels. The jump in inventory under $1.5 million that we had for much of last year is over, at least for now. From $600,000 to $1.5 million we are down 17 listings from 86 houses to only 69 houses presently on the market. The drop in inventory may just be in comparison to 2018 when taxes gave us a bump up on inventory.

At the same time, the inventory from $1.5 – $ 3 million continues the trend that we saw in the latter part of last year with higher inventory. This may be the next phase of the new federal cap on SALT deductions that drove up lower priced inventory in the first half of 2018 having taken awhile to extend into the higher price ranges.

At the high-end, inventory looks just like last year with more inventory from $5 – 10 million and lower inventory over $10 million. I’m working on that with an effort to reach out to high-end weekenders who are tired of the commute and hassles of the Hamptons.

When all is said and done though we are within 1% of the same inventory as last year, now that is up from 2017 just like in 2018, but it’s still to early to tell what the trend will be in 2019

                The 2019 Real Estate Market

So, what can we expect in 2019? Several factors point to a better year; we just had a good January for the stock market, unemployment continues to be extraordinarily low and Connecticut, unlike New York and New Jersey, saw an increase in income tax revenue. (I wonder how much of that came from Greenwich.) The Fed also has gotten smarter and sees the extraordinary sensitivity of this housing market to increased interest rates.

On the down side we continue to hear discussions of a coming downturn, which as companies cut back on spending plans becomes a self-fulfilling prophecy. Also, as we saw last month FUD (fear, uncertainty and doubt) is a big factor in major purchases like a house. The federal government shutdown really upped the FUD factor.

So, for 2019 and most years, I tend to like to look on the bright side. If we get a federal budget, a reasonable state budget, solve the China trade matter and the stock market does okay, all of which are doable, then 2019 could be a pretty good year.

 

2018 Greenwich Neighborhoods Real Estate Reports Reports

 

Townwide Overview

  Grand Total
# Sold 593
 Avg SP  $ 2,396,448
 Avg DOM  202
 Avg. SP/SF  $ 564
Avg of SP/OLP 90.7%
 Avg. SP/ASMT 1.611
Post 2015 Appr 13.4%
Post 2015 Construction 48

Last year we had 593 home sales in Greenwich, up 26 sales or 4.4% over 2017. Our average sales price was just under $2.4 million which was a drop of about $188,000 or 7%. Most of this drop in the average sales price is due not to a drop in home values in Greenwich, but to an nearly 60% jump in sales from $800,000 – $1 million and 25% drop in sales from $5 – 10 million. When the sales below the average price increase and sales above the average price decrease, the average price will drop.

Still, what most people want to know is whether the value of their house went up or down last year. The answer is it depends, particularly, on what neighborhood your house is in and what price bracket it is in. In a prior article this month, I looked at how houses in various price ranges in Greenwich did. Let’s look at how the neighborhoods are doing from north to south and then from west to east.

Backcountry

Section North Parkway
# Sold 45
 Avg SP  $ 3,441,086
 Avg DOM  300
 Avg. SP/SF  $ 509
Avg of SP/OLP 87.7%
 Avg. SP/ASMT                             1.552
Post 2015 Appr 9.3%
Post 2015 Construction 4

In backcountry Greenwich we had 45 sales in 2018 up 1 sale from 2017. Backcountry also has the highest average sales price at $3.44 million. This unfortunately is down from a $3.77 million price last year, thought once again, much of the change in the average sales price is due to the weak sales from $5 – 10 million, where backcountry has half of all the listings in Greenwich.

As to prices, we have three indicators; sale price per s.f., the percentage of sales price to original list price and the sales price to assessment ratio. All three of these indicators were up from 2017, but they are not what you would call robust. The average sales price to original list price percentage in backcountry was up 8.2% from 79.2% to 87.7%, but this unfortunately is still the lowest SP/OLP of any neighborhood. It still however is very good news as demand is better and original pricing is more realistic.

The sales price to assessment ratio also went up substantially from 1.30 in 2017 to 1.55 in 2018. Part of this is the fact that we had 4 spec homes built after the 2015 that were sold in 2018. Here the 2015 assessment is of the vacant land or teardown that was there before. A 1.42 ratio is no change from the assessment (it’s the reciprocal of the 70% assessment ratio). With new construction in backcountry you get assessment ratios of 8.54 and 5.65 for the 2 of the 4 new houses sold last year. This really throws the average off when there are only 45 sales. Overall though 2018 was a better year for sales in the backcountry than 2017.

Mid-Country

Section South Parkway
# Sold 161
 Avg SP  $ 3,083,963
 Avg DOM  223
 Avg. SP/SF  $  570
Avg of SP/OLP 89.1%
 Avg. SP/ASMT 1.478
Post 2015 Appr 4.1%
Post 2015 Construction 7

If backcountry is on its way to recovering from a cold, mid-country is thinking about going back to work. Average days on market at 223 days is only a little higher than the townwide average of 202 days on market; and both are down from 2017. The average sales price to original list price is up a smidge to 89.1% from 88.5%. Unfortunately, this is 89.1% is still the second worst of any neighborhood after backcountry.

We have 161 sales in this area which runs all the way from the Post Road to the Merritt Parkway which ties Glenville for the biggest drop in sales Y-o-Y at 10 fewer sales. We do have 7 post-2015 houses that were sold in mid-country and a whole bunch more custom houses being built for people who bought the land. A client of mine is building 3 high-end houses in this area and the cool CGI pics can be seen if you Google 598 North St.

South of the Post Road

Section South of Post Road
# Sold 58
 Avg SP  $ 2,322,000
 Avg DOM 218
 Avg. SP/SF  $ 684
Avg of SP/OLP 91.8%
 Avg. SP/ASMT 1.755
Post 2015 Appr 23.6%
Post 2015 Construction 4

Like South of the Parkway, South of the Post Road is another eclectic, catchall, MLS defined area. It includes downtown Greenwich, Chickahominy, Bruce Park, Belle Haven and Mead Point. The high-end waterfront and gated community properties give this area the highest price per s.f. at $684 though this is slightly down from last year’s $724 per square. The area also has the second highest sales price to assessment ratio at 1.755 which equates to a 23.6% increase over the last 3.3 years since the Oct. 1, 2015 revaluation date.

Glenville

Section Glenville
# Sold 34
 Avg SP  $        1,104,860
 Avg DOM                        192
 Avg. SP/SF  $                    407
Avg of SP/OLP 90.0%
 Avg. SP/ASMT                    1.742
Post 10/1/15 Appr 22.7%
Post 2015 Construction 2

Glenville continues to be a tighter market than most in town. It has the second lowest average sales price at $1.1 million. The average house in Glenville is 2,732 s.f. and sells for $407/s.f. which also the second lowest after Pemberwick. The sales price to assessment ratio is 1.742 which equates to 22.7% appreciation (1.742/1.42) since 2015. This puts Glenville in the same group with Byram (23.0% appreciation), Cos Cob (23.2% appreciation), and South of the Post Road (23.6 appreciation). Now this appreciation is over more than three years, but it is in the right direction.

You would think that houses would be flying off the shelf in Glenville and days on market at 192 DOM is 10 days better than average for the town, but there was some tough bargaining with the average sales price to original list price ratio being 90.0% only a little better than mid-country. Still it’s doing well, you just have to price it right.

Pemberwick

Section Pemberwick
# Sold 11
 Avg SP  $      700,909
 Avg DOM                   130
 Avg. SP/SF  $               394
Avg of SP/OLP 94.3%
 Avg. SP/ASMT               1.636
Post 2015 Appr 15.2%
Post 2015 Construction 0

If you want a good deal and a nice neighborhood in Greenwich, check out Pemberwick. We only had 11 sales last year due to tight inventory so our DOM was an impressive 130 days, the second lowest in town. You also had a sales price to list price percentage at 94.3%.

Pemberwick’s price per square foot is the lowest at $394/s.f. Part of this is that we have no new construction in Pemberwick that sold in 2018. The youngest house sold was 2001, followed by 1990 and the other 9 were all built before 1971. The change in the R-6 regulation from multi-family to only duplexes made new development here even more difficult as your land cost can only be divided over 2 units rather than 3 or 4 units.

Byram

Section Byram
# Sold 13
 Avg SP  $  2,369,031
 Avg DOM                  202
 Avg. SP/SF  $              543
Avg of SP/OLP 92.2%
 Avg. SP/ASMT              1.746
Post 10/1/15 Appr 23.0%
Post 2015 Construction 0

In mid-2018, Byram had the highest average sales price as 207 Byram Shore Road sold for $17 million after 1,728 days on the market. At the end of the year, 13 houses had sold and if you exclude the four sales on Byram Shore Road, the next highest price was $760,000. Once again, we’ve seen no sales in Byram of recent construction. The youngest house sold was built in 1978 and the oldest at 37 Byram Shore Road goes back to 1690.

The blend of high-end waterfront and the good values in Byram north of I-95 leads to blended statistics. You would think that if one sale took 1,728 the average DOM would be way high, but most of the sales north of I-95 went to contract in 40 days or less, so we end up with the town-wide average of 202 days on market.

North Mianus

Section North Mianus
# Sold 10
 Avg SP  $      1,651,500
 Avg DOM                      116
 Avg. SP/SF  $                  482
Avg of SP/OLP 91.7%
 Avg. SP/ASMT                  1.881
Post 10/1/15 Appr 32.5%
Post 2015 Construction 2

North Mianus has only a handful of sales, well OK two handfuls, with 10 sales, but four of them are 21st Century construction. The area is rapidly evolving and my client bought the highest priced house at $3.5M. It’s a beautiful house that borders Hillcrest Park without the higher cost there and should continue to appreciate as new construction in this area meets the needs of many successful younger families that are moving to Greenwich.

Cos Cob

Section Cos Cob
# Sold 75
 Avg SP  $  1,507,771
 Avg DOM                  168
 Avg. SP/SF  $              490
Avg of SP/OLP 92.6%
 Avg. SP/ASMT              1.749
Post 10/1/15 Appr 23.2%
Post 2015 Construction 11

Cos Cob was a hot area in 2018. We had 75 sales up 17 from 2017. We also sold 11 houses built after our last revaluation. This is the most in any area of town, which is truly remarkable when you consider that geographically, Cos Cob is not that big a place. Days on market was good at 168 days compared to the 202 townwide average. The average sales price of $1.51 million was up $165,000 over 2017 and the sales price to original list price ratio was also the second highest at 92.6%.

Much of this is driven by $490/s.f. average, which is still a bargain compared to Old Greenwich and Riverside which are both over $600/s.f. The post 2015 appreciation could actually be a little better since it is biased upward by all of the new construction. Overall Cos Cob is a good place to invest.

Riverside

Section Riverside
# Sold 101
 Avg SP  $                2,426,776
 Avg DOM                                 181
 Avg. SP/SF  $                            603
Avg of SP/OLP 91.5%
 Avg. SP/ASMT                             1.536
Post 2015 Appr 8.2%
Post 2015 Construction 11

As anyone who has driven around Riverside has seen new construction is booming. I sold 151 Lockwood Road to the first buyer that saw it right after the first open house. He was developer waiting at the door when the clocked ticked over to 1:30 and the open house was over. It had been on the market less than 24 hours. Now, there are no easy sales in Greenwich anymore, so we had a hectic week of reviewing Planning & Zone regs, attorney negotiations and other issues, but the developer are looking in Riverside.

The surprising thing is that even with all the new construction, the total post-2015 appreciation is only 8.2%. A bunch of houses in Riverside, particularly in the R-7 zone sold for less than their FMV assessment. Many of these houses sold in the $800,000 to $1,000,000 range where sales went up because we had more inventory for once. It could be that these folks were particularly motivated sellers or it may be that prices just got to high. Having said that we had 101 sales up 7 sales from 2017.

Old Greenwich

Section Old Greenwich
# Sold 84
 Avg SP  $        2,185,546
 Avg DOM                         178
 Avg. SP/SF  $                    618
Avg of SP/OLP 91.5%
 Avg. SP/ASMT                     1.650
Post 2015 Appr 16.2%
Post 2015 Construction 7

On the east side of town Old Greenwich has the “prize” for highest average price per square foot at $618/s.f. Having said that its still down from last year’s amazing $734/s.f. People really like to live in Old Greenwich (and Riverside). I have a client right now that needs to live in the Old Greenwich school district, where the average sales price is even higher average within Old Greenwich as whole. Her budget limits her to $1.5 million and we  have less than a handful of options and they all need substantial work.

You can see the demand from the 178 days on market and average sales price of $2.19 million in an area without a one-acre zone. Once again this average price is down as we got more inventory below this average and those lower priced houses sold quickly. We also had good new construction with 7 spec houses selling, though Riverside had even more. Properly priced houses sell quickly in Old Greenwich.

Summary

Greenwich’s low taxes and the BET’s decision not to raise taxes this fiscal year clearly were a major plus for Greenwich housing sales they were up in 2018, when most of the surrounding areas were down. Byram, Cos Cob and North Mianus were all up. Old Greenwich, Riverside and South of the Post Road also saw sales increases, but it was a more nuanced story. Backcountry also has some things that are heartening with sales up albeit only one house, but this at a time when we had significant weakness in the $5 -10M market.

South of the Parkway/Mid-Country appears to have taken the major impact of the tax law changes in Washington and the uncertainty as to what is going to happen in Hartford. What did sell however was actually up slightly in price.

I’ve had several inquiries about people looking to sell their house in the spring market and if we can get Washington back to work it should be a decent spring market. Our last two months of 2018, we saw sales go up. Once again it should be an interesting, nuanced and complicated year and a good Realtor will make a significant difference.