2020 – A Very Good Year for Greenwich Condo Sales

Like the Greenwich single-family home market, 2020 was a very good year for the condo market. Our unit sales were up 51% to 220 sales in 2020 compared to only 159 sales in 2019. Now 2019 was a bad year all around. Sales in 2019 were down 12% from 2018’s 181 sales. Even better than our condo sales number was our 2020 condo sales volume. Sales dollars in 2020 were up 51% compared to 2019’s sales volume of $217,830,079 dollars. If you look at our condo sales in 2018, you see a more average year with 181 sales, even so our 2020 sales at 220 sales were up 22% over this “average” year.

201820192018  vs 20192020  2019 vs 2020
 # Sold$ Sold# Sold$ Sold% ch # sold% ch $ sold# Sold$ Sold% ch # sold% ch $ sold
Jan11$8,901,50012$15,251,5009%71%13$13,191,5008%-14%
Feb9$6,917,7759$9,013,2500%30%13$15,503,00044%72%
Mar11$8,316,90015$10,367,50036%25%15$8,335,4000%-20%
Apr18$19,492,00017$16,954,500-6%-13%11$10,979,500-35%-35%
May13$17,610,00012$9,492,500-8%-46%11$5,729,280-8%-40%
Jun22$23,365,50017$16,105,625-23%-31%16$13,503,750-6%-16%
Jul18$11,953,07717$11,980,500-6%0%17$19,745,0000%65%
Aug22$14,767,0447$6,101,000-68%-59%26$26,990,500271%342%
Sep6$6,630,00012$13,032,250100%97%19$17,960,52458%38%
Oct14$17,843,00013$12,276,500-7%-31%31$26,116,000138%113%
Nov14$15,255,00013$11,315,500-7%-26%17$12,469,00031%10%
Dec23$24,066,00015$11,984,000-35%-50%31$47,306,625107%295%
 Total181$175,117,796159$143,874,625-12%-18%220$217,830,07938%51%

Our sales by month show just how remarkable 2020 was. Our 38% increase in annual sales occurred in just the last five months of the year. We did better in January and February 2020. March was even. April, May and June actually saw sales declines in sales below the same months in an already poor 2019.  Then came the five months of August to December 2020, where sales were 107% higher than in 2019.

Curiously, we had started the year out pretty well with condo sales up in January and February, then came March and sales were flat. April, May and June saw a sales decline over an already poor 2019. We got back to even in July and then the boom started.

We also saw a jump in prices in 2020, though a recovery might have been a better word. Our average condo sales price in 2020 was $990,136 up 9.4% over 2019 when we had dropped to $904,872. However, when you compare 2020’s average sales price to the average in 2018, we were up only 2.3%,

This average illustrates another factor in the condo market, which is that it provides some of our most affordable houses. In 2020 the average house sold for $2.67 million compared to $990K for the average condo. In 2020, condos (which for purposes of this report include the handful of co-ops associations that we have in Greenwich) represent about 26% of our houses sales (220 condos/861 houses). This is down from 2019 and 2018 when condo sales were about 30% of house sales both years. So, in 2020 we saw more people buy condos in Greenwich, but the increase in single-family home sales was even greater. People wanted out of New York City, but most wanted a yard and not a shared hallway and elevator, which they already had in NYC. We do have lots of townhouses and other condos without shared spaces and those were particularly desirable in a pandemic.

Condos sales are concentrated at the lower end. Sixty percent of our condo sales are concentrated under $800,000 even though only represent about 40% of our inventory. That wasn’t true in December, where we saw lots of sales over $2 million. These high-end condo sales represented 32% of December sales compared to only 13% for all of 2020. Many of these high-end sales are units in new developments, where both owners and developers wanted to book the sales before year-end.

Our condo market was very competitive at most price ranges. Under 6 months of supply is the traditional dividing line between a pro-seller and pro-buyer market. Under $800,000 we have only about 3.5 months of supply which is a hot market and from $600 – 800K it is getting even hotter as shown by months of supply with contracts included and December sales annualized. When these bars drop in a steady line, the market is only getting hotter.

Normally, months of supply market-wide is an increasing curve from the lowest price range to the highest price range, but that’s not the case in January. Our most pro-buyer market is from $1.5 – 2.0 million where we have 13.2 months of supply. If you go up to the next price range, we only have 4.7 months of supply from $2 – 3 million. This is partly real and partly the law of small numbers. Right now, we have 11 listings between $1.5 and 2.0 million and only 7 listings between $2 and 3 million dollars. Switch a couple of listing from under $2 million to over $2 million and this dramatic market demand difference shrinks a lot.

What you do want to look at is the market wide condo/co-op months of supply which is a tight 4.9 months of supply, then a slightly tighter 4.7 months of supply when you add in contracts and an amazingly tight 2.9 months of supply when you annualize December 2020 sales.  

Our contracts indicate that we will see a bunch of sales in the $600,000 – 800,000 in the next few weeks. Unless we get a lot more inventory in the next few weeks, this market becomes combat-buying. The victors will be the buyers that enter the process fully prepared.

A Condo Search Strategy

What is a buyer to do? A couple of hopefully helpful thoughts. Try to figure out what neighborhoods you don’t want to live in. A good deal on a nice house, in neighborhood you don’t like, is not a good deal. Open houses are great for this. You can check out the area as well the house. This also saves you time going forward, because you don’t have to look at the houses that are in the wrong neighborhood. Also, when you have a longer time horizon, you can attend open houses looking for features you like and don’t like in a house.

One fun thing to do after seeing a house is write down what you think the house will sell for and then when it does close, check and see how you did. This way when you do find your dream house, you’ll know whether it is properly priced.

In this hot market, with the likelihood of rising interest rates, you may still be willing to wait for the right house to be listed, but be prepared to move quickly. This can make all the difference between winning and losing a bidding war. You can check with your stockbroker about the process and time to cash in stocks if need them for a downpayment. You should talk with your banker and go ahead and get pre-approved. Once you think you will be making an offer in the next 60 days, get underwritten pre-approved so the only thing the bank will need to do is an appraisal.

If you are seller, you want to list your condo at the worst time of the year, the middle of winter, i.e., now. It’s carpe emptor, seize the buyers when they are there. I’ve been involved in three bidding contests so far in January and the one winner in everyone of them was the seller.

Stay tuned, it’s likely to get even more interesting.

Chart, bar chart

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Our biggest month by far for sales was December as people wanted to close before year-end. The election also had an effect as November was slower than either October or December.

Covid Increases Sales by $1 Billion in Greenwich, but Some Neighborhoods See Little Change

In Greenwich’s Hottest Sales Year Why are Some Neighborhood Stats Down?

Covid has had distinctly different effect on neighborhoods in town. It was very much the Goldilocks effect. You didn’t want lots that were too small, but you didn’t want them too far from town. And, while 2020 was amazing year for Greenwich real estate, it was really only an amazing for five months. The first seven months were up and down but averaged out to an average year. Several factors came together in the last five months to make the period from August to December a really incredible period.

Neighborhood# SoldSum of Sold PriceDOMAverage of Sold PriceAverage of List Price/SqFtAverage of Sold Price/SqFtAverage of SP/ASMTAverage of SP/OLP
Banksville5$4,382,500 48$876,500$390$379    1.42897.2%
Byram16$13,485,000169$842,813$453$4331.94493.3%
Cos Cob84$116,042,250204$1,381,455$459$4421.51892.6%
Glenville37$43,902,575142$1,186,556$463$4451.67193.8%
North Mianus13$22,723,450105$1,747,958$524$5131.59996.0%
North Parkway102$300,697,949277$2,948,019$488$4601.33987.5%
Old Greenwich128$299,579,631137$2,340,466$654$6301.62994.2%
Pemberwick9$7,512,000161$834,667$426$4112.16795.0%
Riverside133$345,931,079152$2,600,986$666$6221.50693.2%
South of Post Road84$328,530,352211$3,911,076$784$7211.67490.6%
South Parkway249$816,260,716254$3,278,155$577$5481.44190.2%
         
Grand Total861$2,300,247,502205$2,671,600$589$5571.52691.5%

Townwide, we sold 2.3 billion dollars’ worth of single-family homes in Greenwich in 2020. This was up over a billion dollars or 84%. You can see how these sales were Covid driven as two areas that did particularly well were the four-acre zone North of the Parkway and the two-acre zone in the South of the Parkway neighborhood. The latter was the Goldilocks zone, having larger lots for plenty of social distance seen and being closer to town than the even larger lots north of the Merritt Parkway. Let’s take a look at the neighborhoods and see how each one did in 2020

              South of the Parkway – The 2020 winner, mostly

We had a total of 240 single-family home sales South of the Parkway in 2020. This is up an amazing 120 units from last year or 93%. The total value of houses sold in that neighborhood was $435 million. This was up 114% over 2019.

Now you would think that when sales go up almost 100% that prices would also take a jump and they did but it was more like a small hop. The average sold price per square foot went up 3.2% and the sales price to the assessment ratio went up 2%. The average price actually did go up 11%, but as often happens in Greenwich the jumps in the average and medians is more due to the fact that we had more high-end sales last year pushing these averages up. Townwide sales over $3,000,000 are up 100% last year. While mid-country was where the action was this year, the sales price/sf only went up 2.0%. Lots of folks that were thinking about moving provided enough inventory for 120 more sales.

              Cos Cob

Coming in second place for the largest percentage increase in sales was Cos Cob. This neighborhood checked a lot of the boxes that young families fleeing high-density NYC were looking for. Prices were more reasonable there, than in the two-acre zone in mid-country. Cos Cob also has a variety of lot sizes, 1/6-acre, 1/4-acre, 1-acre and 2-acre zones, so something for everyone.

Another reason that Cos Cob did so well this year is that it had further to come. In 2019, Cos Cob and Riverside got hammered as the SALT limitations on property tax deductions took a big bite out of sales. In 2019, we only had 48 sales in Cos Cob compared to 75 sales in 2018. So, this year’s second place finish is more a Superball bounce. Sales went from 75 to 36 to 84 in 2018, 2019 and 2020 respectively. Having said that sales are up over 2018 which was a good year for Cos Cob as families that didn’t want to pay the premium for Old Greenwich and Riverside found Cos Cob a good alternative.

              North of the Parkway

North of the Parkway had another good year for sales. I say another good year, because backcountry had been the weak sister of neighborhoods for almost a decade. Starting in the 4th quarter of 2018, backcountry properties were such a value, that we saw sales increases from 45 houses in 2018 to 59 houses in 2019 or an increase of 31%. Then came 2020 and sales jumped to 102 sales or an additional increase of 73%. In two years, we saw an increase of 126% in houses sold.

This increase was driven by multiple factors with Covid being the most public factor. Above our backcountry average of $2.95M we a big increase in high-end house sales. Below $3 million, low interest rates and good values drove sales. Another factor that didn’t get much attention, except for here in the Sentinel, was the number of Greenwich upsizers. The common wisdom is that lots of folks were selling their houses and moving to Naples or Hilton Head or Charleston and that does happen and has happened for generations.

This year many Greenwich sellers are upsizing and moving to backcountry. They may be coming from a smaller Greenwich house, or a rental, or be desperate to get out of their parent’s home. (I had all three type backcountry buyers this year.)

Backcountry houses continue to be good values. In 2020, the average sales price in backcountry went down $325,275 and the average price per s.f. went down 4.7%. On the other hand, the sales price to assessment ratio went up 1%. Whenever you see indicators pointing in different directions, it’s an indication that there isn’t only one trend going on in the market.

One trend that we are seeing is that houses that have sat on the market in some cases for years are selling. Of our 102 sales 20% had been on the market for more than a year; two for 6 years. The actual percentage is higher as we still see lots of owners taking houses off for the winter and then putting them back on 90 days later. This tactic is used to reset the Greenwich MLS days on market back to zero so houses that had been on and off the market for years looked like a new listing. Also, big yards are easier to sell on sunny days when they are covered with grass and bordered by flowers rather than snow and dead bushes.

Today, most buyers get their days on market information from the public websites who don’t use Greenwich MLS DOM, but their own DOW or days on their website. We have also seen a bunch of winters with little or no snow, particularly, this winter, so this year winter buys allow for spring renovations and weekends all summer.

              South of the Post Road

This is an interesting area. It runs from Chickahominy to Mead Point and from Milbrook to Belle Haven. It’s a real mix, but sales were up 71% in that mixture of neighborhoods. Total dollar volume was up 102% to $329 million. When the percentage jump in dollar volume is greater than the jump in percentage number of sales, it is a sign of stronger high-end sales.

Days on market also dropped by a month and half, while the sales price to original list price went up from 88% to 90.6%. Both are signs of a tightening market. If you are looking to buy in this area. For the value hunters you have 41 houses, but none are under $1 million. At the high-end you have 8 choices over $10 million, but this is down as we had 8 sales in 2020 over $10 million plus one under contract for $12 million.

              Riverside vs Old Greenwich

In the continuing battle of angels on a head of a pin as to whether Old Greenwich is better than Riverside; Riverside has made a stunning comeback. Last year, Old Greenwich wiped the floor with Riverside as OG sales went up, while Riverside had the second biggest sales decline of any neighborhood after Cos Cob. In this case, SALT caused the wounds as Riverside sales dropped to only 78 sales down 23% from 2018.

This year Riverside sales jumped up to 133 sales an increase of 70.5%  compared to Old Greenwich’s below town-wide average of 33%. Old Greenwich had 128 sales after having 96 last year. Riverside also saw its average price jump by 30.2% to $2.60 million while Old Greenwich’s average sale price was $2,340,466 up $27 from 2019 or a .001% increase.

Not to worry Old Greenwichites, your average sales price to assessment ratio was up 5.4% from last year, while those folks in Riverside actually saw a 4.7% decrease in their average sales price to assessment ratio. When someone from Old Greenwich points out this 10.1% difference, Riversideans should counter with the fact that their average sold price/sf was up 13.5% while the OG SP/sf was down 1.4% or 14.9% better.

So, what does this mean? Just that we have a may have a very busy market, that is undergoing a paradigm shift. Last year we had a lot of shadow inventory, so we didn’t see an inventory shortage in 2020 in most areas of town including Old Greenwich and Riverside. As a result, we are seeing a mix of numbers some up a little, some down a little, but it is the mix of the sales that is causing this momentary “confusion” in the directions of prices. We are certainly not seeing any confusion in the amount of demand.

              Glenville, Byram & Pemberwick

These three neighborhoods starkly illustrate the effect of Covid. You can drive from Glenville to Byram in 5 minutes (1 minute if starting on the Merritt counts). Sales in Glenville were up 43% this year, but this is over a poor 2019 and is also below our town-wide average of a 64% increase in sales. Glenville however looks pretty good when compared to Pemberwick where sales were down 18%, which means they dropped from 11 sales in 2019 to 9 sales in 2020. Part of this is that Covid refugees what more space and part of it is just data randomness. In Byram, sales went from 14 to 16 or an increase of 14%. If you combine Byram and Pemberwick sales were flat.

You should actually take these numbers with an even larger grain of salt as several agents try to take advantage of higher price per sf in other neighborhoods. For example, a half dozen listings around Pemberwick are claiming to be in Glenville and several houses on Byram Shore Drive are using the South of the Post Road neighborhood.

Bottomline, houses under $800,000 sell quickly in Greenwich if they are price properly.

              Summary

Land, square footage, mini-country clubs are all in demand. However, we are still waiting to see a significant uptick in prices. If you slice and dice the data finely enough you can find groups of houses that saw double digit increases, but it will only be when we see the median, average, price/sf and sales price to assessment ratio all point up that we are seeing a general rising price trend.

We may well see this in 2021. Our inventory hit an all-time low at the beginning of the year falling to 287 houses. We are not yet seeing any surge of new listings this year. Assuming we used up most of our shadow inventory of folks that wanted to move Greenwich inventory could stay tight all year.

If the paradigm shifts back to historic norms of people preferring large houses, larger lots and more amenities continues in 2021, prices could spurt quickly

On the other hand, we have world of big issues, so stay tuned.

OVER 1,000 TRANSCATIONS – ONE AMAZING YEAR IN GREENWICH REAL ESTATE

The 2020 Year End Real Estate Report

by Mark Pruner

One thousand and three transactions, that’s what we did last year. These 1003 transactions consisted of 861 sales up 334 houses from 2019 or 63% and 142 contracts up 70 houses or almost a 100% increase. And, it wasn’t like these sales and contracts were concentrated in any particular price range. Literally, every price range, except our lowest price range was up. Even, the fact that sales under $600,000 were down, may indicate a stronger market as houses were priced out of our lowest price range and pushed over $600,000.

As of 1/1/21 (GMLS)InventoryContractsLast Mo. SoldsLast Mo Solds+ Contracts YTD Solds YTD+ ContractsMos SupplyMos w/ ContractsLast Mo. Annlzd
< $600K121317190.70.71.0
$600-$800K12871546543.13.01.7
$800K-$1M12681455612.62.71.5
$1-$1.5M362814421491772.92.72.6
$1.5-$2M191916351541731.51.51.2
$2-$3M483519541922273.02.92.5
$3-$4M381910291231423.73.63.8
$4-$5M241141545566.45.86.0
$5-6.5M2736940438.18.54.5
$6.5-$10M459413253421.617.911.3
> $10M25224151720.019.912.5
          
TOTAL2871429123386110034.03.93.2

Our biggest winners this year compared to last are sales and contracts from $3 million all the way up to $40 million. In all 5 of these high-end price categories, transactions were up by over 100%. By numbers, we saw an increase of 155 more houses sold or under contract at our high-end. The biggest winner for the year was the $3 – 4 million price range where sales were up 132% from 53 sales last year to 123 sales this year.

In our highest price range, over $10 million, sales were up 114% from 7 to 15 this year. Now when you have 861 sales in a year, 15 sales may not sound like that much, but those 15 sales totaled $217,400,000. If you start with our least expensive sale and go up, you need 224 sales to total the $217 million represented by these 15 years. Our over $10 million market was actually better than that. These are the Greenwich MLS sales numbers, and they don’t include the $42 million sale on Indian Head Road in Riverside, nor does it yet include the John Street contract for Tommy Hilfiger’s house listed at $47,500,000. If you include just those two sales, you’d be looking at over $300,000,000 of ultra-high-end sales (assuming the John Street house gets close to list.)

              $2.3 billion in total home sales

In total for 2020 sales, we had $2.3 billion in single family home sales in 2020. This is in one year, in a town of only 62,000 people. Back in 2019, our total sales volume was only $1.25 billion meaning our total volume was up 84%, most of which happened in the second half of the year.

What is really remarkable is that 2020’s $2.3 billion in public sales exceeds our previous record for sales which was set 16 years ago in 2004. That year we sold 978 houses for a total of $2.17 billion dollars, and that number includes both public and private sales.

              A remarkable 2nd Half and 4th quarter

The 4th quarter saw sales increase by 143% over the 4th quarter of 2019. Total sales volume increased even more from $251 million in sales in the 4th quarter of 2019 to $804 million in sales or an increase of 221%. Even in this remarkable year, our 4th quarter was head and shoulders above the prior quarters for percent increase, which bodes well for the first quarter of 2021.

                            Quarterly Sales Numbers

While the first quarter was better than 2019, it was much like our 10-year average. In the second quarter, when Covid had its greatest negative impact, April was slow as we went into lockdown followed by a better May and June as we saw the beginning of an exodus of families from New York City. Our second quarter while better than the poor Q2 2019 was still a little below our 10-year Q2 average. Then came the third quarter and sales took off. July was better than average and August and September were our highest months of the year.

2020 QuartersNo. of SalesSales VolumeSales DifferenceVolume Difference% Sales Diff% Volume Diff
Qtr1103$219,985,16629$49,607,11839.2%29.1%
Qtr2165$443,697,56313$62,933,7128.6%16.5%
Qtr3311$833,006,153127$385,327,26369.0%86.1%
Qtr4282$803,558,620166$552,962,154143.1%220.7%
Grand Total861$2,300,247,502335$1,050,830,24763.7%84.1%

What was amazing about the 4th quarter was that sales just stayed high. Normally the 4th quarter has about 21% of our sales as things slow down for the holidays; that’s not what happened in 2020. We got 3 consecutive months of sales numbers in the 90’s. The 4th quarter of 2020 represented 35% of sales. The 4th quarter sales numbers were 282 house sales, up 166 houses from 2019 or 143%, and up 147 sales from our 10-year average.

                            High-End Sales in 2020

We saw a big jump in the average sales price from $2.14 million in the 1st quarter to $2.85 million in the 4th quarter or a 33% price increase. This price increase was driven by the increase in the high-end sales in Greenwich that started in June. The June increase was expected as many sellers wanted to avoid the Gold Coast tax; the 1% increase in the state conveyance tax for sales over $2.5 million that kicked in on July 1st. What was surprising was the continuing increase in high-end thereafter. While these high-end sales increase are certainly encouraged by Covid; it also seems to be tied to higher levels of violence and shootings in New York City.

              Average Greenwich sales price up 12.4% in 2020

In 2020, our average sales price was $2.67 million up 12.4% from our 2019 average sales price of $2.38 million. The median sales price was $2.08 million up 11.4% from 2019’s $1.87 million median. Our average sales price peaked at $2.97 million in 2007. We still have a way to go get back to our 2007 peak, but we are getting there with double digit appreciation. (BTW: All this historical data is from my brother Russ, who has a great website with historical data at russellpruner.com.)

Now, as I constantly write, most of the change in both the average and the median sales price is not due to a general appreciation of all houses, but a change in the mix of what is selling. If you double the number of sales over $3 million you will get a big jump in our median and average sales price.

A better way to get a feel of how your house value is doing is to look at the changes in the sales price/s.f. and the sales price to the assessment ratio. Our sales price per square foot is up 4.1% over 2019. Our sales price to the tax assessor’s assessment is up 3.1% over last year’s SP/Assmt ratio. So, by this measure, house values are up 3 – 4% in Greenwich for 2020, but if you are talking to someone from Darien you can let them know our average price is up 12.4%.

              Inventory and Months of Supply Way Down

The one stat that probably should get more attention right now is inventory, because it is at record lows. Our 287 house listings are down 145 listings from last year or a drop of 34%. For the last several months our inventory has been down about 25% from last year, but it held steady at that level, meaning that new listings were coming on about as fast as they were going off.

In December, as usually happens during the holidays, new listings slowed down, while sales stayed high with 91 sales compared to a 10-year average of 54 December sales. The result was both inventory and contracts shrank. At the beginning of December, we had 378 listings and 171 contracts, by January 1st we were down to 287 listings and 142 contracts. The drop in inventory was not solely due to sales, we had 17 listings expire unsold at year end on December 31st. Regardless of the cause, 287 home listings is a historic low for inventory. 

If you compare the months of supply at the beginning of 2020 with months of supply at the beginning of 2021, the difference is startling. Last year from $4 – 5 million we had 26 months of supply. This year we have 3.7 months of supply. That dramatic drop is true across all price ranges. For the entire market we went from 9.8 months of supply at the beginning of 2020 to only 4.0 months supply at the beginning of 2021.

              We Need a Lot More Inventory

I was hoping that a lot of sellers were waiting for the new year to put their house on the market, but that is not what we are seeing so far. In the first few days of 2021 we have seen only a handful of new listings. This lack of inventory is the biggest present threat to 2021 being a good sales year.

 If you are thinking of selling your house call me or take advantage of the fact that everyone in Greenwich has zero degrees of separation from a Realtor. With over 1,100 dues paying GMLS members, you probably have a neighbor, a tennis buddy, a club member, a carpool friend or a fellow school parent that is an agent. Call me, call them, please do it this weekend.

The ideal time to put a listing on the market is when supply is low, and demand is high. This is exactly what we have now.

              What Will Happen to Greenwich Real Estate in 2021?

How will this year play out? The one thing you can be sure of is that no one knows. Covid cases are reaching record highs across the U.S., but Connecticut has been one of the most successfully states in getting people vaccinated. We have a hot market, but low inventory. It is a great time to list your property, but January is not known for a lot of listings.

In 2020 we had lots of people who had been waiting for years to list their properties for sale, do we still have that number of people or has our shadow inventory mostly disappeared? Prices in New York City are dropping, and people are getting the vaccines, will the NYC real estate market return to normal? Federal relief bills are authorizing record amounts to stimulate the economy, leading to record amounts of debt, what happens when interest rates tick up? I could go on and on with countervailing factors, but there is no way of knowing which factor will outweigh their countervailing factor.

Stay tuned, it’s going to be a really interesting first quarter.

CNN – Greenwich Real Estate on Fire (MP quoted) – Conversations Matter (MP Interview)

CNN has a good story about just how hot the Greenwich real estate market is. You can read it here, In Greenwich, Connecticut, money is no object. Real estate there is on fire. Anna Bahney did an excellent job of summarizing just how busy the market has gotten. The story features 22 Cherry Tree Lane, Patty Ekvall and my listing on Long Island Sound for $7.25 million. I get quoted several times on why people are moving and whose looking in Greenwich. When you get mentioned in a CNN article your wife’s cousin from Colorado sends you an email. 🙂

Candace Adams, Berkshire Hathaway – New England’s president has an interest blog at Conversations Matters. She interviewed me last week, about what it’s like being a Realtor in the Covid era, how I got to be a Realtor and how I’ve been working to redefine the Greenwich real estate market. You can hear the podcast here or subscribe via the podcast app in your phone.

Greenwich Home Sales Set a New Record

But For How Much Longer

by Mark Pruner

 Berkshire Hathaway Greenwich, CT

The human mind tends to get bored with the same thing over and over, even when it’s another superlative, which is my way of saying that we set another record for sales in November 2020. November 2020’s 91 sales did not beat last year by just a little bit; it was more than twice November 2019’s 40 sales. These 91 sales are also more than our 10-year average sales in our busiest month of June, which only averages 86 sales. Or course, our sales in August, September and October 2020 exceed our June average as well.

The question is can December do the same thing and the answer is very likely, yes! But this may not be the answer for January, but more about that later. Right now, we have 171 contracts waiting to close. The odds are that December will be better than November as many of these buyers and sellers are tax motivated and want to wrap it up before year-end. Over the last 10 years we’ve had 38% more sales in December than in November. We also have more sales in January than in February as today’s sellers want to put off paying capital gains taxes until 2022. Right now, I have two clients who are pushing me for a sale this year.

In bad years, life-changing moments drive the market: births, marriages, divorces, and deaths. Covid and its associated changes are causing some changes in these life-changing moments; more deaths and divorce pressure, and some delayed marriages (Though my niece got married in our backyard last month. The groom’s father got ordained as a minister, so that they could keep the number of attendees under the state limit of 10 people.) Supposedly, births are down, but since blackouts lead to increased births, wouldn’t lockdowns do the same things? Regardless, these 2020 life changes in aggregate are not what is driving the number of contracts up 163% and November sales up by 127%.

So, if life changing moments aren’t increasing sales much, what is it? We have multiple factors that have combined with synergistic effect to increase our sales in Greenwich. The desire for young families to have an outdoor space for their kids to play is a major and well publicized factor, but maybe not the majority factor. Low mortgage rates also are driving increased sales nationwide. If we did not have record low mortgage rates, the number of Covid motivated buyers actually buying would be smaller.

Low interest rates don’t account for the fact that our median sales price is up from $1.87 million in 2019 to $2.1 million in 2020. This is an increase of 12.5%, and I would love to tell folks that their $2,000,000 houses last year are worth $2,250,000 this year, but that’s not the case. As usual, and as most reporters don’t focus on, what is driving the change in the median price is not a general price appreciation, but more sales of houses above the median price point pushing the median up.

For 2020 so far, the median sales price/s.f. is up 4.0% and the sales price to assessment ratio is up 2.4%. Both metrics are better measures of overall price appreciation than the change in the average or median price.

Above average-priced sales are up, but what is driving these sales? Part of it is buyers looking for more home amenities, the “mini-country club effect.” Last year many buyers saw a pool as an additional expense that required daily maintenance. In the Covid era, a private pool means summer fun, without having to be part of the crowds at the beaches and clubs, and also a personal sized hockey rink in the winter (well OK maybe not that yet.) People also want room for other adult family members to join them when needed. Buyers also need two, three or even more home offices/remote schooling locations. What was not needed last year is now a requirement for many buyers.

Another factor that has really impacted the very high-end sales are concerns about increased unrest and shootings in New York City. From Jan. 1 through Nov. 29, the NYPD recorded 420 murders, compared with 304 murders during the same period last year. The number of shooting victims in the city has more than doubled. All this is encouraging more sales, and especially sales at the high end.

I’m also seeing a few buyers with houses in the Hamptons who are realizing that the Hamptons are not the ideal place to sit out the Covid era. It’s not an easy commute to New York City, even if you only have to go once a week. School space is limited, and they don’t have a Yale affiliated hospital minutes away like we have at Greenwich Hospital. For Covid motivated buyers, Greenwich looks pretty good.

Lastly, in my experience another major factor is that people in Greenwich are upsizing. For decades, Greenwich people moving up was a major factor in purchases and sales. You bought a house and in five to eight years, you could take the appreciation and buy a bigger house. Post-recession there wasn’t lots of appreciation. The move-up pipeline got clogged and many people fixed up their present houses. This year, we’ve had a Covid roto-rooter clearing out this pipeline of people whether waiting to upsize, downsize or move out of town.

Can we keep this high level of sales up?

            Year to date, we have 940 total sales and contracts. This is up 385 transactions from last year or 70%. Where did those additional 358 homes sales come from? Very little is from new construction as only 4.6% of our inventory was built in the last two years. Much of the rest of the 95% of inventory comes from Greenwich homeowners that wanted to change their present housing situation and felt stuck. The problem is that we are rapidly running through this shadow inventory of homeowners that have been waiting years for this market. You can see that it is shadow inventory coming on, as house prices have not gone up much even with the increased demand and sales.

Once we see the people wanting to move who have actually done so, are we going to get additional inventory? Our present inventory levels of only 378 single family homes listed on the GMLS make this question of more concern. We are down 142 listings from this time last year. We always see inventory drop in November, but usually not this low and not this early.

Our demand has not slackened, transactions were down last week, but only because it was a 3-day work week. On a per diem basis our sales were up last week.

Prices are going up slightly, a nice turn around for backcountry and mid-country and other areas of town. Increased prices do lead to increased inventory. This summer even some of our wealthiest families put their houses on the market as summer rentals at prices we hadn’t seen before, which led to inventory we hadn’t seen before.

I’m putting a couple of new listings on the market in the coming weeks of December, something I probably wouldn’t have done last year at this time, but “Winter is the New Spring” in this real estate market.

So, if you are thinking about selling your house in the next 12 months, now may actually be an excellent time to do so. Check out this week’s sales and new listings that Cesar Rabellino does for the Real Estate Dashboard: 54 sales and only 28 new listings. Inventory is down a lot this month and sales and contract signings continue to be just as hot as they have been for the last five and a half months. It’s worth a call to your Realtor.

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.