Greenwich, CT Home Sales Up for all 2018 – Government Shutdown Slows Contracts in December

 

Greenwich single family home sales were up by 26 homes in 2018 compared to 2017. This a 4.4% rise in sales, which most years would not be that remarkable, but in the new tax environment it is quite remarkable. The early reports are that sales have dropped in New York City, Westchester County and other parts of Fairfield County so even a small increase in sale stands outs.

Two price ranges are driving this increase in sales with one price range being really remarkable. Sales from $800,000 to $1,000,000 are up 59% from last year, and this was driven by what in most years would be considered bad news, an increase in inventory. The Tax Cut and Jobs Act passed by the U.S Congress at the end of 2017 eliminated the deductibility of state and local taxes over $10,000.

The result was that many people who had been thinking about moving to a warmer client in the next couple of years decided to take their appreciation accumulated over decades and move in 2018. The great thing about this for Greenwich sales is that for once there was plenty of inventory from $800 – $1,000,000 and buyers bought, snapping up 73 homes in increase of 27 houses from 2017.

The other price range that saw a jump in sales was from $2 – 4 million where sales were up 16 houses to 171 houses. This price range seems to have benefitted from early downsizers who were still employed and hence tied to the NYC metro area, deciding to relocate to Greenwich where property taxes are often a third of what they are in some Westchester towns. The Town of Greenwich also contributed by freezing the property tax rate in 2018 at the already low 2017 rates.

The no property tax increase in Greenwich however was not enough to entice buyers in the $5 – 10 million dollar range where sales dropped by 13 houses to 39 houses. Curiously, at the ultra-high-end sales over $10 million went up by 25% from 8 houses to 10 houses in 2018. We also have 3 contracts on listings over $10 million, two from last year and one that went to pending contract this week. Overall, the tax changes seem to have been a plus for Greenwich.

In many ways, the more things change, the more they stay the same. As usual December sales did better than November with 50 sales up from 44 November sales. Also, as happens nearly every year, inventory took a big drop on January 1st as over 80 single family home listings expired on the last day of 2018. The result of that is that months of supply took a big move to the seller’s side. The exemplar for this is the price range from $6.5 – 10 million where we went from 56 months of supply at the beginning of December 2018 to 35 months of supply on January 4, 2019 (when I ran the inventory numbers).

1/4/19 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 2 1 2 3 15 16 1.6 1.7 1.0
$600-$800K 12 3 1 4 44 47 3.3 3.4 12.0
$800K-$1M 15 4 8 12 73 77 2.5 2.6 1.9
$1-$1.5M 40 7 17 24 115 122 4.2 4.4 2.4
$1.5-$2M 59 6 3 9 95 101 7.5 7.9 19.7
$2-$3M 97 15 6 21 106 121 11.0 10.8 16.2
$3-$4M 68 8 4 12 65 73 12.6 12.6 17.0
$4-$5M 51 0 3 3 31 31 19.7 22.2 17.0
$5-6.5M 49 4 1 5 27 31 21.8 21.3 49.0
$6.5-$10M 35 1 3 4 12 13 35.0 36.3 11.7
> $10M 27 2 2 4 10 12 32.4 30.4 13.5
                   
TOTAL 455 51 50 101 593 644 9.2 9.5 9.1

The good news for the 35 listings still on the market in the $5 – 6.5 million is that we had 3 sales in December compared to only 9 sales in the first 11 months of 2018. So, more sales in December and less listings make for an almost 2 year drop in months of supply in this price range in only one month. All this means that you should always take January month of supply numbers with a large grain of salt as the sudden one-day drop in inventory from 12/31/18 to 1/1/19 means that December MoS will almost always be significantly lower than November MoS in most of the price ranges.

Overall, our inventory is about the same as last year with 455 listings as of the beginning of the year up only 4 listings from last year. Contracts however are down noticeably in most price ranges going from a total of 69 contracts last year to only 51 contracts at the end of 2018.

There is nothing like a government shutdown to make people take a step back and wait before signing on the dotted line. When will Washington realize that their lack of ability to work together is a major impediment to having a better economy?

 

As to the macro numbers, our average sales price in 2018 was $2,396,448 compared to $2,583,951 in 2017. This $188,000 drop in the average sales price in Greenwich is mathematically accurate, but it doesn’t mean that your house fell in value. This price drop can mostly be attributed to the increase in sales under $1,000,000 and the decrease in sales from $5 – 10 million. The median sales price which minimizes changes in our very high-end sales went from $1,800,000 for all of 2017 to $1,765,000 in 2018 or a drop of only $35,000. Overall, most houses in Greenwich went up a smidgen in value, but this is hidden by change in what prices ranges are selling.

If Washington gets its act together, given low unemployment and finally a rise in real wages, 2019 could be pretty good year with actual increases in average prices.

How Excel Spreadsheets are Hurting Real Estate

One of the problems with being a real estate agent in Greenwich is that we have too many financial people. Now I love people in the financial industry, most of my seller and buyers are involved with it in one way or another. The problem is that they often turn to a spreadsheet to solve their problems. I personally love spreadsheets. There is a saying, however, that that hard numbers drive out soft qualities and there are few things more qualitative than buying your home. So, this week I thought I’d like at some of the non-financial reasons to own your own home.

Your Home

There is something deeply comforting about owning your own home. It’s yours; it’s a place of refuge from all of the stress and trouble of daily life. It’s the place where your life is truly yours and your family’s. Now a long-term rental can start to feel like that, but it comes with much less control of your home.

                Your community

If you own your own home, you are literally more invested in the community. You need to care about what’s going on in your community, its schools, parks and government. The flip side for some people is that homeownership can make them feel stuck and tied to the community. Overall, though being part of a community is a plus for individuals, families and for the community and you see that every day here in Greenwich. We have thousands of people who volunteer their time to make this a better place to live. Of course, renters can do the same thing and lots of them want to do so, but homeowners really need to do this.

Your life

Owning your own home also gives you more flexibility. Whenever I rented, I rented what I needed for the term of the lease. Homeowners tend to buy houses with extra bedrooms that can accommodate expanding families, or a home office for a new business and that have guests over that actually stay in the guest bedrooms, be they related or friends. We do have starter homes that get too small for expanding families and people can rent a single-family home rather than buying it, but folks who buy tend to move less and they can always expand.

                Your house

One of the great things about owning is that you can do what you want. If you want to paint the ceiling black and have light up constellations no problem. If you want a pool, just do it. You can take out the garden in one area and move it to another area. It’s your house. Feel free to add on a wing for that expanding family. (Expansion is not free, and you’ll need a bunch of permits, but hundreds of folks are doing that right now.)

Your athletics, cars and parties

You can add a basketball goal, pitchers mound or even a tennis court, it’s your house. You also have your own garage rather than a shared garage or no garage. Of course, some houses don’t have garages or enough garage space, but that’s a decision you can make when you buy. You also have more space to entertain both in the house and in the backyard.

And, you can do it your way. One of the cooler features, I’ve seen was a high-end house that had a room off of the living room just for storing tables. The family had lots of folks over for the holidays and never needed to drag the extra tables out of the basement.

Your spaces

Houses come with extra spaces for hobbies, workbenches and storage. You can keep a lifetime of memories in them and you don’t have to move them when the lease expires. Friends of mine are great photographers and they built a custom-designed room for editing, printing and framing. Do you have a bunch of fishing trophies or lots of sports trophies feel free to display them proudly.  (This doesn’t actually work in my family, but that’s a different issue.)

Your pets

One thing we do agree on in our family is that we like dogs that you don’t have to bend over to pet. We’ve had a variety of Bernese Mountain Dogs, Scottish Deerhounds, Newfoundlands and Golden Retrievers. These aren’t exactly apartment dogs.

Pets are a big part of people’s lives and lots of landlords don’t allow pets at all or restrict tenants to one small dog. I have a rental listing at 181 E. Putnam Ave, next to where the crocuses bloom in the spring at the intersection of the Post Road and Maple Ave. By allowing pets, the number of potential tenants expands greatly, because there aren’t a lot of pet friendly rental. (BTW: Thank you to the wonderful town garden clubs that plant the flowers on Crocus Hill. They are my favorite sign of spring each year in Greenwich.)

Bottomline, if you want to figure out if you can afford the house use a spreadsheet, but if you want to know if you will be happy there use your heart.

by Mark Pruner

GreenwichStreets.com

mark@bhhsne.com

December 12, 2018

Election Over: Greenwich Real Estate Sales Up

November 2018 – The New Normal Returns

Single family home sales were up 9 sales over our 10 year average or 25% higher. Our average sale was $2.45 million and our median sales price to original list price was 92%. The price range from $800,000 to $1 million was particularly strong with sales up 5 sales for the month and 21 sales for the year, but may not continue that way.

For much of 2018, the TaxCut and Jobs Act was shaping our market. We saw more inventory at just aboutall levels, more sales at the high end, and fewer sales in a tight bracketbetween $1M and $1.5M. Inventory went up, as people who were retiring andthinking about moving in the next couple of years decided that the first threequarters of 2018 was a good time to list their house.

As of 12/1/18 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 2 3 0 3 12 15 1.8 1.7
$600-$800K 10 5 4 9 43 48 2.6 2.6 2.5
$800K-$1M 19 9 11 20 64 73 3.3 3.3 1.7
$1-$1.5M 49 16 6 22 98 114 5.5 5.4 8.2
$1.5-$2M 67 11 7 18 92 103 8.0 8.1 9.6
$2-$3M 114 13 8 21 99 112 12.7 12.7 14.3
$3-$4M 71 9 6 15 61 70 12.8 12.7 11.8
$4-$5M 54 2 1 3 28 30 21.2 22.5 54.0
$5-6.5M 56 3 1 4 26 29 23.7 24.1 56.0
$6.5-$10M 46 2 0 2 9 11 56.2 52.3
> $10M 32 1 0 1 8 9 44.0 44.4
TOTAL 520 74 44 118 540 614 10.6 10.6 11.8

            Inventory & Sales

Much of the TCJA effects seemed to run its course. As of the beginning of December, our inventory is nearly identical to last year, 520 single family homes versus 518 homes last year. Whereas earlier this year we had more inventory below $1.5 million now inventory below $1.5 million is down 18 houses or 18% compared to last year. This is particularly remarkable since earlier we’d had a big spike in inventory from $1 – 1.5 million, now it actually down 7 listings from last year.

We do have more inventory from $5 – 10 million which is the segment that our governor-elect really needs to worry about as these folks pay lots of taxes.

On the sales side we are up in nearly every price range from $600,000 to $4 million. The one exception is from $1 – 1.5 million where the TJCA caused headaches from earlier this year. We are still down 16 sales for the year, but as mentioned contracts are up in this price range.

As noted in the $5 – 10 million price range where we have 15 more houses in inventory, we also are down 10 sales over last year. More inventory and fewer sales means a jump in months of supply. We are up 3.7 months of supply in the $5 – 6.5 million to 24 months of supply. While that shows a slow market, the real problem is from $6.5 – 10 million where months of supply have increased a very worrisome 33 months to 56 months of supply or 4.7 years of supply.

            $800,000 – $1,000,000 – A sweet spot for sales.

Earlier in the year, we had seen a bump in inventory from $800,000 to $1,000,000, but that was actually good news. Who doesn’t want to buy a house in Greenwich for less than $1,000,000. The numeric answer is 21 more homeowners do. This equates to 49% more sales from $800K – $1M or 43 sales last year and 64 sales this year.

The further good news for Connecticut and Greenwich is that many of these new homeowners were younger families who needed to buy lots of stuff, to fill up their new house after living in a small apartment in NYC. We also had downsizers from Westchester who had the funds to fix up their new homes, something that is less popular among younger families who generally prefer as close to move-in condition as they can get. It’s nice that we could welcome them all to Connecticut.

            $1.0 – 1.5 million – getting better

            As I said earlier in the year, we saw more inventory and fewer sales from $1.0 – $1.5 million, but that has now reversed itself. Inventory in this price range is down 14% and contracts are up 60% over last year. We are still down 14% in sale or 16 fewer houses sold this year compared to last year, but with contracts up 60% we will continue to catch up in this price range.

            The $4 Million Discontinuity

Whether you look at months of supply or year or year sales or several other factors one thing that stands out is the difference in the market above and below $4 million. Below $4 million we have about a year of supply and this continues all the way down to $2 million. Above $4 million we have almost two years of supply and that continues up to $6.5 million. So, we have two distinctly different markets.

Months of supply have two components, sales and inventory, so as we saw sales are about the same for sales above and below $4 million whether in backcountry or OG-R. What is different is the inventory. We have more high-end inventory in backcountry and mid-country and that is what is raising the months of supply for the $4 -5 million range. And, it’s mostly the increase in the $4 – 5 million inventory south of the parkway that is causing this discontinuity.

Figure 1 Sales (Blue), Actives (Green), Contracts (Yellow) $3 – 4 Million

Figure 2Sales (Blue), Actives (Green), Contracts (Yellow) $4 – 5 Million

In total from $3 – 5 million we have 130 listings and 59 of the listings are south of the parkway or 45%. At the same time we have 98 sales through the end of November and only 34% of the sales are south of the parkway. The other standout is Cos Cob where 7 properties priced from $3 – 4 million have sold so far this year and another sale is pending with only one listing presently available for sale. So, more Cos Cob sales from $3 – 4 million along with more mid-country inventory from $4 -5 million explains much of the difference numerically.

Greenwich Real Estate- Chugging Along into a Headwind

October 2018 Greenwich Real Estate Sales

October is the month that the summer tans from a hot July begin to fade just a little more and that’s a little of what we saw in the real estate market. September was a good month for sales, while October 2018 was only so-so. Having said that, there is some good news for just about price range, and some have some really good news.

10/31/18 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 2 3 1 4 12 15 1.7 1.5 2.0
$600-$800K 11 5 2 7 39 44 2.8 2.9 5.5
$800K-$1M 32 12 5 17 53 65 6.0 5.7 6.4
$1-$1.5M 59 12 8 20 91 103 6.5 6.6 7.4
$1.5-$2M 83 14 6 20 84 98 9.9 9.7 13.8
$2-$3M 133 14 4 18 90 104 14.8 14.7 33.3
$3-$4M 88 15 2 17 55 70 16.0 14.5 44.0
$4-$5M 63 3 3 6 27 30 23.3 24.2 21.0
$5-6.5M 56 3 2 5 25 28 22.4 23.0 28.0
$6.5-$10M 50 2 0 2 8 10 62.5 57.5
> $10M 32 1 0 1 8 9 40.0 40.9
                   
TOTAL 609 84 33 117 492 576 12.4 12.2 18.5

$800K – $1M Real Estate Market

On the really good news side, we have the 53 sales from $800,000 to $1,000,000 and an additional 17 contracts waiting to close. This makes a total of 65 homes off the market in a segment where the inventory is only 32 houses. While that’s not lot of inventory in such a busy market, it’s close to double what we had last year at this time when we only had 17 houses.

We have more people than last year who want to sell their houses in this price range. The nice thing for those sellers is that we have plenty of folks that want to buy a home in Greenwich for under $1,000,000. The demand is still outstripping supply as we are down 1.44 months of supply to six months of supply.

            Under $800K

I was reading an article this week about how Las Vegas, one of the hardest hit markets in the recession, is once again a hot market. One of the complaints in the article was that builders were concentrating on luxury end of the market at around $400,000, leaving a shortage of lower end houses. In Greenwich the lowest listed price is $500,000 and we have only 13 houses listed under $800,000. If you are a buyer in this price range, there is an easy solution, buy a condo. WE 61 co-ops and condos listed all prices per square foot that are better than Manhattan prices.  

            The Heart of our Market  –  $1 – 3M+

Nearly half of our inventory, 46%, is from $1,000,000 to $3,000,000. It’s our bread and butter in real estate. This year the butter has sometimes felt a little more like margarine. On the good news side for sellers, inventory from $1.0 – 1.5 million is down 9 to 59 listings or 14%. Also, good news is that we have sold 174 houses priced from $1.5 – 3 million. This is 19 more sales than last sales which is a 12% increase.

The buyer’s side the new tax law hit the sales from $1 – 1.5 million the most with a drop of 12 sales from last year’s 103 sales to just 91 sales this year. For seller’s the big move to Florida may have run its course as inventory is down. The two effects of lower inventory and lower sales cancelled each other out resulting in nearly the same 6.5 months of supply this year as last year.

Once you get above $1.5 million these trends reverse, inventory is up, and sales are up. We had 20 more listing as of the beginning of November in the price range from $1.5 – 3.0 million. We also had 19 more sales in that price range compared to last year. Sellers have it better at the higher part of the price range while buyers have more choices.

            $3 – 5 million

We have 151 houses listed from $3 – 5 million and so far this year we have had 41sales which equates to about 19 months of supply. This is a slight increase in months of supply, but nothing worth wasting another sentence on.

            $5 – 10 million

The interesting price ranges are from $5 – 10 million. This year the $5 – 6.5 million has been on the good side of the market. Months of supply were about the same as $4 – 5 million and some months, like this one, actually saw slight better supply demand than the $4 – 5 million market segment. While that continues to be true, as the year has progressed the segment from $5 – 6.5 million has weakened, so that now sales and contracts have slipped behind where they were last year.

Having said this, this price segment doesn’t come close to being the weak market that we are seeing from $6.5 – 10 million. In that price segment, months of supply is up by three years due to increased inventory and decreased sales. We had no sales in this price range in October and our contracts were down from 5 last year to only 2 as of the end of October.

            Over $10M

This segment had had an outstanding year with sales up significantly from last year and inventory was down 16%. This led to months of supply dropping by 2 years compared to last year. The problem is that months of supply had been 3 year lower earlier this year. Sales have slowed with no sales in October and only one contract pending.  

New Construction in Greenwich, CT 2018

If you think there is a lot of new construction in Greenwich you are right. In areas like central Greenwich, Cos Cob, Old Greenwich and Riverside it seems there is house under construction on every block. At the present time we have 66 houses on the market that have been constructed in July 2016 or later. In that same period we have sold 82 new houses and have 4 presently under contract.

New Construction post 1/1/16– Green Active, Blue Sold, Yellow Under Contract

Now 82 new homes may sound like a lot, but since July 2016, when I last looked at new construction we have sold 1,668 single family homes so the new construction market represents only 4.9% of our sales.

These are spec homes built by contractors rather than teardowns bought by individuals who then built a new home in most cases. (You do get the occasionally get privately built homes back on the market in a year or two if the individual is transferred or getting a divorce.)

These spec homes are also at the upper end of the market. Of the 82 sales of new homes, the median price was $3.4 million while the median for all home sales in 2018 has been around $1.85M. A fifth of the new construction sold for $5M or more with the highest priced spec home being 11 French Road which sold for $12,075,000 in January of this year. The highest priced currently listed new construction is 66 Glenwood Drive which is listed at $15.75M which is down from its original list price of $17.95M. The average sales price per square foot over the last 2.5 years has been $610/s.f. compared to $569/s.f. for sales so far in 2018.

New construction gets a premium and most builders push for as much premium that they can. As a result, even though there is a huge demand for new construction, the average new construction listing sits on the market for 284 days compared to 197 days for all sales in 2016.

Now part of this is that many builders list the property early in the construction process, sometimes even before ground has been broken. Houses are hard to sell when they are just big open spaces with plywood floors and a lattice work of 2×4’s. For most builders though holding out for that premium is worthwhile since the average sale price to original list price ratio is 89.7%, nearly identical to the 91.1% for all house sales in 2018.

During the Great Recession spec building nearly dried up. We only had 5 new houses sold in 2010 as builders found it nearly impossible to get bank financing. Only a few well financed and larger developers were able to start projects then. In 2014 we tripled 2010 sales with 16 sales of new houses. This doubled in 2015 to 32 sales. In 2016 we have had nearly same new house sales with 31 and the same number in 2017. New construction expanded in 2108 and we have had 41 sale so far this year with 4 new houses under contract.

One thing the Town of Greenwich should work on is encouraging more lower-priced, new construction. For me that would be construction under $1.5M. Of the 82 sales since July 2016 years only 4 of them sold for less than $1.5M. We actually had even fewer affordable sales  from 2014 to July 2016.

What we are getting is smaller houses being torn down and replaced by larger more expensive homes and that is continuing to change the character of Greenwich. It also means that with less price diversity, the town is less resilient to market problems as housing becomes more homogenous.

It’s hard to find incentives for developers to build smaller and make less money. One thing that might work is to allow greater density for lower cost houses. Now that is anathema to traditional zoning, but that is exactly what Connecticut statute 8-30g does. For towns without at least 10% affordable housing, developers can appeal projects that have been denied by P&Z to the Superior Court. There, the judge can ignore all of the zoning laws and allow the development of high density projects. Most of these project however, are apartment style condominiums.

One proposal that might work is to provide a presumption of entitlement for a second unit on a conforming lot where the original house is a historic pre-1940 house and is preserved. At the present time the uncertainty of getting a historic overlay is discouraging more applications that would preserve historic houses. If we combine that good intent with affordable housing, we might have a powerful tool to promote historic houses and affordable houses.

Greenwich Sales up 26% in the Third Quarter of 2018

by Mark Pruner

mark@bhhsne.com  –  203-969-7900

Third Quarter Sales

With the end of September comes the end of the third quarter and it turns out to be good news for Greenwich. Our 183 third quarter sales represent a 26% increase over the 3rd quarter of 2017. If you go back another year in history, that 26% increase in third quarter sales can look a little deceptive, in 2016 we had 207 third quarter sales. Go back ten years, however, and the third quarter average is 185 sales.

Now that 10-year average of 185 third quarter sales is actually really good news. Our 2018 third quarter with 183 sales was an average third quarter, when the pundits were sure our sales would be down because of the federal tax law changes.

As of 9/29/18 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 3 3 1 4 10 13 2.7 2.4 3.0
$600-$800K 16 2 2 4 37 39 3.9 4.3 8.0
$800K-$1M 36 9 7 16 48 57 6.8 6.6 5.1
$1-$1.5M 70 9 11 20 83 92 7.6 8.0 6.4
$1.5-$2M 80 13 8 21 78 91 9.2 9.2 10.0
$2-$3M 136 9 8 17 86 95 14.2 15.0 17.0
$3-$4M 98 11 5 16 53 64 16.6 16.1 19.6
$4-$5M 61 0 2 2 24 24 22.9 26.7 30.5
$5-6.5M 58 1 1 2 23 24 22.7 25.4 58.0
$6.5-$10M 50 2 1 3 8 10 56.3 52.5 50.0
> $10M 35 1 0 1 8 9 39.4 40.8    –
TOTAL 643 60 46 106 458 518 12.6 13.0 14.0

The latest numbers from New York City give some credence to that idea. Depending on which agency is doing the reporting 3rd quarter sales in Manhattan were down from 11% to 14%. (One of the problems of not having a multiple listing service.) Regardless, the difference is pretty dramatic, NYC down 13%, Greenwich up 26%.

What we have is a decent, though not a robust market, but as always, the devil is in the details. Various pockets look good. Our over $10 million market has twice the sales of last year with 8 sales versus 4 sales and we have an additional contract waiting to close. Drop down to the $6.5 – 10 million range and things don’t look so promising. We have only 8 sales so far this year compared to 16 sales last year or twice the sales last year. The problem with slow sales is likely to continue as we only have 2 contracts compared to 4 contracts at this time in 2017.

Overall sales and contracts are up from $800,000 to $4 million with the notable exception of $1.0 – $1.5 which has had slower sales for most of the year. The tax law and the increase in interest rates has not helped this segment. Hopefully, this is turning around since we finally saw sales in this price range exceed the sales in September 2017.

September Sales

Part of our 26% increase in third quarter sales was due to good September 2018 sales compared to September 2017 sales. All in all, September was good, average month. Good, because we did significantly better than September 2017 in total sales, 46 sales this year compared to 34 sales in September 2017, but average, because these sales were right at our 10-year average, but this year average is good.

Inventory

Overall, our inventory is up by 29 listings or 5% from this time last year. Curiously, this increase is mostly attributable to only two price ranges. The price range from $800K – 1M is up 20 listings to 36 or more than double last year’s 16 listings. This is normally a pro-seller buyer range, for example last year we only had 4.2 months of supply. This year with much more inventory, we are looking at 6.8 months of supply even though sales are up 40% from last year. The increased inventory is leading to increased sales, but the inventory increased even faster.

The other price range with a big jump in inventory is the $3 – 4 million price range where inventory is up 12 listings or 14%. The nice thing for folks with houses in that price range is that sales are up 13% leaving months of supply essentially unchanged at 16.6 months. Not a great number for months of supply but moving.

A third price range where we see inventory up is the $6.5 – 10 million price range where have 5 more listings or an 11% increase. As mentioned above sales are down in this price range and with inventory up, the months of supply are measured in years, in this case 4.7 years of supply.

The Micro and L.E.O. Views

So, what does this all mean when you go micro and look just at Greenwich. Sales YTD are up from last year. The high-end started out well, but has returned to the slowerness of last year. Our ultra-high end is doing better than we have seen in a while. The heart of our market from $600,000 to $4 million is doing better than last year and seems to be strengthening.

If you pull back and look at the Greenwich market from the low earth orbit of the Space Shuttle, Greenwich is looking pretty good. It’s a bright spot in a region with few of those. It’s a nice time to live in Greenwich, but it is most of the time.

 

September2018MarketReport4E.mp.100518

Backcountry Greenwich, CT 2018

by Mark Pruner

Berkshire Hathaway HomeServices – New England

203-969-7900 – mark@bhhsne.com

What’s going on in backcountry Greenwich? That’s actually a really hard question to answer. Some stats point to backcountry getting better. For example, our days on market this year are dramatically down to about 9 months compared to 15 months in 2017 and 12 months in 2016. On the other hand, our median price for a backcountry sale is down to $2.45 million compared to $2.68 million the prior year but is up from 2016’s median price of $2.20 million.

Backcountry as of 9/19/18 Inventory Contracts Last Mo. Solds Tot. Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply
< $600K 0 0 0 0 0 0
$600-$800K 0 0 0 0 1 1 0.0
$800K-$1M 0 0 0 0 0 0
$1-$1.5M 9 0 0 0 5 5 17.1
$1.5-$2M 12 0 3 3 6 6 19.0
$2-$3M 19 0 3 3 7 7 25.8
$3-$4M 15 1 1 2 7 8 20.4
$4-$5M 14 0 0 0 1 1 133.0
$5-6.5M 18 0 0 0 1 1 171.0
$6.5-$10M 16 0 0 0 1 1 152.0
> $10M 11 0 0 0 2 2 52.3
0
TOTAL 114 1 7 8 31 32 34.9

Our sales on an unadjusted, annualized basis come out to 39 sales compared to 45 sales in 2017 and 62 sales as recently as 2015. The good news for those of us who live in the backcountry is that we will very likely have more sales than that in 2018, as we have seen sales in backcountry shift to the fourth quarter, (but then again may be not this year).

The one scary number for backcountry homeowners this year is “1”, that’s the number of contracts waiting to close in backcountry. When I put in the search criteria in to the GMLS for backcountry contracts and that number came up, I was sure that it was wrong. We have 114 listings in the back country and we have had 31 sales so far this year how could we only have 1 contract in the backcountry.

So, I mapped all the contingent and pending contracts on the MLS and lo and behold there were 4 contracts, not great but better I thought. Unfortunately, it turns out that while the GMLS calls backcountry “North Parkway” they don’t really mean it. Two of the sales that are geographically north of the parkway are in Glenville according to the MLS. As to the other contract it turned out to be just over the border in North Stamford; so, we really do only have one pending contract in backcountry. As President Trump would tweet, “not good”.  

It is not all bad news, inventory is down by 12% from last year and we have the previously mentioned big drop in days on market for the backcountry houses that are selling. Our highest price range in particular is looking much better. Over $10 million we had 24 listings at this time last year and this year we are down by more than half to only 11 listings. We also have had 2 sales over $10 million in backcountry Greenwich this year and last year we had none at this this time.

From $1.5 – $4.0 million inventory is down an additional 9 listings. What we are seeing is more people deciding that backcountry is a nice place to live and as a result our inventory in backcountry is down in most price ranges. On the sales side, we can’t really say till the end of the year since post-recession the 4th quarter has seen better sales. (Let’s go contracts!)

The reality is that you can over-analyze the market when you are dealing with only a few dozen sales. What we have seen is that when you look at price/s.f. the market has been stuck in a trading range between $470 and $565/s.f. for the last seven years with no clear trend. We have yet to have three years in a row where the price per square foot has continued a “trend”.

The same can be said for days on market. In the last 7 years, days on market has stayed between 267 DOM and 367 DOM with the one exception being 2017 when we saw an average of 475 days on market.

So, what does this all mean? Firstly, the backcountry market has not recovered like front country has. Old Greenwich, Riverside and central Greenwich continue to look good, while Cos Cob, Glenville and Pemberwick are arguably doing even better, albeit off a lower base price. Also, as you can see when you compare backcountry to mid-country, backcountry had a distinct bubble from 2004 to 2008. If you ignore this period, the “decline” in backcountry is more like a slow drifting. However, for anyone who bought in those years it makes for wrenching changes.

So, what can be done about this? Several groups are working on this. The Round Hill Association, under it’s new president, John Conte, has formed a committee to emphasize all the good things in mid-country and backcountry Greenwich and there are many. Some of the wealthiest people in the U.S. have made backcountry Greenwich their homes over the last 100 years and much of what attracted these people has not changed. The Town’s Economic Advisory Committee is also promoting Greenwich as a place to live. The BET’s no property tax increase budget this year finally got some national play in an article about Old Greenwich that appeared in the Wall Street Journal’s Mansion Global affiliate. (I might have helped that a little. 🙂

All these things move in cycles and backcountry will be back, but so far this year, it’s still mostly drifting, with occasional bright spots.