The Greenwich October Real Estate – Another Good, Average Month

October was our fourth month in a row that was “average”. In fact, compared to last October’s 37 sales, this October’s 40 sales are up a little, and is only one sale below our ten-year average of 41 sales. From July to October, the four “good” months, we have sold 223 single family homes compared to 222 last year and a ten-year average of 225 sales. The problem with 2019 has been the first six months. In those first six months, we only sold 226 houses, down from 275 houses last year, which was down from our 10-year average of 287 houses.

October2019.2017-2019.111219

For the entire year, we are down 9% in sales from 492 sales last year to 449 sales this year. And, the problem with problem with our last four average months is that so far, we are not making up much of that first half shortfall in sales. On the good news side, inventory is down by 22 houses to 587 single family homes and our 40 October sales were up from last October.

As of 11/08/2019 Inventory Contracts Last Mo. Solds Last Mo Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 3 3 2 5 17 20 1.8 1.7 1.5
$600-$800K 28 7 3 10 29 36 9.7 8.9 9.3
$800K-$1M 22 7 1 8 38 45 5.8 5.6 22.0
$1-$1.5M 71 13 11 24 91 104 7.8 7.9 6.5
$1.5-$2M 74 17 7 24 73 90 10.1 9.5 10.6
$2-$3M 120 14 11 25 101 115 11.9 12.0 10.9
$3-$4M 98 15 2 17 42 57 23.3 19.8 49.0
$4-$5M 56 4 2 6 22 26 25.5 24.8 28.0
$5-6.5M 38 3 0 3 15 18 25.3 24.3 #DIV/0!
$6.5-$10M 48 3 1 4 15 18 32.0 30.7 48.0
> $10M 29 1 0 1 6 7 48.3 47.6 #DIV/0!
                   
TOTAL 587 87 40 127 449 536 13.1 12.6 14.7

A couple of areas stand out; from $2 – 3 million our inventory is down 10% and sales for year are up 12%. The other stand-out area is from $5 – 6.5 million where inventory is down 32% and sale are up 40% from only 8 sales last year to 15 sales this year. The problem with this jump in high-end sales can be seen when you compare the sales price to the Tax Assessors 2015 assessment. Last year that ratio was 1.52 this year it is 1.41 or a drop of 8%. When you look at the $/s.f. that has slipped from $994/sf last year to $822/sf this year or a drop of 17%. The sales price to original list price is also down and the days on market is up.

Oct2019vs2018.Spreadsheet.mp.110819

For the glass half-empty and falling pundits this shows a weak and declining market. To me what is shows is a market adjustment that is likely near its bottom. Prices have dropped significantly in just one year, but sales are also up significantly. Three of the houses that sold between $6.5 and 10 million were on for an average of 1,265 days or 3.5 years. These three houses sold at 67% of their original list price, but they sold for a total of $24.2 million and an average price of $8 million. Buyers are swooping in to pick up these bargains as our 40% jump in sales show.

The Wall Street Journal has continued their Greenwich bashing with an article last week headlined, Television Host Regis Philbin Lists Greenwich Home for a Big Loss. The reporter sites her own previous article, Wealthy Greenwich Home Sellers Give In to Market Realities for support. This is her third Greenwich bashing article and is in contrast to her article on our neighbor Bedford, NY which is entitled, The Small Westchester Town That Draws Hollywood A-Listers and Billionaires. As I wrote above sales are down and prices are also down and I think that should be reported, but the reporting needs to be balanced to give an accurate picture of the market. The Wall Street Journal with her article President Trump’s Onetime Greenwich Estate Relists for 29% Less gives a one-sided and slanted view as I wrote in my article about today’s day-glo journalism.

One of the aspects of day-glo journalism is that other writers take a sensational article and further sensationalize it, often with a loss accuracy. We saw this with this week’s National Review article, Who Wants to be a Millionaire in Greenwich. That article opens with the inaccurate statement that Regis Philbin just sold his house, rather than just listed it. The article goes on to say that “sellers routinely have been taking losses of $1 million or more” Given that our median sale price is $1,900,000 this isn’t very likely. It is true of many high-end houses that were bought in the backcountry bubble from 2006 – 2010, but generally not true for folks who bought more traditional homes outside of north Greenwich.

Oct2019.MoS.110919

So, what have prices done this year? Well our median price is up 4.6% from $1,816,250 last year to $1,900,000. This is due not to a shift in values in Greenwich, but is due to a slight increase in the percentage of sales above the median price. A better indicator of what prices are doing is the sales price per square foot where prices are down 2.5%. The sales price to assessment ratio is also down 5.3% Clearly, the change in federal tax deductibility of state and local taxes have affected Greenwich prices just as they have done in NYC and the northeast.

On the good news side, sales in backcountry are up 48% from last year with 49 sales so far this year. (I’ve had 3 of those sales.) Sales are up, because prices are a bargain. There a couple of listings that I think are just amazing. If you are looking there give me a call. Most folks are now adjusting their price expectations to the new reality and people are buying in backcountry. Our least expensive house went for $600,000; an 1829 house on 0.64 acres located on Riversville Road and our most expensive house went for $14.87 million, a 2011 house on 5.7 acres on John Street with 12,368 square feet.

Oct2019.Sales.Inv.Cur.Ks.110919

Overall our market is better, but still challenging. Correct pricing is crucial and houses that need work are tough sells. This has become such an issue with today’s picky buyers that I’m actually talking with builders and owners about renovating their properties before the sale and splitting the increase in value.

Our 87 contracts show a tilt to the higher end. This is a trend we are seeing post-recession with more sales above the median happening later in the year. As a result, our median sales price at year end may be even higher than it is now and thus even higher than last year.

Our market tends to change three times a year, so we are due for one more change before year-end. In Greenwich, average never lasts for long.

Oct2019.4Pie.110819

 

 

 

Sleazy practices in real estate offers, bad square footage numbers & wetland soil types

Over four decades as an attorney, business owner and Realtor, I’ve learned some hard lessons about negotiations and who you can trust in negotiations. In the Greenwich real estate market, we have over 1000 members of the Greenwich Association of Realtors, but there are probably only about 200 that do the very large majority of all the deals each year. We all know each other, or at worst know somebody who knows the other agent’s reputation for honesty and fair negotiating.

The Greenwich real estate community’s reputation for fair dealing is self-reinforcing in that the Realtors that are known to be sharp dealers are actually at a disadvantage as other Realtors don’t take what they say at face value. This means that even when they are actually being truthful, the other agent still has her doubts. As a result, deals that could be done if there were more trust between the parties don’t get done.

Let’s look at some of the tactics and situations to be aware of when negotiating a deal.

I.        The Phantom Second Bidder

Buyers tend to make higher offers and quicker counter offers when they are competing against another buyer. No one likes to get beat out for the house that they want and our surfeit of Type A personalities in town just hate “losing” period. If it’s a hot house in a hot market, multiple offers are to be expected. Unfortunately, the other bidder is not always real, or their level of interest may not be as high as represented. This is when having a good broker can be very helpful, to help determine just how worried a buyer should be about the other buyer.

II.      The Off-Market Buyer

Some buyers want particular neighborhoods or a particular type of house. In such cases, agents may contact owners whose properties aren’t listed inquiring whether they might want to sell their house. Every year several houses are sold this way. The problem comes when an agent purports to have a buyer for a property as a tactic to get a listing. One easy way around this for homeowners is to sign a listing agreement with the agent, but limit it to that one showing.

III.    Simultaneous or Concurrent bidding

Buyers sometimes make offers on two or even more houses at once, trying to play one homeowner against another or just to hedge their bets. It’s a risky strategy as one seller or both may decide they don’t want to get involved in such a negotiation and decide to pull-out. If the agent reveals that there are simultaneous bid, then everyone is on a level playing field.

Where this is a problem is when there are multiple offers on one house and the simultaneous bidder doesn’t want their offer tainted by the fact that they are bidding on another house. The simultaneous bidder can win the bidding war on house “A” and then turn around and accept an offer on house “B”.  The owner of house “A” can then find that the other bidder for their house has moved on. One way to fight this is to simply have your agent ask by email if the other party is making simultaneous offers. Very few agents, will want to misrepresent something in writing.

IV.    Basements, Attics & Square Footage

In Greenwich we can only use the house square footage from an architect, builder, or most commonly the square footage of the house on the tax card. The problem here is that this square footage may or may not include the basement depending on whether the basement is a walkout basement or is underground (and it’s even a little more complicated than that.) Lots of our financial types like to look at cost/square foot to figure out whether the house is fairly priced or not.

Our median price per square foot so far this year is $521/s.f. It’s a lousy number to use as it does not take into account; the size of the lot, the presence of wetlands, or whether the basement is included. If you do want to use that number, always ask if the basement and/or “attic” is included in the square feet. Even better go see the house and decide whether what is there works for you. Houses with identical square footages can feel spacious or cramped depending oh how they are laid out.

V.      Soil Types, Wetlands and Maps

Wetlands serve a vital purpose in protecting our natural resources and controlling flooding. State law mandates their protection and we have a town agency with a hardworking staff and well-educated board members to hear matters involving wetlands. We also have a town GIS department that puts out very useful maps showing where wetlands are located. Wetlands however are defined by soil types which can only be determined by a licensed professional. As a result, the wetlands shown on the Town GIS maps don’t always coincide with what a soil scientist would map out.

The presence of wetlands can greatly affect what you can do on a property. Also, the wetlands don’t have to be on your property to affect what you can do there. The presence of wetlands on the property in the area can prevent or cause modifications in what someone can do with a property. As a result. the FMV will be different depending on where and how extensive the wetlands are.

Both wetlands and the allowed above ground square footage (FAR) change the value of a property and some agents may not make this info readily available so if you are thinking of buying a property that might be affected by wetlands or if you want to expand a house that is already near it’s FAR limit, you want to do your own homework on this matter. The people at the at the Tax Assessor’s office and the IWWA can be very helpful.

 

A Guide to Using Real Estates Statistics to Your Advantage

What Statisics are Useful and which Statistics are Misleading

by Mark Pruner

There are a lot of statistics in real estate and they can be manipulated to tell different stories. Gleaning the gold from the lead is not always easy.

Overall house sales by month

One graph you see quite a bit in my Greenwich Sentinel column is the number of single-family home sales by month. The graph I usually use has home sales for each of the last two years, the current year and the 10-year average. What is not included in, but you often see presented elsewhere are sales numbers that include all types of real estate; co-ops, condos and sometimes even multi-family and land. If you are the Town Clerk and you want to see if conveyance taxes are going up or down the whole market is fine, but it’s not so good if you want to know how each type of property market is doing.

Condos, land and multi-family all have different types of buyers with different demand curves. There is some overlap, but generally house buyers don’t look at condos and families looking to buy land and build a new house don’t look at multi-family investment properties. Lumping them together muddies the state of the house market, and due to the size of the house market size, the other markets stats are overwhelmed by the housing market. So, when you see a sales number check and see what types of property are included.

The other thing you often see are month over month comparisons. These also are not very useful as we have a major seasonal element to our sales as you can tell by the 10-year average line for single family homes in Greenwich. The odds are very good that nearly every year in your lifetime, May sales will be higher than April sales and that November sales will be lower than October sales. Saying that sales are up or down from the prior month generally doesn’t tell you very much, because of this seasonality. If the change is different than the 10-year would predict, then something likely is happening. A good example are our July sales this year. This year and last July sales were higher than June sales and not just by a little.

If 2020 is the third year with higher July sales than June sales, we may well have a new sales curve and this may be to our detriment. If sales are moving to later in the year as they did this year and last year, then pundits are likely to see the market as weaker than it is by assuming second half sales will be similar to the first half of the year.

It’s going to be harder to say just how well the market is likely to do for the whole year by the end of the first half of the year. In 2007 56% of our sales were in the half of the year, while in 2018 it was only 46%. A 10% difference doesn’t seem like a lot, but it means that sales as a percentage of the whole are down 20% in the first half of 2018 compared to the whole year percentage in 2007.

As of 9/30/2019 Inventory Contracts Last Mo. Solds Last Mo Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 4 4 4 8 15 19 2.4 2.2 1.0
$600-$800K 24 5 4 9 26 31 8.3 8.1 6.0
$800K-$1M 22 4 5 9 37 41 5.4 5.6 4.4
$1-$1.5M 65 15 8 23 80 95 7.3 7.2 8.1
$1.5-$2M 90 11 9 20 65 76 12.5 12.4 10.0
$2-$3M 122 16 6 22 90 106 12.2 12.1 20.3
$3-$4M 105 7 2 9 40 47 23.6 23.5 52.5
$4-$5M 55 3 4 7 19 22 26.1 26.3 13.8
$5-6.5M 49 2 1 3 15 17 29.4 30.3 49.0
$6.5-$10M 53 1 2 3 14 15 34.1 37.1 26.5
> $10M 33 1 1 2 6 7 49.5 49.5 33.0
                   
TOTAL 622 69 46 115 407 476 13.8 13.7 13.5

Pundits are going to be making dire prediction in early July unless they adjust the 1st half sales up to account for our shift to second half sales. This will be particularly so as our sales over $5 million shifted to later in the year several years ago.

Months of Supply

Months of supply is also another very useful way to look at the overall market and at particular segments within the market. The good thing about this metric is that it includes not only sales, but the current inventory. It sets out how long it would take to sell our present inventory based on the prior sales rate. For an easy example if we had sold one house a month so far this year and you have 9 house in inventory then you have 9 months of supply.

You can also look at months of supply in different ways; such as only actual closed sales, sale and contracts, or just last month’s sales annualized. If I am representing the seller, I like to see each of these number decline. For example, our September closed sales numbers show that from $600K – 800K we have 8.3 months of supply, not particularly good for an under a million-dollar price range in Greenwich. That however includes the poor first half and the good third quarter.

When you add in contracts and assume they will all close in 45 days you get 8.1 months of supply. A little lower, but the buyers aren’t as active as we’d like given the inventory we have on the market. The good news is that when you annualize the four September sales in this price category you are down to 6 months of supply so as of September this part of the market is looking up even though inventory is up 50% over last year.

Days on Market

Months of supply sometimes gets confused with days on market. If you total up the number of days each house was on the market and take the average, you get days on market for the whole market. If each house came on the market and sold on average in 45 days, then you have 45 days on market (DOM). The lower the days on market, the hotter the market, as buyers snatch up houses within weeks of coming on the market.

If you had 45 days on market for the average time a listing was on the market you would have a very hot market. Right now, we have 141 days on market for our sold properties and 169 days on market for unsold listings. This is generally pattern as the well-priced, nice house sell quicker than the over-priced houses that sit on the market.

Curiously, the average days on market initially goes up in a hot market as houses that have been on the market for months and years are finally finding buyers. This is a number where the difference between the average and the median can be quite large. All you need is for a couple of houses that have been on the market for 1,000+ days to sell and the average days on market will jump while the median will barely budge. (BTW: In the prior paragraph I didn’t tell you whether I was using the arithmetic average or the median for the 141 DOM sold and the 169 DOM inventory. The better number is the median and that what these number area. The median is as affected by the long tail of days on market. The average DOM for solds is 238 days on market and the DOM for our inventory is 262 days. We have some people that have listed their houses for a really long time.)

Days on market varies significantly by price range. The lower the price range the lower the days on market. We also see the same effect in months of supply. The rough rule of thumb is that months of supply under 6 months are a seller’s market, but your get over $5 million and sellers start feeling good when months of supply drops below 12 or ever 18 months. (Sellers haven’t been feeling good for a few years now in those price ranges.)

So, if you are thinking about listing your house or considering buying, what numbers should you look at? Here’s a quick 5-point check list:

  1. Overall are sales and inventory up or down?
  2. How are sales and inventory changing in your area and your price range?
  3. What is the months of supply for sales, what about with contracts and for the prior month annualized?
  4. What is the difference in median sales DOM and inventory DOM? Is it getting better or worse?
  5. How is your market doing on a year over year basis and against the 10-year average?

For the seller, months of supply and days on market are significant factors in how aggressively you have to price your house. When these numbers are high you want to be at the lower end of price per square foot and have better staging than your competition. For buyers, you can afford to be more aggressive in your negotiating, particularly where you have  other options that are satisfactory.

But numbers are just numbers, when it comes down to one-on-one sales negotiation. When you are negotiating you want to know the needs of the other persons, there personalities and their stress tolerance. In negotiations these are often more important than how soft or weak the market is. Knowing the numbers and knowing how to negotiate in the Greenwich market is what gives you the best result, a sense of control and can even make buying or selling a house fun.

Greenwich, CT Sales Looking Good Particularly Compared to NYC

Inventory Down, Contracts Up, Sales Unchanged

by Mark Pruner

The market for homes in Greenwich in the third quarter was good in Connecticut particularly compared to a major slump in sales and prices in New York City. We had 181 home sales in the third quarter of 2019 which was about the same as 185 home sales in the third quarter of 2018 and 184 sales which is our ten-year average for home sales in the third quarter.

Our inventory was down a little bit, 3% lower, as of the end of the third quarter. We had 622 listings down from 643 listings at the end of Q3 2018. This is after we had a poor first and second quarters in 2019 where inventory was up, and sales were down in Greenwich.

On the sales price side, the median sales price for a house in Greenwich, CT is up 2.7% to $1.90 million from $1.85 million last year. At the same time the average sales price for a house in Greenwich is unchanged at $2.43 million. I wouldn’t however get too excited about this sales price increase.

Lots of people like to focus on these numbers as indicative as to what the value of individual houses are doing, but as I have written before the main thing that drives changes in the average and median prices is not a change in house values, but a change in the mix of what is selling.

The sales slump in the first half was more concentrated in the under $2 million market. As a result, median prices went up, while at the same time prices for high-end houses in mid-country and backcountry are continuing to see resistance from buyers. The result in higher end house prices have declined while our median price has gone up.

As of 9/30/2019 Inventory Contracts Last Mo. Solds Last Mo Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 4 4 4 8 15 19 2.4 2.2 1.0
$600-$800K 24 5 4 9 26 31 8.3 8.1 6.0
$800K-$1M 22 4 5 9 37 41 5.4 5.6 4.4
$1-$1.5M 65 15 8 23 80 95 7.3 7.2 8.1
$1.5-$2M 90 11 9 20 65 76 12.5 12.4 10.0
$2-$3M 122 16 6 22 90 106 12.2 12.1 20.3
$3-$4M 105 7 2 9 40 47 23.6 23.5 52.5
$4-$5M 55 3 4 7 19 22 26.1 26.3 13.8
$5-6.5M 49 2 1 3 15 17 29.4 30.3 49.0
$6.5-$10M 53 1 2 3 14 15 34.1 37.1 26.5
> $10M 33 1 1 2 6 7 49.5 49.5 33.0
                   
TOTAL 622 69 46 115 407 476 13.8 13.7 13.5

 

So, the third quarter was pretty average for sales, but this is excellent when you see what higher taxes have done to New York City. While Greenwich sales chugged along in the third quarter, New York City saw sales fall 11.5% overall and a huge 31.5% over $2 million according to a report by Josh Barbanel in the Wall Street Journal this week. The median sales price dropped from a high of nearly $1.4 million in the second quarter to $1 million in the third quarter or a drop of 25% in just one quarter.

This is because Gothamites with money are now getting soaked with an expanded transfer tax to once again stick it to their wealthiest NYC buyers. Gordon M. Summer, aka Sting, had signed a contract before the new tax kicked in and didn’t pay any increase in tax on his $65.8M condo purchase. Stanley Druckenmiller, who bought after the new tax kicked in, paid $2.4 million on his purchase of a $53 million co-op according to the WSJ.

We shouldn’t get too self-congratulatory as our own legislature passed their version of a mansion tax that will kick-in on sales over $2.5 in July next year. Even at the new higher rate, we are still talking about only a 2.25% conveyance tax on. This is a fraction of NYC transfer tax on higher end properties. Having said that you can expect that June 2020 will be a record month for high-end sales and July 2020 will be a bust for sales. Still, we are looking forward to welcoming more tax refugees from New York as Greenwich with its extraordinarily low property tax has done for decades.

We may actually be seeing a little of that right now as our sales from $6.5 – 10 million are up 75% compared to last year with 14 sales compared to only 8 sales last year. A significant part of this increase is the drop in prices of houses over $10 million to the next price range down. This has resulted in some real bargains for those at the high-end and who are fleeing NY’s higher taxes.

I like to take a positive, but realistic, view of the market and what I’ve been touting as good sales is essentially unchanged from last year for the third quarter and this is after a slow first two quarters. This looks good in comparison to NYC, NYS and other parts of the state. Still we are seeing the changes of the federal tax law ripple through Greenwich and the rest of the northeast. The loss of the SALT deductions at the federal level and also the limit on mortgage deductibility have clearly had an impact.

You can see the mortgage deduction limitation If you look at the $1.5 – 2.0 million market. Most years our months supply is a smooth increasing curve with very low months of supply under $600K with ever increasing months of supply to the over $10 million market. We have a kink in the curve at $1.5 – 2.0 million. That price range has 1.25 months of supply, actually a little higher than the months of supply from $2 – 3 million. The $1.5 – 2 million price range has lots of young families buying who are particularly sensitive to the loss of deductibility on mortgages over $750,000. Since the mortgage interest payments aren’t deductible for mortgages over $750K, inventory accumulates, and sales are somewhat lower.

Summary

Overall, it’s good being average right now if you live in the northeast. Here in Greenwich, we are also seeing significant building activity. I drove a client down Sumner Road in backcountry Greenwich this week and there are three large houses under construction on this prestigious street just off prestigious Round Hill Road. People are investing some big bucks in Greenwich real estate not only for custom homes, but also for spec homes.

As for October we’ll have to see. Our contracts are up 15% over last September, but it’s only 9 houses to 69 houses. Still our 10-year average for sales in October is only 42 houses so stay tuned to see just how much NY and NYC can help out Greenwich real estate.

 

 

 

 

 

 

 

GREENWICH, CT AUGUST 2019 REAL ESTATE SALES STATISTICS

Good Sales, Better Contracts

by Mark Pruner

We had 63 single family homes sales in August 2019 in Greenwich. This is 2 more sales than we had last year and just 1 less than our ten-year average. We also have 83 contracts waiting to close which is 22 or a third more than we had last year at this time. Both are indicative of our strengthening market. Earlier in the year sales and contracts were not good and there was some real worry about whether Greenwich real estate was going through a paradigm shift that meant we were just going to have a slower market in the new federal tax regime with non-deductible state and local taxes.

As of 9/2/2019 Inventory Contracts Last Mo. Solds Last Mo Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 2 6 1 7 10 16 1.6 1.2 2.0
$600-$800K 26 6 6 12 22 28 9.5 8.8 4.3
$800K-$1M 19 8 3 11 32 40 4.8 4.5 6.3
$1-$1.5M 59 17 13 30 70 87 6.7 6.4 4.5
$1.5-$2M 88 14 11 25 57 71 12.4 11.8 8.0
$2-$3M 120 16 17 33 84 100 11.4 11.4 7.1
$3-$4M 93 6 4 10 38 44 19.6 20.1 23.3
$4-$5M 54 6 3 9 16 22 27.0 23.3 18.0
$5-6.5M 43 0 4 4 14 14 24.6 29.2 10.8
$6.5-$10M 48 2 1 3 11 13 34.9 35.1 48.0
> $10M 33 2 0 2 5 7 52.8 44.8 #DIV/0!
 
TOTAL 585 83 63 146 359 442 13.0 12.6 9.3

It may be possible that we are seeing a sales slowdown, but the last two months we have started to pick up ground on last year and on our historical averages. Just as in this month, our contracts were up in July pointing to the better sales month that we had in August. With a higher number of contracts, we are very likely to see a better month in September 2019 than we saw in September last year. However, it’s not like the last two months were stellar, they were just average. Average looks pretty good compared to bad and we’ve had two months of average, so things are looking up.

It’s not only sales that are back to average, but also inventory. Above $2 million we are basically the same as last year, except for $5 -6.5 million where we are down from 51 listings to 43 listings this year. Below $2 million we have a mixed bag. We have more inventory from $600K – 800K and from $1.5M – 2.0M, but less inventory from $800K – $1.5M. These changes in both directions are not small. From $1.5M – 2.0 million we are up 19 listings and from $800K – $1.5M we down the same 19 listings. When you add it all up, our inventory at 585 listings is only 3 more than last year or not even 1% different.

That’s the market overall, but for any one house, you really need to look at the competition on a house by house basis. Buyers are going to compare your house to handful of others and pick one. That’s when good marketing and staging can make a real difference.

Under $600K, you have less to worry about, since you don’t have even a handful of competitors; you only have one other house listed. In this price range your competition is not the other houses in Greenwich, but Stamford, Norwalk and Westchester. I wouldn’t be too worried though as we’ve sold 10 houses under $600K so far this year and have 3 others under contract. This makes for an amazing 1.6 months of supply. As always folks are very interested in getting into Greenwich at that price.

Just above that price from $600K – 800K a lot more people are interested in getting out of Greenwich. Right now, buyers in that price range have 26 options compared to only 13 listings last year. Year-to-date sales are down 13 in that price range, but contracts are up 5 from last year, so we should start eating into that inventory as demand for this price range has grown the later we get in the year.

In fact, that increased demand is true all the way up to $3 million. Just above that price range, $3 – 4 million has fewer contracts and fewer August sales than last year. The result is that months of supply for $3 – 4 million is up to 19.6 months of supply compared to 15.5 months last year.

Above $4 million the market is also improving slightly with a few more sales and about the same inventory, but this masks some really dramatic price drops, that sellers have made to bring their houses in line with today’s market. It’s clear that the 2017 tax law limiting the deductibility of our state income tax and our local property tax has made owning a home in Greenwich more expensive.

As a result of houses being more expensive to own, we are seeing in Greenwich what we have always seen in Westchester County. In Westchester, homebuyers are facing the highest property taxes in the country and as a result home prices are lower than they are in Greenwich on a dollars per square foot basis. Here in Greenwich it’s more expensive to own a house now than it was in 2017. The result is that we are seeing lower prices particularly above $4 million where the state income tax and the non-deductible property taxes make homeownership more expensive. (Alright you can deduct the first $10,000 of SALT, but that doesn’t go far when you have $50,000 of Greenwich property taxes and $100,000 of state income taxes to pay.)

The other tax law change that is having an impact is the lowering of the mortgage deductibility from $1.1 million to $750,000. This has been offset by falling interest rates as people continue to demand U.S. Treasury debt as a safe haven in a turbulent world. This may explain some of the slow down in our market just above $1.375 million ($1.1 million divided by an 80% mortgage.) At the same time, we had significant tax rate deductions, but the NY metro area with its high income and property taxes, seems to be one of the areas where lots of people are paying more federal income taxes even with the new, lower federal tax rates.

The Fall Market

So, what do we have to look forward to in the fall market? Well the easy part to say is that we will have good sales in September. We have the aforesaid 83 contracts waiting to close and our average September sales are 47 houses.

The rest of the market is harder to predict. Inventory will rise in September as it always does, but by a lot or a little is the question. Also, what areas are going to do well. Carline Martin and I are putting on some land in a new development near the Chieftains in western Greenwich, which is an area that has seen more activity as people move from Westchester, but want to stay close to their old friends in Westchester who can’t sell their houses.

Backcountry and Old Greenwich will also probably continue to do well but will the shift in sales to later in the year continue. If so, will there be enough additional sales to make up lost ground from the first half of the year? We are still down 53 sales from last year or 13%. However, if you throw in contracts, we are only down 7% from last year. Stay tuned it will be an interesting fall m

Greenwich August 2019 Real Estate Stats by Neighborhood

 

Neighborhood Report

Inventory July 2019 Sales July 2019
Listings DOM Avg LP/SqFt Sales DOM Avg SP/SqFt Avg SP/ASMT Avg SP/OLP
Banksville 4 93 $337 1 324 $393 1.460 97.0%
Byram 10 259 $600 9 157 $417 1.807 90.3%
Cos Cob 58 176 $515 25 151 $427 1.512 89.9%
Glenville 21 203 $451 12 226 $421 1.565 85.5%
North Mianus 5 148 $470 6 99 $488 1.558 97.2%
North Parkway 119 348 $627 29 337 $525 1.350 86.3%
Old Greenwich 68 194 $698 51 148 $617 1.605 91.7%
Pemberwick 7 129 $491 5 301 $383 1.746 93.4%
Riverside 68 239 $740 45 181 $533 1.624 91.5%
So. of Post Road 66 194 $973 31 277 $748 1.895 89.6%
South Parkway 212 269 $643 82 286 $561 1.464 86.2%
Grand Total 640 252 $666 296 229 $555 1.567 89.1%

 

So, that’s how the overall market is doing, how are the individual neighborhoods doing. The short answer is things have reversed from last year. Where last year Cos Cob, Riverside and Glenville were hot; this year not so much. So, the bad news first.

Cos Cob

Cos Cob so far this year has seen the biggest reversal with sales down from 45 sales through July of last year to only 25 sales this year or a drop of 45%. Inventory is also up from 46 listings to 58 listings. Despite sales being down and inventory being up, the average days on market for sales is about the same as last year with 151 days this year compared to 161 last year.

As always, the people who price their listings competitively are ones that get sales. Homeowners will find that competitive prices this year are lower this year than last year. The sales price/sf, sales price divided by the town’s assessment and the sales price to original list price are all down compared to last year.

Riverside

Riverside has seen a decline of 17 sales so far this year from 62 sales to 45 sales or a drop of 27%. Part of the reduced sales in Riverside is due to a substantially reduced inventory going from 92 listings last year to 68 listings this year, which is a drop of 26%, which almost exactly matches the drop in sales. As to prices Riverside is telling a mixed story as sales price/sf and the sales price to original list price are both down from last year, while the sales price to assessment ratio is up.

Glenville

Glenville is a much smaller market, with only 21 listings and 12 sales so far this year, but the 12 sales is down from 21 sales last year. In Glenville, unlike Riverside the inventory is almost the same with 21 listings this year and 20 listings last year. As to the price change indicators, Glenville has the lowest sales price to original list price ratio. This means that houses are coming on higher in Glenville then the market thinks they are worth. Both Glenville and Cos Cob had seen more demand in the last couple of years as Old Greenwich and Riverside had gotten so expensive. It looks like, that bargain premium is down in 2019.

South of the Parkway

South of the Parkway has been a tougher market this year with sales down from 93 house sales last year to 82 this year. At the same time, inventory rose from 194 last year to 212 listings this year. All three price indicators are down though not a lot. Given that sales are down 16% for the town overall and sales in this area are only down 12%, you could argue that this area is actually doing better than average.

I have one of those 212 listings at 108 Pecksland and it is what I consider an amazing value with a list price of $1.65 million. This compares to the Tax Assessor’s FMV of $2.34 million. We are getting showings, mostly by families with school age children, but there is a real reluctance to take on even small renovation projects. If you are a buyer that doesn’t mind doing work on a purchase, you have some real bargains to pick from.

 

Now despite the fact that sales are down overall, we do have three areas with good news.

 

North of the Parkway

Deals have gotten so good North of the Parkway that sales are up for the year as is the average sold price per square foot, while inventory is essentially the same as last year. Now this isn’t a big turnaround, but it’s possible we saw the bottom for backcountry at the end of 2018.

Deals are still tough as can be seen from an original list price to sales price ratio of only 86%, but part of this is the large number of houses over $5M, where the traditional SP/OLP is more like 75%. Part is also some houses under $5M that started out too high a while ago have had to really chop their price to generate interest.

For folks in backcountry and mid-country two properties are generating lots of interest and concern. Aquarion Water Company announced that they are consider selling the 80 acres that they own on Lake Avenue just north of the Merritt Parkway. They had previously proposed developing this land in 2006. State law requires the water company to first offer the parcel to the town and then to open space organization and the whole process is likely to take a couple of years.

The other property, Mel Gibson’s old property between Old Mill Road and the Merritt Parkway is up for and Inland Wetlands and Watercourses hearing on Monday August 26th. The developer has proposed 28 houses on 75 acres in what is putatively the 4-acre zone.

                Old Greenwich

Old Greenwich’s inventory is down 13 listings as of the end of July to 68 listings from 81 listings last year. As townwide sales got back to our 10-year average in July so did Old Greenwich, but in Old Greenwich’s case this was not a pickup in the sales rate, but a slowing. OG has sold 51 houses so far in 2019 compared to 52 houses in 2018. The three price change indicators have also turned flat to slightly down, but regardless the activity earlier in the year still gives OG a leg up over other areas of the town due to its good sales earlier in the year.

Byram

The other southern corner of Greenwich, this one in the southwest corner, is doing spectacularly well if you look at the percentage change from last year. Sales are up 80% this year, while the market is even tighter with inventory down 33%. Now this is possible due to the law of small numbers which says when you don’t have much of something even a small change makes a big percentage change. The 80% increase in sales is from 5 sales last year to 9 sales this year, while inventory shrank from 15 listings to 10 listings. Two the three price change indicators are up in Byram. The sales price to original list price ratio went from 88% last year to 90% this year and the sales price to assessment ratio is the second highest in town at 1.807 or 27% higher than the Assessors assigned values as of 10/1/2015.

 

Summary

Like May, July was close to our 10-year average and therefore looked good compared to our weak sales in other prior months. Were it not for a slow June, we could call continued good sales in July a turn around. Also, the neighborhoods are spotty with no area reporting stronger sales, lower inventory and the price change indicators all up. We did have an above average number of contracts at the beginning of August and based on the first two weeks August is looking to be another “average” month, which is good in 2019.

 

 

JULY 2019 – A GOOD MONTH FOR SALES AND CONTRACTS IN GREENWICH

I’ve seen some market reports that compare this month’s sales to the prior month and on that basis Greenwich sales of single-family homes are on a long streak of improvement since February when we had 20 sales. Each of the following months saw sales climb steadily; March – 27 sales, April – 35 sales, May – 57 sales, June – 60 sales and in July we had 70 sales. We also have 95 contracts pending which is up 9 contracts from last year.

The problem with comparing this month’s sales to last months sales and trying to make any conclusions is that real estate sales have a pronounced seasonal element. The National Association of Realtors seasonally adjusts their numbers to try to take out the skew to higher summer sales and lower winter sales. The problem with this approach is that it misses systemic changes, which is what might be happening now.

If you look at our 10-year average for sales, there is a strong peak in June with a 10-year average of 84 sales compared to May’s average of 57 sales and July’s average of 72 sales. This year we had 70 sales in July compared to 60 sales in June 2019. This pattern is a repeat of 2018 sales where we had 76 sales in July and only 68 sales in June 2018. Going back to 2006 we have had this happen only twice; once was the recession year of 2009 and the other was in 2014 when we had a big jump in sales the last few days of July.

So, we’ve now had two consecutive years with more July sales than we had in June. The question is, is this a new trend with sales happening later in the year? If so then June 2019 sales don’t look so bad. We also saw the same thing in 2018 with July contracts there up over July 2017 contracts. If this trend continues then some of the gloom and doom that pundits were focusing on in the first half may simply be a shift in sales to later in the year. (BTW: If you ever need to look at prior months statistics the Greenwich Sentinel has my articles posted at GreenwichSentinel.com until July of 2015 and I have another two years of monthly reports posted GreenwichStreets.com that have additional charts I use both of these resources several times a week to answer questions that clients and other agents have. They are free for anyone to use.)

The July increase in sales was also matched with a drop-in inventory to 640 house listing. Now this is down only three listings in total from July 2018’s 643 listings, but it means that we have worked off the bubble of inventory that we had for the prior months in 2019.

When you look just at the present state of the market today, things don’t look too bad. Our inventory is down to 615 listings our July sales were only 2 sales below our 10-year average and our contracts are up over last year. But we are still transitioning from a poor first half. For the year to date our 296 sales are down 55 sales or 16% from last year. Lower sales for the year so far have led to an increase in months of supply for the year. We are up 2.3 months of supply for 2019 to 15.1 months from 12.8 months of supply at the end of July last year. That is not a great number.

We do have some residual bad news hangover. Three price categories have both higher inventories and lower sales for both the month of July and year to date. The curious thing is that these price categories are spread throughout the price ranges and isolated from good price ranges around them. Whenever you have transition months, things look confused, but if you have a listing from $600K- 800K or from $1.5M – 2.0M or from $4M -5M. It is more of a buyer’s market than it was last year.

As of 8/2/2019 Inventory Contracts Last Mo. Solds Last Mo Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 5 4 1 5 9 13 3.9 3.3 5.0
$600-$800K 26 7 2 9 16 23 11.4 9.6 13.0
$800K-$1M 24 7 11 18 29 36 5.8 5.7 2.2
$1-$1.5M 65 15 12 27 57 72 8.0 7.7 5.4
$1.5-$2M 96 18 11 29 46 64 14.6 12.8 8.7
$2-$3M 136 24 15 39 67 91 14.2 12.7 9.1
$3-$4M 98 7 9 16 34 41 20.2 20.3 10.9
$4-$5M 58 6 1 7 13 19 31.2 25.9 58.0
$5-6.5M 48 3 4 7 10 13 33.6 31.4 12.0
$6.5-$10M 51 2 2 4 10 12 35.7 36.1 25.5
> $10M 33 2 2 4 5 7 46.2 40.1 16.5
                   
TOTAL 640 95 70 165 296 391 15.1 13.9 9.1

On the flip side, inventory is down noticeably from $880K – 1.5M and from $5 – 6.5M. These markets which had looked weaker this year are matching lower inventory and sales similar to last July.

Hidden in the sales numbers is a significant improvement in months of supply from $6.5M – 10M where we are down 37 months of supply from a bad 72 months of supply to 34 months of supply this year. Now a little under 3 years of supply is not great, but it’s a lot better than 6 years of supply in 2018.

The other area that stands out is the $2 – 3M where whose inventory is down to only 21% of the market but has 23% of sales YTD and 25% of the contracts. This should continue to look good in August due to the number of contracts.