How Back is Backcountry Greenwich?

Q1 2022 Report

by Mark Pruner, Compass – Greenwich – mark.pruner@compass.com

Real estate sales in backcountry Greenwich continued strong in the first quarter of 2021. So far this year, we have sold 24 houses north of the Merritt compared to 22 last year. Both Q1 ‘21 and Q1 ‘22 are more than double the 11 sales in the first quarter of 2020. Inventory has done just the opposite. It has contracted from 83 listings in 2020 year to 55 listings in 2021, to a really small 36 listings in backcountry this year. Inventory has gone down 57% in two years and 35% just since last year. It’s a tight market, and buyers are moving fast and keeping us Realtors very busy. The one fly in the ointment is that we only have 7 contracts in backcountry compared to 23 contracts in 2021.

Under $2 million, we have 3 listings so the backcountry bargains that we used to have are gone. In 2017, we had 129 listings in backcountry and 25 of them were under $2 million. Back then you had a 4,232 s.f. house on 4 acres listed for $1,575,000. Now it was built in 1953 and needed work, but it was a hell of a deal for the person that bought it. Today, the best you can do is 2,894 s.f. on 4.2 acres for $1,875,000 or 1,338 s.f. less for $300,000 more.

To get some perspective on this market, let’s go back 23 years and look at how we got here. Our previous high for sales in backcountry was 90 sales in 2000. For much of what people think of as the heyday of backcountry, sales actually fell from 90 sales in 2000 to 62 sales in the peak year of 2007. That year we sold $306 million worth of houses in backcountry with an average sales price of $4.93 million. If you look at graph of the period, you see a big rise in total sales dollars (volume), while the number of sales was actually dropping. That’s a pretty good definition of a bubble.

In 2008, the bubble started to burst with the number of sales dropping from 62 in 2007 to 34 in 2008 and sales hit their nadir in 2009 with only 27 sales. Sales volume dropped from $306 million to $163 million in 2009. We actually had a pretty good recovery going from 2010 to 2015 when sales grew from 45 to 61 houses.

At the same time, our sales volume and median sales price bounced around. We reached our post-recession low price point in 2012 as our backcountry median sales price dropped to $2,012,000 only to all most match that number three years later in 2015 with a median of $2,043,000.

We didn’t start to see a real recovery until the 3rd quarter of 2019. At that point, prices in backcountry started to look pretty good compared to what you could get in Old Greenwich or downtown Greenwich. In 2019, backcountry sales were up 31% while they were down 11% for the town overall and Riverside saw a drop of 23% as the $10,000 SALT limitation on local tax deductions finally hit Greenwich hard. All this was pre-Covid.

In 2019, our days on market dropped from its post-recession high of 475 days on market in 2017 to only 220 DOM in 2019. In 2020, after a slow first half of the year DOM dropped steeply to 145 days on market. In 2021 our median days on market was 142 and we have ticked up slightly to 151 days on market in the first quarter of 2022.

It’s easy to over analyze this market. There is a lot of Brownian motion in the numbers as the law of small numbers means that one sale like Tommy Hilfiger’s house selling for $45 million in 2021 throws off the averages. Take out that sale and the backcountry average sales price drops from $4.94 million to $3.03 million, which is still a pretty good average.

What is clearly remarkable is the number of sales we had in backcountry last year. Our 102 sales in 2020 is 13% better than our previous high of 90 sales all the way back in 2000 and several multiples of the 29 sales in 2009.

If you really want to make a “gee-whiz” graph, you can annualize our first quarter sales on a weighted basis. Most years the first quarter represents only 18.2% of our sales for the year, so, if you take our 24 sales so far this year and divide by 18.2% you get an expected 132 sale this year.

I’m betting that projection is really just fun with numbers as don’t forget the paltry 7 contracts that we presently have compared to 23 contracts at this time last year. Also, our inventory is much tighter than it was last year, and we are already seeing sales being supply constrained.

Backcountry has always been synonymous with larger houses, and we are seeing an uptick in our median size house sold. Our median house size peaked in 2009 at 8,300 s.f. From 2018 to 2020, our median house size has averaged around 5,600 s.f. In 2021 our median house size went up to 6,144 s.f. or more than 500 s.f. larger. So far in 2022, our median size is up again to 6,327 s.f., while our median house size for the town over all is 4,150 s.f. or almost 2,000 s.f. smaller.

This doesn’t mean that houses suddenly got bigger in backcountry. What it is indicative of is that the smaller houses have been snapped up and we do have supply is at the higher end.

One major issue in backcountry is that sales are distinctly slower when you hit $6.5 million. Over that price we have 2 sales and 16 listings in inventory. That might seem like a big discrepancy, and it is, but last year at this time, we had 29 houses listed in backcountry for over $6.5 million. Also, the majority of high-end sales have shifted to the 4th quarter, so high-end sales in the first quarter have limited meaning.

It’s likely to be a good year for backcountry; inventory will determine just how good, particularly, inventory under $2 million. Stay tuned …

Greenwich Q1 2022 Sales Down by a Quarter and Up by a Third

Greenwich Q1 2022 Sales Down by a Quarter and Up by a Third

You are going to see a bunch of pundits say sales in the first quarter of 2022 are down 27.2%, and while true that percentage is very deceptive. The first quarter of 2022 was an above average quarter even with record low inventory. In the first quarter of 2022, we sold 142 single family homes compared to a record-setting 200 homes in the first quarter of 2021. Go back one more year to the first quarter of 2020, our last pre-Covid quarter, and our sales are up 37.8% not down.

Go back two more years to 2019 and we are up 92% from the anemic 74 sales in Q1 2019. We often are so focused on our stellar sales and year over year focus that we don’t look back even just a couple of years. In March of 2019, we had 608 single family home listings on the market and only 67 contracts compared to this quarter’s 136 listings and 131 contracts.

In April 2019, the Wall Street Journal let a newly arrived Daily News transferee write an article the editor entitled, “Wealthy Greenwich Home Sellers Give In to Market Realities” with quotes such as, “The seemingly never-ending slump is leading some sellers to accept less—sometimes a lot less.” That was one of 6 articles in major publications that were bashing the Greenwich market in 2019. We had a piling on of reporters who were twisting numbers to make a slow market look like a disaster. They looked at their click counts and realized that their reader’s schadenfreude in reading articles bashing Greenwich’s real estate market, was good for their careers.

Three years later we have market where for the first time ever we may soon have more houses under contract than we have houses to sell. In the last couple of years of superlatives, I’m sure that no  one would have guessed that we could possibly have such an upside-down market.

              In 2022, flat inventory is good inventory

For the first two months of 2022 our market was looking up as inventory was flat, i.e., matching early season demand. This was a welcome hiatus after 7 months of falling inventory in the last part of 2021. Unfortunately, our winter burst of new inventory was more likely a slight pause in the buyer frenzy. Our inventory started falling in early March and has continued for the rest of the month. This is the time when inventory should be rising strongly in our spring market.

At the same time, we have contracts on a 6-week spurt. At the moment, we have 131 contracts and 137 houses in inventory. Theoretically, this could actually continue with contracts continuing to rise and inventory dropping to near zero, that’s if every over-priced, fixer-upper and teardown went to contract and what did come on the market went to contract in days, so that most of these new listings never showed up in monthly inventory numbers as they had gone to contract by end of the month, when we do the inventory numbers.

The under $1 million market

My brother, Russ, and I have both have very nice young couples that are looking for their first house for under $1 million in Greenwich. As of this week, they have a choice of 6 houses: 2 in each of Greenwich, Cos Cob, and Old Greenwich. There is nothing listed for under $1 million in Riverside, Glenville, Pemberwick or central Greenwich. These are all areas with R-6 and R-7 lots, where a conforming lot can be as small as 0.17 acres and we regularly see sales under $1 million. Contrast this to March 2019, when we had 608 total listings and 50 of them were under $1 million.

With all that inventory in 2019, we only had 15 sales of houses under $1 million. In 2022, we have the exact same number of sales in the first quarter of 2022, 15 house sales, as we had in the first quarter of 2019, but our inventory is down 78%. We don’t need a lot of inventory to have sales, provided we get new listings. The end result, 275% more sales under $1 million in 2022 compared to 2019. (We are putting on a house for under $1 million next week. I’ll report back on how it goes.)

              Why you should worry about low inventory

Does this mean that we shouldn’t be worried about low inventory? Absolutely not, if you are buyer, you should be very worried and even if you are seller, it’s no time to be complacent. Low inventory means that at any point in time, you as buyer have a small number of houses that fit your criteria.

The result is that motivated buyers, and we have a lot of those, have to broaden their criteria. Buyers have to be willing to go for a smaller house, or if they have the money, a larger house than they want. They may need to do more work fixing up an older house or have to be willing to buy a difficult lot with steep slopes, swamps, rock outcroppings or in a flood plain.

              Why buyers need an immediate alert

Low inventory also puts a big premium on being able to move quickly as well as being flexible. If you are looking now, and your price range is under $5 million you shouldn’t have a daily alert, but an instant alert that will email you as soon as the listing comes on. You don’t want to wait until the end of the day to get your alert. By then our 200 active agents have seen it along with 1,000 active buyers in the NY metro area and 10 people that are being transferred from the UK to NYC this week. They have all checked it out, and for a hot house, 10 buyers have alreadymade an appointment to see it. If you are a couple looking, the one working from home (where you are out of sight of your boss) should check each new listing as it comes on the market. You can even have one of your kids screen the houses if you can’t look when the houses come on.

You then need to get over to the house and see it. Don’t wait for the open house. In Greenwich, lots of our listings’ come on Mondays and Wednesdays. This is because our Realtor open house days are Tuesday for listings west of North St and Thursday for east of North St. If you can see the house before even the Realtor open house, you have a leg up on your competition. However, be ready to hear it’s SAOH, which means “show after open house”. If the new listing is SAOH, try to schedule your showing right after the Realtor open house ends. If the agents are walking out of the open house, while you, and your agent, are walking in, you are in a much better tactical position.

If you are working in NYC, and can’t get out during the week, have your agent give you a Facetime tour. These virtual tours can’t tell you whether this is the ideal house for you, but they are very useful in ruling out the houses that aren’t for you.

              Bad pricing strategies for sellers

If you are a seller, there is literally has never been a better time to put your house on the market. There is much less competition from other sellers and there are lots of buyers that are looking for houses like yours, but don’t screw it up.

Our median price is up from $1.87 million in 2019 to $2.60 million as of the end of the first quarter or an increase of 39 percent. But, just how long will this last? Interest rates are rising, inflation is sucking up money that people might otherwise spend on a new home and there is even more uncertainty about where the world is going. The result of all this is that we’ve got a very good chance of a buyer slowdown as the year goes on.

Also, even in this market, over pricing your house is a bad idea. If I had a nickel for every time a seller told me that let’s put my house at an above market price to “test” the market or let’s list it higher, so we have more room to negotiate down, I’d have two bucks, which is what these strategies are worth. The more people that come see your house, the more offers, the more offers, the higher the price. You want to go low, to end up high and the reverse is also true.

Of our 137 listings, on the market in the most pro-seller market we have ever had, 28 listing have been on for more than 1 year, 61 have been on for more than 6 months and 55% have been on for more than 3 months. In this market well priced listings can go in weeks and often in days. Pre-Covid, some agents would wait three months before proposing a price reduction. In this market, if you don’t have offers in 45 days, you need to have a long conversation with your agent, who has probably been waiting for your call.

We’re having an above average year and with more inventory, it could be another great year. Stay tuned …

How to Get the House in 2022 – When You Really, Really Want the House

I wrote an article last year about combat buying or how to be the prevailing buyer in a hot market. That article came down to basically, do your homework, be prepared and move quickly. This works well when the house that you want has just come on the market, but what do you do when you are not the first one to find the house and you are in the middle of the very hot 2022 market.

As of this week, inventory has started to shrink again after being flat for most of the year, albeit at record low inventory levels. For the first 11 weeks of the year our market inventory has stayed in a range of 145 to 158 listings. At the end of February, we were at 150 listings, each week subsequent, went 149, then 145 and this week 140 listings: a new all-time low. Amazingly, well not amazingly for any year, but this year, our contracts are up. This normally would not be amazing, because contracts normally rise in the spring market, however, this year they are going up when inventory is going down. This is clearly not a sustainable situation. Without inventory you contracts have to drop at some point.

Right now, we only have 7 single family homes listed in Old Greenwich and over $2.5 million, you have 2 choices: one at $4.4 million and one at $6.75 million.  

246 Single Family Home Sales and Contracts as of 3/23/22

140 Greenwich Single Family Homes in Inventory on 3/23/22

Extraordinary times call for extraordinary measures, when you’ve found the house that you really, really want and so have one or more or lots more people. First you need a good Realtor. There is probably no better time to have a good Realtor than when you are in a competitive bidding situation.

Let’s take a look at what you can do at each step of the offering and contract process.

  1. Interest expressed – If your Realtor tells you that other parties have expressed interest in the property it usually means that other buyers have been back more than once and/or are asking serious questions about the property such as when the roof was last replaced or how many bedrooms the septic system is approved for.

The solution when you hear that someone else is exploring an offer is to make an offer first and make it a good one.

Obviously, a high price is going to be attractive to a buyer, but don’t only focus on price also match the seller’s needs. Do they want a quick close or a delayed closing, is a lower all cash price better than a higher price with a mortgage contingency and so on? The highest priced offer doesn’t always get the deal. If you need a mortgage, and you are going up against all-cash offers, which is likely in this market; you absolutely need to be underwritten pre-approved. This means that your bank has done all the work and only needs the sales contract and an appraisal; think two weeks, versus 45 days.

If there is interest expressed this no time to make a low offer. You want to make it a high offer so that the other interested parties may decide to not even bid. You may pay a little higher than the other side was willing to go, but you may also save yourself from getting in a bidding war with two, three, or even more buyers. In a bidding war many people show their competitive nature and will offer more than they had originally intended just to “win” the bidding war. It can be a Pyrrhic victory for the victor, then again, what looks like an above market bid now, may well be a below market amount by the end of 2022 given how fast prices are rising.

  • Offer made – If another buyer has already made an offer you need to move quickly and make your own offer. You need to alert your house inspector that you may need them to do a house inspection on short notice and your attorney that they may need to turn around a contract quickly.
  • Offer accepted – If an offer has already been accepted, you are not out of the game. The rule in Greenwich is that there is no deal until the contract is signed. So, if it is the perfect house go ahead and make an offer. Submit your highest and best offer, and if possible, without a mortgage contingency. Even if you are going to get a mortgage you don’t necessarily have to have a mortgage contingency in the purchase agreement. You just have to be sure that you can close if the bank financing falls through. In an absolute worst-case scenario can you get financing from a rich uncle or is there a co-signer with good credit ready to step up. If your rich uncle fails you and you’ve signed a non-contingent, there is a good chance you are out your 10% deposit, which will be deemed liquidated damages. That’s $200,000 on a $2 million purchase. Be careful, but not too careful, unless you are happy to stay in your present rental for a good while.
  • Inspections completed – If the offer has been accepted and the other buyer has completed their inspection, your offer needs to be much better than the accepted offer. At this point the seller is mentally well down the road to selling the property to the other buyer, so your offer has to look significantly better than the offer they have already accepted. Your offer needs to meet all the seller’s requirements. For example, an all cash, quick close offer with no inspection and a significant price premium might do the trick.

Going without a house inspection is not a good idea, unless you are planning on tearing the house down or doing a gut renovation. Also, if the first buyer is moving to change the deal terms after the inspection that’s a red flag there may be a problem.

The buyer who wants to renegotiate after the inspection may, however, be a buyer that takes every opportunity to whittle down the price. Never under-estimate the fury of a seller that thinks they have been deceived. I’ve seen sellers take less money just to spite the “jerk” who was trying put one over on them.

If you are the first offeror don’t be that jerk. If you are the second offeror, be ready to move quickly if the other buyer turns out to be a jerk. Earlier this year, a buyer got gazumped, when the second buyer came in with a much higher, all-cash offer and no inspection contingency. The seller saw it as a no-lose deal. The second buyer waived the inspection believing that the house couldn’t be all that bad, if the first buyer was willing to go forward. They rolled the dice and got the house.

  • Contingent contract signed – Once a contract is signed with a mortgage contingency control of the deal shifts from the seller to the buyer. The buyer now has the ability to call off the deal if there is a problem with the financing. The seller is bound if the buyer wants to go through with the deal. Even if you are late to the game, you may have an opening if the other buyer has a financing problem or has buyer’s regret.

Buyers, particularly in competitive bid situations may not request enough time to actually get a mortgage approval. If the other buyer has to ask for an extension, the seller has the option to turn them down and accept your offer. You need to let the other agent know that your offer is a continuing one.

  • Fully executed contract – You would think that once the contract is fully executed, also known as binding, or as our MLS calls it pending, that you are out of luck, and you probably are, but people are people. If you really absolutely have to have that one particular property and price is no object you could consider paying the buyer to terminate the contract. This is very uncommon, but it can be done. Any contract can be terminated if all parties agree.

Before you start looking at ways around a contract whether a contingent or pending contract talk to your attorney. You don’t want to get involved with a tortious interference with contract claim or some other lawsuit. There are ways you can do this and ways that will almost certainly guarantee trouble.

Your best option as always is to get to the house before anyone else has expressed an interest and make a good offer first and be prepared to sign the contract quickly. If someone else got there first, show the seller that you are the better prospect and move quickly so that a third buyer doesn’t beat out both of you. Good luck!

February 2022 Real Estate – Contracts on the Rise

It’s not all that remarkable when contracts rise in the spring market. That’s what they’re supposed to do as more inventory comes on and buyers seeing the warm weather come out to buy houses. This year however rising contracts are actually pretty remarkable. Our inventory stands at only 151 listings. This is down 126 listings from February of 2021 and an amazing 362 listings from February of 2020, our last pre-COVID month.

Even with our low inventory, February 2022 was an above average month for sales with 38 sales. Our 10-year average for sales in January, pre-COVID is 31 sales, so we were up 19% over our average February. For the pessimists, they can focus on year over year date. There our sales are down 40% from February 2021 and 32% for the first two months of the year. Now normally that would be considered a disastrous collapse of the market, however, those two months last year were record months with an amazing 129 sales in two months compared to our “paltry” 88 sales year to date.

When you look at a color-coded chart of sales, our inventory is very much pro-seller with inventory down in every category, except for under $600,000 where we have one listing this year compared to zero listings last year. In fact, however under $1,000,000 we only have 9 listings. The rest of the color-coded chart looks flat or very much pro-buyer with contracts and year to date sales down for the first two months of the year. Normally, that indicates a lack of demand, however in 2022, it indicates a lack of supply.

If you go back to February 2020, our last pre-Covid month, the world looks much different with most of the cells in green in a pro-seller market. Not only is inventory down a lot, but sales and contract are about evenly split up and down.

Russ and I recently put on a house just under $5 million that was in very nice shape and it had 24 showings in three days and multiple offers. It went to contract in 8 days from coming on the market. We are just really, really supply constrained; the buyers are out there.

Now this is not to say there, you shouldn’t worry about the market. If we don’t have any gas/inventory to keep the sales engine running, sales will continue to sputter, but probably not in March.  The good news is our contracts are up significantly from last month, when we had 81 contracts, and now, we have 99 contracts. Our average sales in March are 38 houses, so with 99 contracts, we should be above average, but not near the 71 sales that we had in March 2021.

One thing to note however is that our inventory has been fairly flat for the first eight weeks of this year. What that means is that the new inventory coming on is matching our contracts. Having said that if we had more inventory, we certainly would have many more sales. This is the best time ever for a seller to put their house on the market and that’s true in every price range up to $10 million.

When you compare inventory to sales and contracts, we normally see a lot more inventory than we have sales or contracts. All the way up to $4 million, we actually have almost as many contracts and in some cases more contracts than we have inventory. It’s just a remarkable year.

if you look just at sales, we do see a little weakness above $5 million where we have 24 months of supply from $5 – 6.5 million and 36 months of supply over $10 million. The thing to look at however is months of supply when you add in contracts and for all price categories that months of supply is going down indicating an accelerating market. For the market overall we have 3.4 months of supply and when you add in contracts we are looking at a ridiculous 2.8 months of supply.

The specter of rising interest rates is temporarily accelerating demand from buyers who need mortgages and who want to get in at the lower interest rates. We also are starting to see the return of the transferee market and companies are once again moving their senior people around the U.S. and bringing in people from overseas after a long hiatus. Last week, we saw buyers from London, Australia and Dallas.

Stay tuned the first quarter is going to be a very interesting period….

GREENWICH’S GATED COMMUNITIES

by Mark Pruner

203-969-7900 * mark.pruner@compass.com

Privacy & Community & Amenities

Greenwich is lucky in that we have a variety of communities. We have duplexes in the R-6 zone in Pemberwick. We have mid-rise apartments in downtown Greenwich and a variety of condos, but what usually gets the national press are some of our largest houses, selling for prices that can get into 8 figures. We have two areas that get particular attention along these lines, Belle Haven on Long Island Sound in the south and Conyers Farm in the north that overlaps the New York border.

Surprisingly, these two large, gated communities are not the gated communities sales leader in Greenwich. Milbrook has had by far the most sales over the last two decades with 195 sales from 1999 to 2021 (which is as long as the GMLS has kept electronic records.) These 195 compare to 139 sales for Belle Haven and only 61 sales in Conyers Farm.

If you look at total sales dollar over the same period, then Belle Haven with its combination of the second highest sales number and very high average sales has total dollar sales volume of $854 million compared to Milbrook’s $440 million, which shows just diverse Milbrook housing is with homes ranging from 1,700 s.f. to 10,000 s.f.

              Our hidden away gated communities

In addition to the big three of Milbrook, Belle Haven and Conyers Farm, we have some really nice, gated associations tucked away in areas where many people don’t see them as the drive by or that are down a long road. Classic examples of the latter are Partridge Hollow in north central Greenwich and Harbor Point in Riverside. Both are at the end of long roads with manned security stations.

They provide lots of privacy and also great places to walk and meet your neighbors. I was lucky last year to represent a seller in Harbor Point and a buyer in Partridge Hollow. They are both great places to live. In fact, they are such great places that people don’t leave. Partridge Hollow has had 23 sales on the GMLS in 22 years and Harbor Point has only had 20 sales in the same period.

Part of the reason for this is that there are a lot of intra-community private sales. While many gated-community homeowners love their community, they often have their heart set on that one perfect house in their community. They let their neighbor know, that when it’s time to sell, they’d love the first option to buy. In my Partridge Hollow purchase my clients had been looking for the perfect Greenwich house for two years. Fortunately, we found the perfect community for them and closed on the private sale, before it got to market.

              Sales history

Gated communities are special and there aren’t a lot of them. Most years we have 15 to 30 sales in these communities; and then came the pandemic. In 2020, sales in gated communities jumped to 44 sales and in 2021, sales further increased to 53 sales. This was a jump of 150% in sales over the prior 10-year average of 21 sales.

The pandemic encouraged people to seek out more privacy and space, the increase in crime in NYC during the pandemic also strongly encouraged, interest in these gated communities with security gates and/or patrolling security.

Paradoxically, the outdoors amenities of Milbrook, Conyers Farm, Belle Haven and the other gated communities also drew buyers to these communities. There are probably few sports that are better for social distancing than golfing at Milbrook, sailing at Belle Haven or horse riding at Conyer’s Farm. Of course, the beach and it’s own picnic island at Harbor Point isn’t bad. Nor is a walk at Mead Point or Field Point Circle with it’s beautiful water views and no traffic to speak of.

Clearly, the club house, dining room, tennis, paddle and water views at both Belle Haven and Milbrook bring in a lot of people. They also make for a congenial crowd of neighbors from a wide range of backgrounds and nationalities. There is nothing like a couple of sets of paddle tennis, a drink afterwards and having spouses join you for dinner to make for a relaxing evening in a world that can seem very complicated. Of course, a lot of folks say that about Greenwich as whole.

              Renovations and additions

There is one issue with what might otherwise seem idyllic places; they aren’t making any more of them. The youngest gated communities are the Chieftans in western Greenwich and Conyers Farm on the New York border. Both of these “newbies” were carved out of two of the Greenwich’s great estates in the eighties, while Belle Haven goes back to the 19th Century and Milbrook was founded in the 1920s.

As a result, they both have a variety of older houses that are great candidates for renovation, which is just what they owners did at 113 Woodside Drive in Milbrook. It’s hard to believe it is the same house. The original house they purchased in 2015, sat on a wonderful lakefront lot, but was an older colonial with half a second floor and a 2-car garage stuck on the side.

The new purchasers transformed it into a Tudor, one of the traditional designs in Milbrook. They created a full second floor with extra height ceilings and four bedrooms. The first floor and lower level were totally redone and to balance out the design, a second 2-car garage was added. So far. we have had 10 showing requests and the house isn’t even officially on the market. You can stop by the public open house on Sunday from 1 – 4 pm to see the transformation yourself.

Since they aren’t making any more gated communities, it’s not a bad place to consider investing give the limited supply and high demand.

Condo Market Soars in 2021

Sales Up 24%, Inventory Down 47%

Last year was an amazing year for condo and co-op sales in Greenwich. We sold 272 condos in Greenwich in 2021 and this was up 52 sales or 23.6% compared to 2020. If you want to go back to our last pre-Covid year of 2019 sales were up 71%. Condo sales did not fare well in the early days of Covid. Buyers didn’t want to move out an apartment in NYC into an apartment-like condo in Greenwich. Buyers didn’t want the same shared elevators and hallways that they had in New York City.

As the first wave of Covid trailed off in 2020, this reluctance fell away, and condos sale picked up going from 159 sales in 2019 to 220 sales in 2020 and then to 272 condo sales last year. (In this article references to condo numbers include co-ops, since co-ops trade similarly to condos.)

              2022 sales shrink under $600K due to excess demand

Our 272 condo sales increase got no help from the lowest price range. Sales under $600,000 actually went down from 82 sales in 2020 to 74 sales in 2021. This drop in sales was not due to any drop in demand from buyers. In fact, it was excessive demand from buyers that drove down sales under $600,000. Lots of demand at our lower end, resulted in price appreciation, pushing list prices above $600,000 into the next higher price bracket.

Sales up 61% from $600K – $800K

Last year our 79 sales from $600,000 to $800,000 represented 29% of our sales, our largest percentage of any price range in 2021. As discussed above, this price category benefitted from more listing prices appreciating into this price range. Many of the sales in this price range were in Putnam Park, central Greenwich and along River Road in Cos Cob.

              Lots more inventory needed

If we had more inventory, at the lower end, we would have had more sales. Under $1 million all three of our price categories have less than 6 weeks of supply. Right now, we only have 47 condos available for sale. Of those 47 listings, only 17 are priced less than $1 million. Under $1 million represents 60% of our sales in 2021, but only 35% of our inventory.  

If you do a static analysis, then it’s hard to see how we could get to 190 condo sales under $1 million in 2021 with only 17 listings on the market now. The good news for buyers, who’d like to buy a condo in Greenwich under $1 million, is that last year we had more than 227 condo listing come on the market under $1 million. Of those listings, 190 were sold last year, another 20 are under contract now and 17 are left in inventory.

We actually had more than that, as some of the condos were listed for rent and rented before they were sold. In addition, another 19 listings under $1 million expired unsold. One condo listed for $620,000 was on for an amazing 1,196 days, before expiring unsold. The ever tighten market and increasing prices got it to contract in September 2021 in only 21 days.

It’s not just our under $1 million market where we need more inventory. The only place where inventory is not tight to ridiculously tight is $2 – 3 million where we had 16 sales last year and have 12 condos in inventory. Of course, if you want to live anywhere else but 89 River Road in Cos Cob, you’ll find the market is very tight. That address, which has some beautiful new condos represents 8 of the 12 listings between $2 and $3 million.

I have three clients that are gridlocked. They would love to buy a nice downtown condo in that price range, but we only have one listing in downtown Greenwich. Of course, if they would like to live south of I-95 there are three more choices, but they want a short walk to Greenwich Avenue and preferably not an uphill. (If anyone knows of such of a downtown listing coming on, please let me know.)

              Our high-end condo market is also tight

With the big shift of most white-collar jobs to a work from home model, our high-end sales have done particularly well. Our median sales price in 2021 was $1,052,917, so sales over $2 million are certainly, the high-end of Greenwich condo sales. In 2021, we had 31 condo sales over $2 million, with our highest sale being $4,900,000. The prior year, 2020, was also a good year for high-end condo sales with 28 sales. Compare these two years to 2019 when we had only 12 sales over $2 million and 2018, when we had 16 sales.

Part of this increase in high-end sales can be attributed to several beautiful new developments that hit the market at the right time. Of our 28 high-end sales in 2021, 8 of them were new construction. In 2020, 11 of the 28 high-end sales were new construction.

Covid really bailed out these projects, because while these were beautiful units with lots of amenities and located close to town, many were hitting the market at the same time. Much of this was a result of Planning and Zoning reducing the R-6 to multi-family zone to a two-family zone. Developers rushed to get in under the old rules, resulting in a bulge of high-end units coming on at the same time. Of course, when you are talking about Greenwich downtown condos, this “bulge” was only a few dozen units. Several of these projects could not be built under today’s rules.

              What about prices?

Our condos are spread out in multiple neighborhoods and multiple price ranges. Having said that the large part of our condo sales are within a half-mile of the Post Road, albeit, literally stretching from the Port Chester to the Stamford border.  So, take the following with a grain of salt.

As noted, before, the median condo sales price in 2021 was $1,052,917. This was up 6.3% over 2020’s median price of $990,137. In 2020, condo prices were up even more with median prices increasing 9.4%.

While mathematically accurate are those price increase representative of the market. Much of these price increases could be in the mix of what was selling. One way to check this is to look at other measures of price appreciation. If you look at price appreciation by square foot, then some of the effect of price changes driven by higher priced units, or in 2019 more lower priced units, is reduced. The price/sf price increases are similar to the median sales price increases.  

Year Median Condo Price% YoY changeMed $/s.f.% YoY changeMed. SP/Assmt% YoY change
2018 $           967,502$  4691.58
2019 $           904,872-6.5%$  425-9.5%1.55-1.9%
2020 $           990,1379.4%$  4669.6%1.571.3%
2021 $        1,052,9176.3%$  5037.9%1.665.4%

However, when you look at the change in the sales price to the assessment ratio, the appreciation is much more focused in 2021 and the drop in prices in 2019 and the increase in 2020 is not as dramatic. It looks like the much of the “price appreciation” was driven by more high-end units selling driving up the median and the price/s.f. While the price changes are not as dramatic, the price changes are in the same direction; down in 2019 and up in 2020 and 2021.

What does mean if you are buying or selling? Actually, not all that much. You shouldn’t determine your list your house based on town wide averages, nor should you make your buying decisions off these price increases. You want to check the half dozen best comps for your condo, who your competition is and what buyer demand is.

              What to expect in 2022?

Demand is likely to hold up in 2022 at least for the first half of the year. We still have lots of New Yorkers looking to move to Greenwich as commuting times are way down, when you only have to go into the office once a week. At the same time, the condo market is much more sensitive to changes in mortgage rates, so the market may shift towards a more balanced market, but it would have to go a long way to be considered a buyer’s market in 2022.

 Stay tuned, we just might get some more inventory in the upcoming spring market…

Good News! Inventory is at Record Lows, but it’s not Dropping Even More

You know you’re in a tough market when you’re actually happy, that while the inventory is at extraordinarily low levels, it’s not going down even more. We presently have 155 single family home listings on the market, this is down 46% from last year and down 66% from January 2020 one of the last pre-COVID months. The good news is that that, unlike the last six months of 2021, inventory is not in a steady decline. We have stayed above 150 listings all month (except for a couple of days which don’t count).

To use a gardening analog, we are seeing some of those early blooming snow drops, but the crocuses are still a few weeks away. The week after the Super bowl is traditionally the beginning of the spring market but if you look at the buyer demand it’s already well underway. I put on a new listing at 5 Anderson Rd at 2:00 AM this Wednesday morning and by 9:30 I had seven inquiries and two scheduled showings within 10 hours of it going public on the Greenwich MLS.

BTW: Realtor.com continues to get changes within minutes of them being made on the Greenwich MLS. They are an affiliate of ListHub, which distributes the vast majority of the IDX (Internet Data Exchange) feeds from multiple listing services. Zillow was getting their feed via Listhub sometimes, hours after Realtor.com. To get around that, Zillow actually created their own Zillow brokerage firms so that as a broker/member of each MLS, they could bypass ListHub and get a direct feed from the MLS. Of course, they were also using the Zillow brokerages in their iBuying programs and using their own Zestimates to set prices. After running up a half-billion dollars in losses, in a rising market, they figured out that was a bad idea. If you believe the Zestimate, I’m sure Zillow still has a few houses they would like to sell you.

Here in Greenwich, like the rest of the country, the work from home movement is driving a lot of buyers this way. For the moment however the real spur to buyers to move faster is the rise in mortgage rates, which are expected to go up for many months, so buying earlier can save you a good chunk of change in your monthly mortgage bill. One of my listings recently went to contract and the buyer’s agent did an excellent job of pestering me daily to make sure the contract got signed so no one else could come in and gazump her clients, but in this case, the clients wanted to get the contract filed so that they could lock in lower rates for the life of the mortgage.

While our inventory is hanging around 150 listings, an amount, that no agent expected to see in their lifetimes, at least we’re not Darien. Their inventory is up 25% in January, from 12 listings at the beginning of the month to 15 listings month. That sounds tight, but you’ve got a better chance in Darien than in Old Greenwich where we only have 8 listings on the market.

As a result, homebuyers these days are more flexible. They are not stuck on just one style or neighborhood, at least they’re not if they actively want to look for houses because otherwise all they can do is to keep refreshing their screen waiting for a new listing to come up on realtor.com. Actually, that’s not quite true. A good buyer’s agents are out there actively seeking out houses for their clients.

If you’re a homeowner and haven’t gotten a couple postcards asking you to list your house or an agent’s letter saying that the agent has a client who is interested in your house, you should feel slighted. (NB: Take these ready buyer’s letter with a large of grain of salt. The buyer may not be all that ready or on occasion may not even exist. You may be better off talking to agent that you trust, and they can talk to that agent. It’s always good to have someone on your side.)

There are some early hints that the market might be changing. When you look at how this year compares to last January and to January 2020, we may actually be seeing a little price resistance under $3 million. The two price ranges where we saw the biggest drop in sales were $1.0 – 1.5 million and $2 – 3 million. Both price ranges are down 6 sales from 2021 or -38% and -50% sales drop. The price range where we’ve seen a significant jump in contracts is $4 – $5 million where went from 7 contracts in 2021 to 13 contracts this year. Then again this could just be random chatter in sales and contract numbers.

Clearly, if we had more inventory, we would have a lot more sales. From $1.0 – 1.5 million we have 3 weeks of supply. The one area where that may not be quite so true is over $10 million. In that price range, our months of supplies including sales and contract is up from 11.5 months of supply last year to 25 months of supply this year., I wouldn’t worry too much however as this big increase is due to going from 5 sales and contract to 2 this year. Just under the ultra-high end we went from a hot 7.5 months to a very hot 4.8 months, when you include contract. Think about that, we would blow through our 21 listings from $6.5 – 10 million in less than 5 months.

You should always be a little skeptical of January numbers, my brother, Russ, never even did a market report until the end of February, but Beth won’t let me do that. Another problem in a hot market is that traditional real estate statistics don’t necessarily show what is causing the change. You can’t really say for certain, whether sales are down because of lower inventory or because of buyer price resistance due to double digit price increases the last couple of years.

For the moment, you can be pretty sure that it is low inventory is causing the sales drop, however, rising interest rates may become a bigger factor in a slowdown later this year. Rising interest rates often the Fed fighting rising inflation rates, which may encourage people to move money from cash into real estate.

We’re also getting reports of excellent bonuses on Wall Street. In the good old days, those were paid out in cash and people were signing purchase contracts in January and closing in February. Now that compensation maybe deferred to the second half of the year and granted in company stock rather than cash, our biggest months for high-end sales are now in the fourth quarter.

We’re going to have to be patient at least another month to see which way the 2022 market is heading. Inventory is down, which is choking off a lot of sales but we’re not seeing what we saw in December where stellar demand led to sales increases even as inventory continued to drop. We are seeing the snowdrops from an early market showing up keeping inventory at least flat. If you look at Caesar Rabellino accompanying lists of sales and new listings, you’ll see that last week we had 25 new listings and 19 sales. It’s been a while, since we’ve seen a week where the number of new listings coming on exceeded the number of sales going off.

That’s exactly normal in the spring market, inventory comes on in February and March. Deals get made in April and May and our big sales months are June and July. This year we’re getting a little more early inventory, which is really heartening. I, and some other agents, were actually concerned that we might have burned through all of our inventory. But the nice thing is there are still houses is to be listed, deals to be made and certainly the buyers are here and ready to pay a premium. It’s possible that prices may not go up quite as fast as it did the last couple of years, it’s hard to sustain double digit annual price increases and they are not good for the long term health of the market.

Stay tuned, the first quarter is going to be interesting to see which of these trends has the greatest influence on the housing market.

2022 Guide to Westchester County and Fairfield County Luxury Real Estate Market

Similar Markets with Remarkable Differences

by Mark Pruner

You might think that with the common issues of high demand and low inventory facing the luxury markets in all the high-end towns in Westchester and Fairfield County, that the market in each town would be similar. However, we see large differences among these towns, all of whom have median sold prices over $1 million.

We have been bemoaning our lack of inventory of inventory in Greenwich all year, but compared to Darien, we have a major surplus of inventory. We have 152 listings on the market, Darien has 12 single family homes on the market which works out to 10 days of supply.

We also have marveled at how many of our houses have gone for full list price or over list but among the high-end towns in Westchester and Fairfield County we’re actually at the bottom with only 41% of our listings going for full list price or over list. Compare this to the Sound Shore Communities in Westchester County. In Larchmont, Mamaroneck, Rye and Rye Brook 57% of the houses sold for list or over list with one of them actually going for 44% over the initial asking price.

We were quite pleased with our 11% median sales price appreciation, however, Westport had 18% price appreciation. The one place where we clearly were the leader is our 16% sales growth in the number of single-family homes sold in 2021 compared to 2020. We had 1,006 sales compared to last year’s 864 sales: more about this later.

Similar Issues

Across the country, COVID has initiated the reshaping of the housing market. The pandemic led to a huge increase in work from home and the associated increase in the demand for larger homes. For most of 2020 and 2021, we saw extraordinarily low interest rates that kept monthly mortgage payments low. Less talked about is the run up in the stock market and it’s effect on housing demand. There’s nothing like having a bunch of gains in your stock portfolio to make you think that now might be a good time to buy a house and reallocate some assets, in case the stock market goes down.

Inflation has also encouraged house buyers to move assets from cash that is devaluing into hard assets that are appreciating. They also want to buy, before prices go up further. We’ve seen a jump in sales in December and the first part of this month as mortgage rates go up, presaging the Fed’s announced interest rate increase in March.  

The common wisdom is that increased interest rates slow the economy and over a long enough period of time that’s certainly true, particularly if you sharply increase interest rates in a short time. However, in the short term, the anticipation of increased interest rates and the initial portion of rising rates only drives sales as people move to quickly buy before interest rates go even higher. We’ve certainly seen that in last two months as what is normally a very slow holiday season in December saw lots of people out looking and that has continued, and even heightened, in the new year.

          Inventory, Supply & Demand

For towns that had inventory in 2021, we saw big jumps in sales. For towns that didn’t have inventory, sales dropped or just inched up over 2020. Westport and Darien actually saw the number of single-family home sales drop in 2021 compared to 2020. In Westport, sales were down a remarkable 13%, but this drop was due to insufficient supply, not low demand. The biggest drop in sales also resulted in the biggest jump in median price, up 18% in Westport to $1,599,500 last year. Where inventory was the lowest relative to demand, we saw prices go up the most.

New Canaan was the one exception to lower sales, higher prices. In New Canaan, prices increased by 23% and sales increased by 13%.  The price increase bumped their median price to $1,725,000 and sales to 440 sales, not bad for a town of less than 20,000 people.

It’s gotten so bad that months of supply don’t really tell the story; we are now looking at days of supply. New Canaan, with only 49 active listings has only 39 days of supply at last year’s torrid sales price, it will be interesting to see what happens this year. In Connecticut, Greenwich also saw nice increases in sales numbers and median prices, just not to New Canaan’s level. Both these towns have the highest median price with a fair number of houses at the very high end. While sales at the high-end jumped last year, we still had good inventory to keep the sales numbers chugging along.

When you look at the Westchester towns, Scarsdale and the Sound Shore Communities of Rye, Rye Neck, Mamaroneck and Larchmont all had double digit increases in their 2021 sales numbers and single digit increases in their 2021 median price. They also had; well, you really couldn’t call it good, but certainly better days of supply than in other towns. Scarsdale and the Sound Shore Communities have 60 and 54 days of supply.

Northeast Westchester, which includes the towns of Rye Brook, Harrison, Armonk and Chappaqua, our nearest Westchester neighbors, saw a big jump up in median price, which was directly related to a small increase in the number of sales caused by very limited inventory. What’s curious is that the two area in each county that are the furthest from New York City, Northeast Westchester in NY and Westport in CT, are the ones that saw the least growth in sales.

It looks like Northeast Westchester, Darien and Westport all saw major saw major increases in 2020 which wiped out much of the shadow inventory. Also, the work from home movement meant that these towns were less inconvenient, i.e, they had shorter weekly commuting times as people no longer commuting every day. As a result, these areas were more attractive to more buyers.

          List, Over-List and Multiple Offers

Throughout all the towns, we saw houses going for full list or over list from 41% in Greenwich to 58% in Westport and 57% in the Sound Shore Communities of Westchester. Demand is not easily is not easily quantifiable, but these numbers show that the demand is out there. Every agent I’ve talked to, has stories of new houses coming on the market and getting anywhere from 25 to 70 appointments in the first couple of days. You hear stories of having so many offers that the only way to keep track of them is with a spreadsheet.

Clearly, there is lots of demand and at the lower price levels under $1,000,000 or even $1,500,000 is where competition is the fiercest. In Greenwich, we only have 14 listings under $1.0M, and only 6 more, if you go up to $1.5M. From $1.5M to $2.0M, there are eleven more listings for a total of 31 listings under $2,000,000. We see similar shortages of affordable houses throughout the area.

          Inventory vs. New Listings in a Hot Market

Today’s hot housing market is driven by new listings. Looking solely at inventory can be a little deceptive for two reasons. First many new never get counted as active inventory in monthly report and certainly not in the quarterly report. You don’t get to 1006 sales in Greenwich or 866 sales in Northeast Westchester without a significant number of new listings coming on and going off.

Greenwich, with its 152 listings, stands out among all of the towns. Greenwich is more like a small city with multiple neighborhoods, multiple price ranges, a population of over 63,000 people and 22,000 plus housing units. Even with these 152 listings at the present pace of sales seen last year, we only have 54 days of supply which is similar to most of Westchester. East of Greenwich, the days of supply drop. Westport has 42 days of supply; New Canaan has 39 days and Darien only has 10 days of supply.

Now, this days of supply does not mean that we are going to run out of houses to sell. New listings will come on to replace sales and even in this market houses that are priced above market rate and particularly, if they need work, can still be tough sales.

Over $5 million, even newer houses can stay on the market for a while. Our median year built for all sales in 2021 was 1961. The median year built for houses that are active on the market over $5 million is 2004 and the median days on market 240 days or 8 months. Our market at the high end, and particularly those high-end houses in back country and midcountry are doing much better than in 2019, but over $10,000,000 we are still looking at 13.7 months of supply. This is the same price category that only a couple of years ago we were looking at months of supply measured in years.

What’s the new year going to bring?

The short answer is I don’t know, and I tend to be concerned about anybody who says that they do know. If we assume that interest rates are going to go up, we should have a short burst of sales. Presently we have 29 sales in the middle of January and our ten-year average for January is 35 so despite this incredibly low inventory we will very likely be above our 10-year average for sales by the end of the month. If interest rates increase significantly, they may well cut into sales as our lower inventory is doing now. Increasing interest rates will also likely switch some money from stocks to bonds, potentially resulting in lower demand for stock and hence lower stock prices. Higher interest rates will also push down bond prices lessening the wealth effect.

With stock prices down, bond prices down and interest rates up, you would expect that demand will drop, however interest rates are likely to below particularly compared to inflation. Even some softening in buyer demand is unlikely to result in a major correction given the lifestyle shift caused by work from home which looks to persist even after the pandemic.

On the flip side, after two torrid years of sales, lots of folks who had been thinking about downsizing or upsizing may have already done so. Downsizers often move out of the area or switch from houses to condos, while upsizers are more of a zero-sum game. Their purchase of a larger houses reduces inventory, but their sale of their older house adds a listing back to inventory.

Also, a thank you to my fellow Compass agents, Heather Harrison in Scarsdale, Peggy Jackson in the Sound Shore Communities, Kori Sassower in NE Westchester, John Bainton in Darien, Christine Saxe in New Canaan, Laurie Morris in Westport and Michael Ferraro online for their statistics and insights in their markets. I, however, am responsible for any misstatements, mischaracterizations or just bad conclusions. Lastly, we can never discount, the black swan events and the emotions of the market.

Stay tuned it’s going to be a fascinating market.

Greenwich Real Estate 101 – Introduction

Greenwich, CT has a lot of neighborhoods and nuances. Here is an introduction to Greenwich neighborhoods and Greenwich real estate statistics. Click on the

The Town of Greenwich

People
63,500 people
60% married
33% with children under 18
Median age is 43
23% Foreign Born
Real Estate
$30B Grand List
22,271 total housing units
66% single family houses
Taxes $8,400/$1M
Zoning from 0.17 Ac. to 4 Ac  
2021 Sales (GMLS)
1,007 House Sales
272 Condos & Co-ops
777 Rentals
39 Land Sales
1,000 agents
Click the link below for the basic of Greenwich real estate statistics and Greenwich neighborhoods.

Mark Pruner, Compass, Greenwich, 203-817-2871, mark.pruner@compass.com

Every Neighborhood in Greenwich Does Even Better than in 2020

Well Almost All

For just about every neighborhood, and every statistic in every neighborhood, 2021 was an amazing year. We had total sales of over $3 billion and this was up 31% over what was at the time a record setting 2020. Our sales were up $718,204,338 over 2020, in increase in dollar sales that is more than most towns total sales.

What’s really remarkable about that 31% increase in sales volume is that our number of sales were up only 17%. We had 863 sales in 2020 and were up 143 sales in 2021 to 1,006 sales this year.

Townwide, 2020 was a good time to be a seller as we were up in every category, except for those categories where being down is pro-seller. Our average sales price was up 12% and our median sales price was up 11%, while our days on market were down 40% from 205 DOM in 2020 to 124 DOM in 2021, i.e., on average houses were on for almost 3 months less last year over the year before.

Scattered around the table comparing neighborhoods this year to last year there are a few stats that moved in the buyers’ direction, but nearly everyone is just statistical noise in neighborhoods with small numbers of sales. If you take out North Mianus (11 sales), Pemberwick (16 sales) and Banksville (5 sales) just about every statistic was up. The only significant exception was number of sales in backcountry, but more about that later.

When you draw a line through the sales for each neighborhood by year, it’s looks like a Ralph Cramden quote, “Too the moon, Alice.” Cos Cob, backcountry, Old Greenwich and South of the Parkway were all neighborhoods where total sales volume were up by a lot. In mid-country sales volume was up by almost a quarter billion dollars.

We are getting these big jumps in sales volume for two reasons. Our total number of sales are up, and the average price is also up. Combine those two things and get these big jumps.

When you look at the number of sales in each neighborhood, you only have one factor pushing the numbers up. In just about every neighborhood, our sales were up: by 15% in mid-country (aka South of the Parkway) and up 26% in Cos Cob our biggest gain for our larger neighborhood. Also, all our smaller neighborhoods, who have lower average prices, saw dramatic jumps in sales. Pemberwick’s sales were up 78% going from 9 sales in 2020 to 16 sales in 2021.

As mentioned above the one area that saw a drop in sales, (besides North Mianus where sales went from 13 sales to 11 sales) was backcountry. There sales fell from 102 sales in 2020 to 92 sales in 2021 or a drop of 10%. As noted above a 22% jump in average sales price per s.f. more than made up for this small drop with total sales dollars up in backcountry.

The natural thing is to think that high-end sales are dropping in backcountry, but townwide sales from $5 – 10M were up over 100%, so it’s going to take more slicing and dicing to figure out the details of what is up and down in backcountry. One thing that is definitely down is inventory dropping from 49 listings at the end of 2020 to only 37 listing at the beginning of this year.

Going forward inventory is going to determine how we do this. To be more precise, it’s not inventory, but the number of new listings. We were at record low inventory almost every week last year, but we still set a record for sales. You are looking for a new neighbor, now might be a good time to encourage your neighbor to list their house. They’ll get a good price, and you’ll get a new neighbor. 😉