A tidal wave’: New Yorkers snapping up CT homes as they flee the city – Greenwich Time – (MP quoted)

Greenwich Time

Alex Soule has a well-written article in the Greenwich Time about folks from New York City not only renting, but also buying in New York City. You can just click the article link, New Yorkers snapping up CT homes as they flee the city to read this story. Alex quotes me about the woman on Park Avenue that was looking to rent $25K/mo house in Fairfield County, because she was afraid to get in the elevator given the number of positive tests in her co-op on Park Avenue in NYC. Alex also quotes me on the 4 types of showings that we are doing now: traditional with gloves and mask, window peeping tour. agent led virtual tour and online 3D tours or videos.

The article points out that sales were down slightly in Fairfield County in April, but sales are expected to recover in April. Berkshire Hathaway’s president, Candace Adams, also observes that not only rentals, but sales are also going in a flash. (I just closed a land deal in Greenwich that took 4 days to get to contract and 8 days to close for an amazing 12 days from first showing to closing.) Candace notes that the Connecticut shoreline east is looking good in the towns from Madison to Mystic.

As you can read in the article below, Connecticut has a great opportunity to reshape it’s image and Alex’s getting the story out of what’s happening is good reporting.

 

Greenwich Neighborhood Report – Real Estate Sales Accelerating as More Families Flee NYC

,Last week we looked at the overall Greenwich real estate market and the thing that stood out the most was the dramatic drop in inventory. At a time when inventory should be picking up, we are looking at the same number of listings that you see at the end of winter. This week we only have 523 single family home listings, up 2% from last week, but down 25% from last year.

 

This week, what stands out is the dramatic jump in transactions. We are seeing more buyers in the market and as I said before, anyone that is looking to buy a house in a pandemic is a motivated buyer. Our showing are still down, but our transactions continue to increase. Last week we had 23 transactions; (sales and contracts) up from 20 transactions the previous week.

This week we saw are sharp acceleration in transactions with 33 sales and contracts. On Tuesday I had two showings and a lease got signed. During the week, I’ve had multiple inquiries on listings on which clients had already accepted offers.  Most of the agents that I speak with say they are busy but deals in a pandemic can be both harder and more difficult and sometimes easier. For the cash buyer deals can go very quickly. My backcountry land deal closed on Friday 12 days from the first showing, which is a record quick closing for a residential sale for me.

On the other hand, deals involving mortgages are getting more difficult. Some of the big national banks have tightened up their lending requirements. Wells Fargo had already dropped their loan to value ratio last year in Fairfield County. (This is a problem of a big national bank who treats New Fairfield, the same a Milford ,and the same as Greenwich. Counties are about as granular as they can get. ) Other regional and local banks continue to lend, so it’s an important time to have a good mortgage broker who can steer you to the bank and the product that is best suited for your situation.

Single Family Home Sales and Contracts in Greenwich, CT as of 5/14/20

Sales blue, pending contracts yellow, contingent contracts green

 Our biggest sale of the year, 54 Byram Drive in Belle Haven just sold for $17 million. Up until this week our highest sale had been $6.5 million at 19 Brookridge, so this sale was very welcome news. We also have two other listings at $13.9 million and $8.6 million waiting to close. Our high-end market is slow, because these folks already have another home that they can go to. I’ve heard of apartment buildings in New York City that are two-thirds empty as people go to their vacation home, their kid’s place or even their mother-in-law’s place. (Of course, it helps to have a nice mother-in-law as I do.).

 

The Neighborhoods

April 2020

Section

Inventory Sum of List Prices  DOM Number sold Mos of Supply  Sum of Sold Price
Byram 8  $     9,708,300 122 2 16.0  $ 4,425,000
Cos Cob 47  $   78,115,900 227 15 12.5  $ 17,445,500
Glenville 22  $    26,182,900 223 5 17.6  $ 5,598,000
North Parkway 81  $  421,512,500 369 13 24.9  $ 27,272,500
Old Greenwich 57  $  151,015,999 138 25 9.1  $ 50,390,356
Pemberwick 4  $      3,194,000 91 3 5.3  $ 1,935,000
Riverside 57  $  232,792,500 189 17 13.4  $ 36,897,500
South of Post Road 63  $  424,962,500 283 12 21.0  $ 24,825,000
South Parkway 171  $  755,941,400 296 41 16.7  $107,784,198
Grand Total 513 $2,108,249,749 262 135 15.2  $278,278,054

Backcountry

Last year backcountry Greenwich had a good year with sales up 30%. Its percentage sales increase was even greater than Old Greenwich. Most of this growth was focused in the $1 – 3 million range as young families looked at what they could get in Riverside or OG and what they could get in backcountry and a bunch decided having 4 acres was really nice.

This streak is continuing for backcountry this year as sales in the first third of the year are up 18% to 13 sales from 11 sales last year. I expect that backcountry will continue to do well as post-Covid people are going to want even more land. At the same time listings in backcountry are down 26%. I’ve got all three of my listings in contract. So if you live in backcountry and are thinking of selling please give me or another agent a call, we need more houses to sell and the buyers are out there.

Mid-Country

The place we are really seeing an increase in sales is “South of the Parkway” as the GMLS calls mid-country and all the way down to the Post Road. There sales are up 46% from 28 sales in the first third of 2019 to 41 sales this year. For those folks that want land, but don’t want to be too far from town, mid-country may be it.

Apr19 vs Apr. 20 Inventory Sum of List Prices  DOM Number sold Mos of Supply  Sum of Sold Price
Byram -4 $(24,717,100) -37 -1 0.0 $2,636,000
CosCob -6 $  (6,520,099) 31 4 -6.8 $1,320,650
Glenville -4  $ (18,984,100) 27 0 -3.2  $  917,000
North Parkway -28 $(133,096,382) -18 2 -14.7 $(22,764,850)
Old Greenwich -29  $ (70,459,501) -35 2 -5.9  $(7,670,804)
Pemberwick -2 $   (2,388,000) -72 3 5.3  $ 1,935,000
Riverside -26  $ (14,151,590) 0 6 -16.8  $ 14,209,678
South of Post Road -6 $   11,503,500 106 -2 1.3 $(14,262,600)
South Parkway -69  $(285,053,421) 27 13 -17.6  $ 29,189,160
Grand Total -180 $(552,713,942) 19 27 -10.5 $ 5,559,234

 

Riverside & Old Greenwich

Last year, Riverside was in the doldrums, while its sister neighborhood, Old Greenwich was up. This year sales in OG are up 9%, while sales in Riverside are up 54%, albeit off a smaller base. Riverside went from 11 sales in 2019 to 17 sales in the first third of 2020. Old Greenwich, on the other hand, had a very respectable 23 sales in the first four months of 2019 and gained 2 sales to 25 sales through the end of April this year.

Pemberwick & Byram

The southwest section of town traditionally does well, because it is where you find our best values and where you have seen some of our greatest appreciation since our last revaluation in 2015, they also are small areas. We’ve seen a combined 5 sales here so far this year, which is up 2 houses from last year. What folks in this part of town are likely to see next year is a big jump in taxes as their increased values mean they will be a bigger part of the Grand List will likely take on a bigger share of the town’s budget obligations.

            Cos Cob

Cos Cob is neighborhood, where I spend lots of holidays at my brother’s house. It had the greatest fall in sales last year. Partly, this was due to robust growth in prior years. This year sales are back with a 36% increase over a bad 2019. So far, we’ve seen 15 sales in Cos Cob up from 11 sales in the first 4 months of 2019.

 

Summary

Overall,  our average sales price is down from $2.52 million to a paltry $2.06 million or a drop of 18%. (Of course, most towns aspire to be this paltry.) But don’t panic, the large drop in the average sales price is mostly due to poor sales at the high-end. We are going to see big changes this year, it all depends on just how long the virus hangs around. We’ve got a good chance at having a very good year as a few million New Yorkers try to jam into our fair town. The question is will they have enough money if the economy doesn’t recover quickly.

 

 

 

 

 

 

 

 

 

 

Greenwich Real Estate April Market Report

The Covid virus finally caught up with the Greenwich real estate market, but so far not in a very bad way. The market doesn’t need to be intubated; it’s more like when you have fever and the doctor tells you to go home and monitor your symptoms. The present prognosis is that things will get better in the coming months, but the health of the market bears close watching.

April 2020 Single Family Home Stats for Greenwich CT

As of 5/2/2020 Inventory Contracts Last Mo. Solds Last Mo Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 5 2 2 4 4 6 3.8 3.8 2.5
$600-$800K 21 6 2 8 11 17 5.7 5.6 10.5
$800K-$1M 25 4 3 7 11 15 6.8 7.5 8.3
$1-$1.5M 46 16 7 23 33 49 4.2 4.2 6.6
$1.5-$2M 70 19 3 22 19 38 11.1 8.3 23.3
$2-$3M 108 24 13 37 31 55 10.5 8.8 8.3
$3-$4M 80 16 1 17 15 31 16.0 11.6 80.0
$4-$5M 50 3 1 4 6 9 25.0 25.0 50.0
$5-6.5M 36 2 0 2 5 7 21.6 23.1 #DIV/0!
$6.5-$10M 40 2 0 2 0 2 #DIV/0! 90.0 #DIV/0!
> $10M 32 2 0 2 0 2 #DIV/0! 72.0 #DIV/0!
 
TOTAL 513 96 32 128 135 231 11.4 10.0 16.0

Surprisingly, one of the things that makes the market less robust now is how good sales were in the first quarter of the year. Up until the third week in March, our sales and contracts had been doing much better than in 2019. These sales and contracts meant that houses were going off the market. In a normal year, these listing would have been more than replaced with new inventory in our spring market. However, just as new listings should have been accelerating the virus restrictions hit and people decided to hold off on listing their house and we even had 10% of the owners who had publicly listed their house take their homes off the market.

If you take those 52 listings that have been withdrawn and combine it with over 100 new listings that didn’t happen you end up with a 26% lower inventory or 180 fewer listings. At the same time, our year-to-date sales are still up 25% over 2019. That sounds like good news and it is, we are doing better than last year in sales to date. Our market is better than last year’s depressed market caused by tax restrictions in the Tax Cut and Job’s Act. If, however, you compare our sales this year to our ten year average our sales are down 11.7% for the first four months of the year.

April 2020 vs. April 2019 SFH Stats

The drop in inventory and the increase in sales over 2019 has resulted in huge drops in months of supply. From $2 – 3 million we are down 9.7 months of supply to only 13.9 months of supply from 23.7 months of supply last year. This drop of three quarters of a year in months of supply is mainly due to having 40 fewer listings on the market; 108 listings rather than 148 last year, and with a little help from having 6 more sales this year from 25 sales last year to 31 sales this year. The result is that in one of our most popular price ranges, when a buyer starts slicing and dicing the market, by their desired neighborhood, type of house and amenities, we don’t have nearly as many choices as we normally do.

From $5 – 10 million we only have 76 listings compared to 111 listings last year at this time. That’s the good news for high-end sellers. The bad news is that 2020 has not been a good year for sales in the high-end with only 5 sales over $5 million dollars compared to 8 sales in 2019 and 14 high-end sales in 2018.

Our highest sales so far this year is for $6.5 million, however, we do have 6 contracts pending above $5 million. Of those 6 contracts we have list prices of $21 million, $13.9 million, and $8.6 million. So, what we may be seeing is the law of small numbers which says you don’t need to be too worried in the short term if you only need a couple of sales to restore the market.

For the entire month of April, we had 32 sales down slightly from our 35 sales last year, but significantly down from our 10 year average of 47 April sales. The drop in overall sales was essentially across the board, though we did a few less sales in the $3 – 5 million range, once again showing that we are seeing less demand in the upper half of the market. This may be due to our older buyers, who have higher net worths, being more careful, given that the consequences from getting the virus are worse for older age groups.

The market does continue to move along with 20 transactions, sales and contracts last week. This is, nearly the same as the 21 transaction we saw the week before. For me, I had another accepted offer this week to make the third week in a row with an accepted, all of which have been in backcountry Greenwich. As backcountry has come back, I’ve concentrated more of efforts in backcountry, so these results may be more personal to where I’m focusing my efforts and hence are purely anecdotal. You’ll have to wait until next week, when I’ll do my neighborhood report to see what the numbers say about which areas are actually up.

What I can say is that for me, and other agents I’ve talked to, people are now asking for backcountry and mid-country properties with more land. I took out a great couple to see houses in the $1.5 to $2.3 million range over the weekend and they only wanted to look at 2 and 4 acre properties. This interest in larger lots is different from last year, when backcountry sales were up, but most of this was due to the fact that many backcountry properties were selling at bargain prices. At that time, many buyers were still seeing extra land as an extra expense rather than being the desirable attribute that it is for today’s buyers.

For the month of April, 44% of our inventory was between $1 and $3 million dollars, but a surprising, 72% of our sales were in that same price range. We also have 62% of our contracts in that price range, so that segment should continue to see good sales in May.

 

High-end rentals, over $20,000/month, continue to do well with high-end summer rentals with pools doing particularly well. Many of these new tenants are actually using these rentals to see just what living in Greenwich is like before making a decision about buying a house here.

Every day brings changes in how the virus is progressing or recessing. As a result, crystal balls are even cloudier than normal. At the moment, there are several trends that bode well for our market in the second half of the year.

Lastly, thank you to everyone that is out their on the front lines battling this pestilence and particularly to my niece who just graduated medical school early so she could take a position in the ICU at a NYC hospital that only handles COVID-19 cases. Let’s all pray for all of these folks who put their lives on the line every day to save others and keep all of us safe.

Greenwich Rentals: The Rush to the High End – What can you get for $60,000 per month

Andrews Farm Road Listing for $60,000 - Listed 4/30/20

Andrews Farm Road Listing for $60,000 per month – 1 year or more – Listed 4/30/20 (see below for more info)

The COVID-19 virus has turned the Greenwich rental market on its head. We have seen the demand for lower-end rentals fall while the demand for high-end rentals surge. Much of this change in demand is due pandemic motivating New Yorkers to get out of their city apartment into larger homes, that are larger than we have seen in the past. The result is some extraordinary rental prices for our premier houses, but more about that latter.

                Overview of the 2020 Greenwich Rental Market

The COVID-19 pandemic is driving both the high-end and the low-end, but in opposite directions. Below $4,000/mo, our rentals are down. Below $2,000/mo you are looking at accessory apartments, studios and 1-2 bedroom condos, i.e. something that looks very much like the rental market in much of NYC, so demand has dropped. Below $2,000/mo we have no single family home inventory and have not had a house rental under$2K since 2017.These units don’t give folks the social distancing that today’s motivated NYC renter is looking for.

All Greenwich Rentals from 2007 to 4/27/20 by Price Range

Price Range 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Anlzd  10 Yr Avg
0-1999 140 132 202 227 157 129 113 108 103 89 96 86 71 17 53 118
2000-3999 270 302 375 357 333 276 317 262 301 327 311 357 354 97  303 320
4000-5999 116 142 177 148 161 152 174 160 153 159 174 147 169 52 162 160
6000-7999 55 75 79 93 84 85 74 83 81 86 107 99 99 39 122  89
8000-9999 41 40 46 55 54 46 47 46 57 42 47 55 57 26 81  51
10000-11999 20 32 21 22 23 40 33 22 27 32 36 35 38 17 53  31
12000-13999 10 6 14 12 23 13 21 19 20 25 20 18 23 11 34  19
14000-15999 8 15 14 19 16 7 16 15 17 15 16 20 16 8 25  16
16000-17999 2 4 9 8 7 14 6 6 8 14 14 14 7 9 28  10
18000-20000 8 9 8 6 7 10 11 5 6 8 16 11 11 11 34    9
>20000 14 8 14 15 10 11 11 13 15 12 17 17 18 21 66  14
Grand Total 684 765 959 962 875 783 823 739 788 809 854 859 863 308 961 836

 

 

From $2,000 to $4,000 apartments and condos still dominate with only 71 house rentals out of 354 total rentals in 2019. From $4,000 to $6,000 per month apartments and houses are evenly split. The house share of rentals continues to increase as you go up in price and once you get to $14,000/mo all the rentals are single family homes. But, that is market share. If you look at the market as whole, the large percentage of our rentals are from $2,000 to $8,000, which represents 61% of the market this year so far and was 72% last year before COVID-19. This market is always active with listings coming and going every week.

Our overall rental market also has a marked seasonality with rentals peaking in May a month earlier than house sales, which peak in June. Rentals are also less peaky than house sales with a decent market throughout the year. You can still rent a property in January, just not as easily as you can in May. Rentals also stay on the market for a much shorter period of time. So far this year our median days on market for a rental is 68 days, while it is 182 days on market for house sales. With rentals if you don’t see what you want just wait a little bit another new listing will come along soon.

This year we are on pace to set a record for rentals. As of April 27th, we have had 308 rentals. If you annualize that number, you come up with 961 rentals compared to 863 rentals last year and a 10-year average of 836 rentals. Nearly all that growth will be from the rental of single family homes. However, the one thing you can be sure of in this ever changing COVID-19 driven market is that just as our January market didn’t look like our April market, our 4th quarter market is going to be different than today’s market.

The Single Family Home Rental Market

  • Big jump in rentals
  • Under $6K down though
  • Up overall, particularly over $14K/mo
  • Over $20K/mo 21 rentals more than we had all last year, up 378% annualized

This year our single family home rental market looks different than any prior year. House rentals are on pace to be up 50% over 2019 with an annualized 471 house rentals compared to a 10-year average of 374 house rentals. (Please take these annualized numbers with a large grain of salt. It is just a way to compare this year’s different trend with last year’s rentals.)

We started out the year with a fairly normal January and February, then came March and the COVID-19 shelter in place requirements and the house rental market took off.

Not only was the home rental market more active, but the prospective tenants that were out there wanted bigger houses, more land and shorter rental periods. If you had a smaller house, then we saw lower demand. We actually saw a drop in house rentals from $2,000 to $6,000 (and as mentioned before we no longer have any house rentals under $2,000/mo.) This lower range is usually in heavy demand.

The higher you went in price the bigger the price change. From $8,000 to $10,000 single family rentals were up 23%, while above $20,000 per month our house rentals were up or 378% on an annualized basis. If we had more inventory, we would have many more rentals above $20,000.

Single Family Homes Price range 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 as of 4/27  2020 Anlzd 2020 % vs 10 yr avg
$0-1999 3 4 10 6 7 4 2 4 3 2     – -100%
$2000-3999 66 93 136 115 103 80 77 58 61 64 48 65 63 15  47 -36%
$4000-5999 78 88 127 110 111 92 102 98 97 102 101 80 90 26  81 -17%
$6000-7999 45 61 69 73 66 71 54 66 66 72 79 74 73 26  81 17%
$8000-9999 37 35 41 44 46 44 41 44 45 34 39 45 48 17  53 23%
$10000-11999 20 29 20 19 20 34 28 18 22 28 27 29 26 12  37 49%
$12000-13999 7 5 12 12 22 12 18 17 19 19 19 14 18 6  19 10%
$14000-15999 8 15 13 16 12 6 15 15 17 13 12 19 15 8  25 78%
$16000-17999 2 4 9 8 7 12 5 4 7 13 13 13 6 9  28 219%
$18000-20000 7 9 6 6 7 10 10 5 6 8 14 11 10 11  34 294%
>$20000 14 8 14 15 10 10 11 13 14 12 17 17 18 21  66 378%
Grand Total 287 351 457 424 411 375 363 342 357 365 371 367 367 151 471 26%

Presently, we have 199 rental listings, but only 25 of those are for $20,000 per month and only 6 of those houses are on for more than $40,000 per month. This new demand for high-end rentals is also reshaping what some Realtors business. I was showing a prospective tenant a house for $40,000/month and my client asked one of our top brokers a question about the rental and the agent replied, “I’m sorry, I don’t know, I don’t traditionally do rentals”.

I rented a house for $25,000 per month in March and we had 5 offers in a day and a half, two at full list price. The very nice woman who had made the losing full price offer lived in a beautiful Manhattan co-op on Park Avenue. I asked her why she was willing to pay $25,000 per month for a house she had never visited. She said, “Every time I get in our building’s elevator even if it is empty, I feel like I’m risking my life and my children’s lives.”.  These folks are also really getting cabin fever and want to escape the confines of their condo, co-op or apartment to our beautiful open spaces.

                Andrews Farm New Listing

To see what the ultra-high-end looks like check out the new listing that Jill Marchak and I put on in the Andrews Farm association. This stone Georgian is in top condition, with 6 bedrooms, 8 full and 3 half baths. It has all of the amenities that today’s renter who have to shelter in place are looking for. It comes with a well-equipped home office, a large gym, a game room with lots of activities and a home theater.

You can see the aerial of this property at the top of this post. Outdoors the gardens are extraordinary and very peaceful and will be in full bloom in the next couple of week. In the back you will also find two koi pond one with a waterfall. The backyard also has a large heated pool, with a spa, and two accessory buildings. With the weather warming, the tenant has a full outdoor kitchen for cook outs and to enjoy the longer days. It’s the kind of place for someone looking for an escape from the city on its 4.2 acres of space in backcountry with the privacy you would expect from a gated community.

As with most of the real high-end rentals, it is available to rent for a 1 year minimum term and is listed for $60,000/mo. You can have it either furnished or unfurnished.

                Trends & Action Items

Clearly, high-end rentals are growing, particularly short-term rentals. With May just around the corner many of these renters are looking at extended rentals through Labor Day. The other thing we are seeing is that many of the families that are looking at short term rentals are also considering buying in Greenwich and using their rental is an exploratory mission base.

For those that are looking to rent, particularly a short term high-end rental you have a lot of competition and not a lot of choices. One rental that is on for over $50,000 per month has 12 people on a waiting list including several well-known names. Now is not the time for a tenant to get overly demanding. Despite the high rental price, this often comes down to one family renting to another family. Making a lot of demands for what you want before you move in will immediately move your offer to the bottom of the list.

Another thing we see at the upper-end is that the tenant often sends the standard GMLS lease to their New York attorney who sends it back with 20 suggested changes, some downright onerous. Such “offers” are DOA. A $50,000 a month rental is $600,000 per year and is worth having an attorney examine, but if you are looking to do a deal get a Greenwich attorney who knows what works and more importantly what doesn’t work in Greenwich.

If you have a house to rent, particularly over $10,000/mo you are looking at very good demand and limited inventory. Please give Jill Marchak or me a call at 203-969-7900 or email me at mark@bhhsne.com.

February was a pretty normal rental market; March was not and April had it’s share changes; you can expect even more in May. It’s an especially good time to have an experienced agent who knows about another $85,000/mo rental that is coming soon.

All Closed 2020 Rentals in Greenwich, CT as of 4/27/20

                           All Closed 2020 Rentals in Greenwich, CT as of 4/27/20

GREENWICH REAL ESTATE AFTER THE PANDEMIC – The Benefits of Xenophobia & Is Nesting Dead?

The COVID-19 pandemic is a sea change event for the world and for the Greenwich real estate market. We will have a B.C. market, before COVID-19 and an A.P. market, after the pandemic. The change in our market may even be greater than that wrought by the Great Recession.

I moved here in 1967 and it wasn’t until the Great Recession that we saw the Greenwich real estate market turned on its head.  The Great Recession brought on what I call the nesting phenomenon in Greenwich. No longer was a huge house on a large tract of land on a cul-de-sac in backcountry the ultimate house. Post-recession people wanted live to closer to town and transportation. They wanted to be part of a community where they could see people walking by on the sidewalk in front of their house and their neighbor’s kids in the back behind them. The result was increased values in Old Greenwich and Riverside and decreased values in backcountry and mid-country.

There is a very good chance that this pandemic will kill the nesting phenomenon and bring a new normal, A.P. that in some ways is reminiscent of what we saw in the 20th Century.

I.        The Pandemic, Renters and Lower Property Taxes

So far, the pandemic has had its greatest effect on rentals and particularly short term rentals. Lots of New Yorkers want to get out of the city to a safer place. Most of them see this as a short-term housing issue and would ideally like a three month rental, but this attitude as evolved this month. As we get further into April many of the prospective renters are saying let’s make it a full summer rental with an early start. Many renters are now looking for 5 month rentals and staying in Greenwich through Labor Day.

The short-term renters maybe able to help lower our property tax rate. They will be a major factor in how our real estate market will do in the A.P. world. They are the ones that are going to tell their friends what kind of reception they got in Greenwich and whether their friends in NYC should be looking in Greenwich.

I wrote an article back in 2018 proposing a “Greenwich card” that would let residents use all of our facilities; beaches, tennis courts, the golf course and our libraries all with just one card rather than the balkanized system that we have now. This summer would be a great time to package all of our cards into one for summer renters and let realtors or landlords apply for the package. Right now, the first thing rather than make the first thing a tenant do. People coming to Greenwich for the summer don’t want to stand in line at Town Hall and the Eastern Greenwich Civic Center.

Many of these summer renters will buy in Greenwich and likely in mid-country and backcountry. This would be a great way to add back value to our Grand List that has disappeared in north Greenwich. More of these people buy the lower the taxes for everyone.

II.      Greenwich the New Sweet Spot for Second Homes

The pandemic has exacerbated the animosity that some people in rural areas have for people who own vacation homes. In Nantucket the locals call them wash-a-shores, though usually with a smile on their face. In other parts of the country there is no smile. To see a blatant display of this, check out a Buzzfeed article entitled, “This Pandemic is Not Your Vacation”. The writer who lives in Montana blames the spread of the coronavirus on wealthy people from the cities relocating to their vacation homes. She says, the rich don’t only bring the virus with them, but they “often don’t work at all”, don’t honor social distancing, have a “sense of entitlement”, “are not respecting locals” using all the local Internet bandwidth and eat up the limited food supply, and are “overwhelmingly white”.

This article is clickbait, a Buzzfeed specialty. It is designed to get lots of clicks, forwards and social media posts. Clickbait emphasizes an “us” versus “them” mentality. Instead of uniting people and emphasizing an “all in this together” mentality it emphasizes division. In this case, what the article is saying is that wealthy, white, New Yorkers should stay home and die quietly in their Manhattan co-ops. (Okay, that last sentence was click-bait, but it does illustrate a growing issue in many vacation areas, that this .) As Dr. Fauci said, this pandemic will not end like turning off a light switch, we are going to see continued restrictions for months and even into next year. Some vacation homes in these rural communities may not feel so “vacationy” this summer.

A good point that the article’s author does make is that these rural areas do not have the medical facilities to handle a major COVID-19 outbreak. This is another area where Greenwich shines. We have a great hospital. I want to thank all the doctors, nurses, staff and volunteers that keep it that way. They have done an excellent job of handling this crisis. Our hospital will give Greenwich a major leg up in an A.P. world.

And, my favorite reason to live in Greenwich is a recent study published in the International Journal of Environmental Health and Public Health, that “found a strong correlation between low exposure to nature during childhood and higher levels of nervousness and feelings of depression in adulthood.” So, if you don’t want your kids to have a lifetime of depression that are better off in Greenwich. (OK, that was clickbait too.)

III.    What’s next

The consensus among most agents here in town is that we are going to see a good second half of the year. The first quarter of this year saw sales, contracts and rentals significantly above last year. Even March sales during the pandemic were up 29% over March 2019. For April, the number of transactions flattened last week, but houses sales are still happening.  In the first 17 days of the month we have had 17 sales spread fairly evenly throughout the town. This compares to 34 sales for all of April last year.

We will likely see better sales in mid-country and backcountry as people want more space. With luck, and some proper marketing, we may also see the return of our 20th Century pattern of people buying weekend house that they use year round and occupy full time in during the summer months as they commute into the city. We could see a revival of the term “summering in Greenwich.”

I also expect that we will see buyers looking at local healthcare as a factor in deciding where to live. (It would be great if Greenwich Hospital had a tour for prospective home buyers.)  Not only has Greenwich Hospital done well with handling the COVID-19 crisis they also have excellent maternity care. (One of the questions on admittance is, “Would you and your husband like steak or lobster for your post-partum meal?”)

IV.    The Environment for Sellers and Buyers

Interest rates are low and both buyers and sellers are motivated. Buyers are looking for houses outside of the hot zone and can buy with low financing costs. Sellers have the uncertainty of knowing what is happening in the future and many want to get deals done now.

If you are a seller, now is a good time to talk to your real estate and financial advisors. About a quarter of my time is spent discussing with people what they should do, whether to wait or list. For the pessimist, or as the like to be called, the realist, who see the market going down, now is the time to list. Before real estate I was in the petroleum business and the rule for oil drilling companies is when times are bad sell your rig now, because you will get even less in the future.

For the optimist, who sees demand and prices going up, a major question becomes will we see a return of “the house as an investment asset” its use as way to diversify assets. Much of what drove the housing bubble were sellers buying more house than needed because of the double digit appreciation they could get on the additional investment. We may well see, house prices increase, this year and next if demand is great enough, but is that a reason to hold the asset waiting for additional appreciation. We are in an economy where many assets have single digit returns, but thinking to hold on to your house, because of any expected double-digit appreciation in the future may well result in a long wait.

 

So, we almost certainly see major, and potentially long-lasting, changes in our market this year and next year. If we as a town take a proactive approach, we can make what happens better. A V-shaped recovery could leave us even better off than last year. Even in a more prolonged downturn, we might see sale rise as we are a small oasis in a large metropolitan area. Let’s pray for everyone and especially those people on the front lines.

Mansion Global Looks at future of New Yorkers moving to Greenwich post-COVID-19 (MP quoted)

Virginia Smith has a good article in Mansion Global, As Wealthy New Yorkers Flee the City for Suburbs, Will the Exodus Be Permanent? It discusses what is happening in the New York Suburbs. As Ms. Smith mentions Greenwich sales are up for the 1st quarter and for the month of March. (Contracts are are up and deals are still being done.) This increase in sales is nice change from 2019 when the combination of the $10,000 SALT tax cap and the reduction of the mortgage interest deductibility resulted in lower home sales in Greenwich. Despite COVID-19, sales and contracts are doing better 2020 than in 2019. Interest rates are down, NYC buyers are more motivated due to the virus and in the perfect storm, Greenwich sellers are more amenable to doing deals as the future is uncertain.

The question is what happens A.P., after the pandemic. As I say in the article, the general consensus is that we are going to see a surge in sales as these factors encourage buyers to pull the trigger. One additional benefit Greenwich now has, that wasn’t a significant factor, before COVID is Greenwich Hospital. Greenwich has an excellent and large hospital that is affiliated with Yale-New Haven. It has performed well in the pandemic. Before the pandemic, second home buyers didn’t really consider the size and quality of local medical facilities. Going forward having a well run medical facility will likely be a factor in where home buyers locate.

Stay tuned, we live in interesting times . . . .

GREENWICH 1ST QUARTER 2020 – HOME SALES, CONTRACTS & RENTALS UP

Greenwich had a much better 1st quarter for home sales this year than we had in the 1st quarter of last year.

                Sales & Contracts Up

As of 3/31/2020 Inventory Contracts Last Mo. Solds Last Mo Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 6 2 0 2 2 4 9.0 6.8  –
$600-$800K 23 7 4 11 9 16 7.7 6.5 5.8
$800K-$1M 25 5 5 10 8 13 9.4 8.7 5.0
$1-$1.5M 53 17 10 27 25 42 6.4 5.7 5.3
$1.5-$2M 62 15 2 17 15 30 12.4 9.3 31.0
$2-$3M 103 28 7 35 18 46 17.2 10.1 14.7
$3-$4M 78 12 2 14 14 26 16.7 13.5 39.0
$4-$5M 48 1 1 2 5 6 28.8 36.0 48.0
$5-6.5M 42 3 2 5 5 8 25.2 23.6 21.0
$6.5-$10M 39 2 0 2 0 2  – 87.8  –
> $10M 29 2 0 2 0 2  – 65.3  –
                   
TOTAL 508 94 33 127 101 195 15.1 11.7 15.4

 

Our sales were up 36.5% in the 1st quarter from 74 sales last year to 101 sales this year. The coronavirus caused a slight dip in transaction in the third week of March, but transactions came back last week. For the month, we had 33 sales up from 27 sales in March 2019. This an increase of 22.2% despite the coronavirus and contracts are also up. We ended the quarter with 94 contracts waiting to close compared to 67 contracts at the end the first quarter in 2019 for a Y-o-Y increase of 40.3%.

                Inventory Down

One area that clearly has been affected by the coronavirus is inventory. Last year at the end of the quarter we had a 608 single family homes in inventory and this year we only had 508 homes available as of the beginning of April. Many homeowners are  keeping their houses off the market. Many owners just don’t want people in their houses right now. Also, without public or realtor open houses traffic is down, but the buyers that are out there are serious buyers.

Our inventory is down by 100 listings and that is pretty much across the board all the way from $800,000 up to $10 million inventory is down as fear has no price range. On the sales side, our sales are up by 27 houses for the quarter and that is also nearly across the board. Sales are up from $600,000 all the way up to $6.5 million. Above $6.5 million we did not see a sale so far this year compared to 3 sales last year. We do have 4 contracts at the high-end and this compares to only 3 contracts last year.

High-End Sales Shifted to 4th Quarter

For the glass half-empty types, this shortage of high-end sales in the first quarter is seen as a sign of a weak market, and there a little truth in that. What it is more indicative of is the way Wall Street awards bonuses and the timing of purchase. Before the recession, Wall Street firms and Greenwich hedge funds used to give out large cash bonuses early in the year. The result was a spike in high-end sales in February and March giving Greenwich a nice glow for the rest of the of year.

Now bonuses are given out later in the year and often in restricted stock that vests over several years. The post-recession result is that the peak for high-end sales has shifted to the September to November period. I wouldn’t start worrying about a “weak” high-end market in the first quarter, when it’s just as likely a typical post-recession temporal shift.

                Showing Houses Carefully

Realtors that are willing to show houses are taking precautions with everyone wearing gloves. Some agents will make the house ready for showing and stay outside while the buyers and their agent go through the house. Social distancing is very much the rule.

                Rentals Up, Particularly Short Term Rentals

We are also seeing an explosion of rentals, which are up 44% over last year. Rentals went from 68 in the first quarter last year to 98 rentals this year. We normally only have a handful of short-term rentals, but with the coronavirus short-term rentals are way up, particularly at the high-end. Snowbirds are staying in Florida and people with second homes are heading out to those places. A bunch of these folks have made their houses available for folks that want to get out of NYC and it’s not just in Greenwich. This week, I’m putting on a 12,900 s.f. house in Westport for a 2 month rental at $25,000 per month. We already have two showings scheduled, before we can even get it listed.

                Comparing 2020 to a “Normal” 2018

If you’ve read this far you might think things are pretty rosy in Greenwich real estate and in many ways they are. The issue is the year over year comparisons. Last year was not a good year for Greenwich real estate with sales down 11.3% in 2019 compared to 2018. In Greenwich, unlike in the Westchester County, our sales drop due to the $10,000 cap on SALT taxes was delayed by a year. Westchester cratered in 2018 as our sales went up 4% that year. This unusual 2018 sales increase was partially due to the BET freezing tax rates in 2018 at 2017 levels. By 2018, the impact of the Tax Cut and Jobs Act income and income and sale tax deduction limitation caught up with us.

If you compare first quarter of 2018, when our sales went up, to the first quarter of 2020 you see the same sales 101 in the first quarter of 2020 compared to 102 in the first quarter of 2018. March sales were about the same with 33 sales in 2020 and 35 sales in the first quarter of 2018. As you might expect inventory was higher in 2018, a time when most people outside of Greenwich Hospital had never heard of a coronavirus.

Bottomline, the coronavirus effect has essentially balanced out sales to a normal year. Fewer people are looking, but a larger percentage are buying. With inventory down and sales up our months of supply is also down from $600,000 to $6.5 million and the same when you add in contracts. While not a tight market it is a competitive market.

                May You Live in Interesting Times

What will happen going forward is anyone’s guess. No one alive today has ever experienced this type of global pandemic and we don’t have medieval real estate records for the Black Plague. The last time something like this happened in the U.S. we were in World War I.  If the virus peaks in April and declines, we may well see an even better rebound in the second half of the year. If it hangs on, we could be up, we could be down. Stay tuned.

 

Escape from New York: City dwellers fleeing coronavirus are flocking to Connecticut – (MP quote)

Hartford Courant

Jesse Leavenworth of the Hartford Courant has a good article surveying how short-term rentals are doing in Litchfield County, along the Connecticut shoreline and in Fairfield County. (I got quoted about the Fairfield County activity.) It seems rentals are busy just about everywhere in Connecticut. For the year so far Greenwich rentals are up 44%. High end rentals are going particularly fast.

House Hunting in a Pandemic

Even while you are sheltering in place you can do a lot of house hunting and you probably should. There is nothing like being cooped up in your home for a whole week and more for you to start thinking about all the things that bother you about your house, condo or apartment. Is this really the best place for you today and in the coming years? If your lives have changed, now may be a good time to start the process to change you abode.

So, what can you do from home? First, figure out what you don’t want. What types of housing do you not want, a downtown condo or a big house on the shore. I suggest deciding what you don’t want because it can be hard to figure out what exactly it is that you do want.  Also,  don’t forget you can fix up or change your present location. (And, what better time to do it than now, when you are at home anyway. I hope my wife doesn’t read this part.;)

Assuming that fixing up or expanding your present house is not your first choice and you’ve excluded what you don’t want you might want to talk to your banker or investment adviser about what you can afford. I find buyers are often surprised at what you can afford, particularly with a 90% mortgage or with non-traditional financing. Many different types of financing are at record lows.

Next think about what types of neighborhoods appeal to you. Since you are at home, now’s a good time to call up some friends in that neighborhood and talk them about what they do and don’t like about living in their neighborhood. You might even consider a Zoomtails neighborhood search party. At my house each night of quarantine we get on a video conference call via Zoom with various friends and family. The calls are a blast, you get to talk to friends and family, face to face, from anywhere in the world for free and you actually feel like you’ve been to a party or a family reunion afterwards.

Now you can look at some specific houses without being overwhelmed with the multiplicity of choices. Also, you are not looking for the right house in the wrong neighborhood.

For many folks, the next step is go to one of the big two websites, down from the big three, now that Trulia has merged with Zillow. I personally prefer, Realtor.com rather than Zillow, but that’s mostly because Zillow is a nightmare to deal with for Realtors. Getting data corrected on Zillow can take me, my marketing and tech departments days to get corrected. Zillow’s Zestimate is also often very wrong, but lots of people lover it. So much so, that Realtor.com came up with their own value estimate. Take them all with a large grain of salt.

You also have to be awake for lots of other misinformation on these sites. Sometimes they will tell you the nearest public school is in Rye or Armonk other times the square footage is just wrong. Having said all that, there is lots of good information on these sites and don’t forget the company websites like bhhsne.com and raveis.com. They each try to develop their own useful tools, which may be just what you need. For example, my company Berkshire Hathaway, just rolled out Virtual Visits, a way to just search for houses that have a virtual tour.

Which brings me to another way not to visit a house. Last year, I had a great family from Kansas that was looking to move to Greenwich, but were only going to have a weekend to look at houses and decide which one they wanted to make an offer on. Before they got here, we narrowed it down to three neighborhoods. Next, we went over the same listing on their computer and mine so we were looking at the same thing. We narrowed down the choices and I would go to the house and call them on Facetime for a walk them through the house. They could ask me to zoom in to one area or step back for a broader view.

This year, I would do the same screening using Zoom and it’s desktop sharing feature so we were both looking at the same image at the same time. One feature that is particularly useful when sharing is Bing Map’s bird’s eye view. Type in the house address at maps.bing.com and then right click the house and select “View Bird’s Eye”. Then click on the arrows around the compass to rotate to different 45 degree views of the house and neighborhood. (At one time when you did this for my house you could seem me taking the dogs for a walk.) You can also do this with Google Earth, but it’s a little distorted.

Back at your present house, if you bought a flat screen in the last 4 years, there is a good chance you can plug your laptop into your big flatscreen TV and put the computer screen on your huge flat screen TV where you can pick up a lot more details. (You can also try to “cast” the screen to your TV wirelessly, but I couldn’t it with an iPhone and a Sony. It seems the two companies don’t play together well.)

Real estate has been deemed an essential business, so we are still working, some of us harder than before. Showings may still be a possibility depending on the buyer, seller, the agents and the rules de jure from the state, town, company and MLS. Of course, this is lot easier when the house is vacant.

Once you are serious about buying, if you are going to use a mortgage it can be very helpful to get underwritten pre-approved. This means you go through the whole approval process, not do just a quick pre-qualification letter where they review your credit. With a true pre-approval all you need is the appraisal and you can close in under a month, which can be a big advantage in negotiating.

If you’ve got the time the info is out there. You might as well have a leg up on the competition by being full prepared with financing and information.