CONDOS & CO-OPS: A KEY PART OF THE 2020 GREENWICH REAL ESTATE MARKET

Condos have been quietly playing a bigger and bigger role in Greenwich. In 2012, condos were only 22% of our market, by 2017 they had soared to over 36% of our residential market. Since 2012, they have continued each year to be over 30% of sales compared to single family home sales. Condos this year have done about the same as last year. However, the mix of what is selling has changed. In this Covid era, we are seeing more sales of townhouses and fewer sales of apartment style condominiums.

As of 5/31/2020 Inventory Contracts Last Mo. Solds Last Mo Solds+ Contracts  YTD Solds  YTD+ Contracts Mos Supply Mos w/ Contracts Last Mo. Annlzd
< $600K 31 7 6 13 29 36 4.3 4.7 5.2
$600-$800K 25 8 4 12 12 20 8.3 6.9 6.3
$800K-$1M 14 1 1 2 7 8 8.0 9.6 14.0
$1-$1.5M 17 6 0 6 6 12 11.3 7.8
$1.5-$2M 14 0 0 0 1 1 56.0 77.0
$2-$3M 16 3 0 3 5 8 12.8 11.0
$3-$4M 10 7 0 7 2 9 20.0 6.1
$4-$5M 2 0 0 0 0 0
 
TOTAL 129 32 11 43 62 94 8.3 7.5 11.7

So far this year we have 62 sales of condominiums and co-ops. (All condo references and numbers in this report include co-ops as they trade almost like condos.) As is true of most years, these sales are concentrated under $600,000. For many people condominiums are an affordable way to get into the Greenwich housing market and for downsizers are a way to stay in the Greenwich that they love. The other thing we’ve seen in the last few years is the growth in new higher end condominiums, those priced above $2,000,000.

As of the end of May, we had 129 condominiums on the market. Our median list price was $985,000 while our medium sales price was $612,500. We had listings from $75,000 all the way up to $5 million. (OK the $75,000 listing was actually a boat slip but it’s legally a condo, though we don’t have the housing boats in Greenwich as you see in places like Sausalito, California. Our lowest real condo listing is priced at $199,750.) On the sales side our lowest sales price so far this year is $248,000 while our highest sale so far is $3.2 million.

Like houses we have a certain seasonality to condo purchases. Over the last 10 years, condo sales tend to peak in June, however they do not drop off as much in the fourth quarter. The first quarter also does  have rising condo sales, but it is not as steep as we see for single family homes. The result is that condo sales are spread throughout the year. Also, given the smaller number of sales the graph tends to jump around month to month much more in condo sales.

Condos as you would expect sale for a little less per square foot than houses , but not that much last. Our house dollar per square foot is around $500 per square foot whereas the median price for condos is $450 per square foot. This is even more remarkable when you consider that the price per square foot for a single-family home obviously includes the land cost too. The reason that we’re seeing such high prices is that condos are often sit on some of our most valuable land. They are located usually within a half a mile of the Post Rd where land prices or higher and are often in downtown areas where prices are even higher.

You see a concentration of condos as you would expect in downtown Greenwich, but we also have a fair number in Pemberwick and in Old Greenwich. What many people may miss is that Chickahominy just west of downtown Greenwich has a bunch of relatively new condos at the end of streets off of Hamilton Ave.

8 View St. #5, listed 6/11/20, $1,199,000

I’m listing one of these condos this week at 8 View Street , the street across from the Two Door restaurant and Bella Cucina. This is a 3300 square foot unit with a two-car garage and even its own  small yard which is unusual for a condominium. It has a large balcony with winter water views of Long Island Sound. This 3 bedroom, 2 1/2 bath condo is listed for $1,199,0000.

That condo is on the larger size for Greenwich. Condo sizes vary from studios at 585 square feet to large town houses at close to 5000 square feet. Our median condo size is around 1,500 s.f.  On average, our condos stay on the market for 141 days and we have about a 7.5 months of supply of condos. The lower the price, the lower the months of supply we have.

In 2011 we only sold 128 condos in Greenwich however by 2015 the market had recovered strongly, and we sold 210 condominiums. Since then we’ve been roughly around 200 condominium sales a year. Last year, in 2019, was a slower year for both houses and condominiums, as we only had 159 condo sales and only 526 house sales. Last year was the year that the Tax Cut and Job Act with its limitation on mortgage and property tax deductibility really cut into the Greenwich real estate market.

This year the condo market, like houses, started off the year doing well. The last two months things have slowed down with the Covid virus. We are seeing good interest from buyers looking to get out of New York City, particularly in those condo units that don’t share common elements, such as elevators and hallways, with the other units. Townhouse style condos are very popular.

When you look at months of supply, we have a competitive market all the way up to $1.5 million. We have a big jump in months of supply from $1.5 to 2 million as we have a bunch of new condos coming on in that price range. At the very high end, over $2 million for condos, we have a bunch of new condos whose prices are challenging previous highs particularly when you look at the price per square foot. These units are going to contract, many are waiting for C.O’s before closing.

Overall, our condo market is an important element in the diversity of Greenwich. Many of the smaller towns in Fairfield County have only a very small percentage of condominiums. One of the great things about having the number of condos that we have is that people who want to downsize to a more maintenance-free lifestyle don’t have to leave town to do so. We also see many of these downsizers become snowbirds and spend winters at houses in Florida and other places and come back for summers in Greenwich.

As we recover from the Covid virus, condo sales should rebound. We have 32 contracts waiting to close or more than half of the sales we have seen so far this year. We are also seeing a fair number of people from New York looking at condos in Greenwich. For many of these New Yorkers, the question may be a condo in Greenwich or a small house in Stamford or Norwalk.

Families tend to go for the smaller houses, though you actually see a surprising number of children at certain condo complexes, whose parents prefer the Greenwich schools. Couples tend to like the condos over houses and also like being closer to their jobs in New York City. As in the past few years, condo sales will likely be around a third of our market this year.

Condos are one of the things that make Greenwich Greenwich and maintain its vitality and they are an important part of our real estate market.

GREENWICH REAL ESTATE MARKET STAYS BUSY IN MAY 2020

Greenwich Owners Buying in Greenwich Adds to Covid Buyers

May was a good month for sales in a pandemic. All the late reporting sales are in, and we had 54 sales in May compared with 56 sales for May 2019. The good news is that we have exactly the same 108 contracts this year as last year at this time.

As of 5/30/2020 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 6 8 4.2 4.1 2.5
$600-$800K 18 5 3 8 14 19 6.4 6.2 6.0
$800K-$1M 28 6 2 8 13 19 10.8 9.6 14.0
$1-$1.5M 57 14 14 28 47 61 6.1 6.1 4.1
$1.5-$2M 73 23 8 31 28 51 13.0 9.3 9.1
$2-$3M 122 26 15 41 47 73 13.0 10.9 8.1
$3-$4M 95 19 7 26 22 41 21.6 15.1 13.6
$4-$5M 46 4 1 5 7 11 32.9 27.2 46.0
$5-6.5M 45 4 1 5 6 10 37.5 29.3 45.0
$6.5-$10M 48 3 0 3 0 3 104.0
> $10M 32 2 1 3 1 3 160.0 69.3 32.0
 
TOTAL 569 108 54 162 191 299 14.9 12.4 10.5

These contracts show that the market from $1.5 – 4 million is doing particularly well. What had been the hot market, and still is when you look at how little inventory we have, is the $1 – 1.5 million market. In that market we only have 57 listings down 17 listing from last year. At the same we have sold or have under contract 61 houses in only 5 months. This equates to 6.1 months of supply. Generally, under 6 months’ supply is considered a seller’s market. Also, generally our lowest months of supply are at our lowest price range, but right now that 6.1 months of supply from $1 – 1.5 million is actually is even less than the 6.4 months of supply that we have from $600,000 – $800,000.

May 2020 vs. May 2019

 

What’s hot

Overall, we have had 186 sales of single family homes this year up 21 sales from 2019 when we had only 165 sales. Our sales are up, or about the same as last year, all the way up to $6.5 million. As noted above sales from $1 – 1.5 million have done particularly well with an increase of 12 sales or a gain of 36% over last year. The other two price ranges that have shown nice gains in sales is the $600 – 800K range where sales are up 56% from 8 sales to 13 sales and also the $5 – 6.5 million price range where sales are up 100% from 3 sales YTD in May 2019 to 6 sales this year.

                What’s not

Anytime you see a big gain in one particular price range you should take a look at the price ranges just above and just below. If all of them are up, you have a strong price trend and you can be reasonably sure that you are seeing a real change in the market year over year. Unfortunately, this is not the case for the $5 – 6.5 million price range. Sales from $4 – 5 million are down 22% from last year from 8 sales to 6 sales.

If you then go the other way and go up in price range, sales from $6.5 to $10 million dollars are down 100% which sounds a lot more dramatic than it is. Down 100% means no sales this year compared to 4 sales last year.  We do have 3 contracts waiting to close from $6.5 to 10 million. (BTW: Another issue when numbers are small is just what price ranges are picked and the exact beginning and end of the “month”. I use $6.5 million as a dividing line, because roughly half of our listings between $5 and 10 million are below $6.5 million (45 listings) and half are above $6.5 million (48 listings)).

So, is the high-end weak or is it just market segmentation? Unfortunately, the market above $6.5 million is weak as we only have 1 sale so far this year above $6.5 million. The good news is that it is a $17 million sale. We also have a total of 6 contracts above $6.5 million while inventory is down 10% above $6.5 million, Even when you throw in lower inventory and add contracts you are looking at over 8 years of supply from $6.5 million to $10 million and almost 7 year of supply over $10 million. My law of small number does say that a couple of sales and additional contracts will mean a drop of years in the months of supply, but we will need more than a handful of sales for this market segment to start looking healthy.

               

             Why is the high-end weak?

The question is why is the high-end is looking weak when we have good activity in the rest of the market. The short answer is no one can say for sure, but I was talking with a couple of other brokers and all three of us kind of felt the same thing. At the high-end people already have a couple of houses and are not seeing the same pressure to “get out of Dodge” as the New York Times called it. The potential high-end buyers already have a nice place outside of Dodge.

The thought among these agents that high-end owners are more able to take a wait and see approach. While the stock market says it’s unlikely to happen, there is some concern about a major depression next year, so low-yield government bonds look better than real estate so high-end buyers are keeping their powder dry.

                Are Greenwich buyers getting out ahead of the surge?

Overall sales are up 12.7% for the year with most of that increase happening pre-Covid. Post Covid sales are bumpy week by week. The common wisdom is that most of the buyers are families from NYC and we are seeing a lot of that. (I had three buyers referred to me this weekend.) What is interesting though is that I had 5 transaction in May, two sales, two contracts and a rental. In the case of the buyers, all four of them were from Greenwich and all were up-sizers. A couple of other brokers said they were seeing the same thing with Greenwich buyers being a bigger factor in the market in mid-country and backcountry.

Many folks in Greenwich watch the real estate market very closely. Some of our smart, and hopefully prescient, local citizens see this as a window of opportunities for buyers. Mid-country and backcountry have seen declines the last couple of years, but there is a good chance that is turning around this year. For mid-country and backcountry, buyers are getting these houses at last year’s prices and making some good deals. For sellers that are worried about a second great depression, they are flexible on pricing and doing deals now rather than waiting. The result is good sales in a pandemic.

The Greenwich buyers that are out there know what they want and can move quickly when they find it. My listing at 7 Dempsey sold in 11 days from showing to closing on Friday, 5/29, breaking my personal best from the previous week of 12 days from showing to closing.

                How Covid is changing the housing market

We are seeing the trend of buyers looking for more land and social distancing continuing. The other trend that we are seeing are people wanting more on-site amenities. Pools are big, wine cellars are of interest and game rooms are also popular. This might even bring back interest in home theaters, often the least used room in a house.

                Condo sales up and down

On the condo side, sales look flat, but it’s because two types of condos are balancing each other out. Sales of townhouse style condos, without shared hallways, are up, while apartment style condos with elevators are down. Covid giveth and Covid taketh when it comes to real estate.

               The coming surge: More buyers and More inventory, hopefully

It looks like we will be getting our spring market in June and given the large number of folks from NYC looking the market may continue into what is a traditionally a slow August. If many traditional vacation sites are shut down or quarantining, we may see more stay-cations and more buyers house hunting in what would be a slow month. If you are thinking of selling please call me or another agent, we still need more listings, since we are down 23% from last year.

 

The 2.0 Guide to Successful House Hunting in the Covid Pandemic

The goal in house hunting in a pandemic is to see as few houses as possible. While it is always a good idea to do your research beforehand, in a pandemic the less you expose yourself, the less likely you are to be a victim.

The easier way to house hunt

There is an easy way and a harder way to find the right house and many people elect to take the harder way. The easier way is to get a real estate agent involved early in the process and let them do a lot of the work for you. The harder way, which actually seems to be the way that most buyers under 40 take, is too do all the research yourself and then once you’ve identified a house call the listing agent rather than getting your own agent.

For buyers, having an agent represent them is usually free, since the sales commission for both brokers is paid by the seller. The one exception is when the seller hasn’t listed the property with their own agent, such as a for sale by owner or an owner who hadn’t planned on selling and that owner refuses to pay a commission. If a buyer doesn’t want to pay a commission, they can simply tell their agent don’t show me any off-market properties where I would have to pay a commission. This is not a big a hardship as it sounds, as the huge majority of house that are available for sale are publicly listed.

The ideal way to do things is to do your own research and work jointly with your agent. He or she can send you some good options and guide you as to what areas may be best suited for you and your family. You personally can look at a variety of things that the agent might not know you want in a particular house or neighborhood.

How to do an efficient house search

But, what can you do to determine what should you look at and more importantly what shouldn’t waste your time on?  I always think of the catch phrase; location location, location, however each of these locations are different and require different approaches. The first location is what town or neighborhood do I want to live in. You shouldn’t be looking at random houses that you like in three different states in the New York metro area. Figure out what towns you like and concentrate on those towns. The second location is what part of town and what street do you want to live on. The third location is the house itself do you like how it is located on the lot and the street.

The Greenwich Association of Realtors just debuted their new website for buyers and sellers at http://www.greenwichrealtors.com. It has a buyer’s guide and a seller’s guide and an overview of each neighborhood in Greenwich and the listings in that neighborhood. It’s worth checking out if you haven’t been there before. (NB: I was on the GAR advisory committee on the design of the site. It is much more useful than the old site.)

Another good way to narrow your choices is to figure out what you can actually afford. If you need a mortgage now is a great time to go out and talk to your banker or mortgage broker to determine just how much you can afford. Before the Great Recession, many buyers would try to get the maximum loan, with lowest downpayment and the biggest house on the largest lot that they could afford. The idea was that real estate always goes up so that this was a great way to leverage an investment.

In these uncertain times, that isn’t necessarily the best idea. Keeping something in reserve is a good idea.

On the good side, uncertain times can lead to lower interest rates as they do now, when low mortgage rates are making purchases more affordable. Also find out from the bank what it would cost and how long it would take to get underwritten pre-approved. This means the bank has gone through all the steps necessary to give you the loan, except for the house appraisal. Being underwritten pre-approved gives you significant negotiating advantages, because the mortgage approval period goes from 45 – 60 days to a couple of weeks.

Finding the right neighborhood

Once you have your loan amount, see what houses have sold for in the neighborhoods that you are thinking about. Hopefully, the sales prices and your financial capabilities match-up. Online pictures are good, but take a drive through those neighborhoods you are thinking of living in and look at the sold houses and the active houses to make sure that neighborhood works for you based on what you can afford. Traditionally, the best time was a weekend when lots of folks were home. Now you can go just about any day as lots of folks are home.

Look not only at houses but take a drive to the train station or highway you would commute on. Drive to the local shopping area where you would do most of your shopping. When looking for shopping don’t be bound by state or town boundaries. The nearest shopping center may be in the next town or even the next state.

If schools are an important part of your house hunting, you need to determine which school districts work for you. If, however, you’re looking at private schools you need to check and see what kind of admission requirements, tuition fees and waiting list there may be for any particular school that you’re interested in. With private schools you generally can live anywhere.

So now that you have picked the neighborhood(s), the number of houses you need to sift through is much smaller. Many people like Zillow, I personally prefer Realtor.com. Particularly in a busy market it is the major site that gets the listings the quickest.

Finding the right house

Your agent can forward you the listings right from the GMLS, where you know the information will be accurate, particularly as to public schools and you can now find them at greenwichrealtors.com. Also have your agent set up an alert with your particular parameters, so you know when anything comes on and equally important any time a house is sold, so you can see today’s sales price.

When you’re looking at the listings, focus on those aspects of house that are important to you. Do they have enough bedrooms? Do you like the floor plan? Is the lot relatively flat with nice yards ? Also look at the history of the house how long has it been on for. (NB: Most histories involve how long it’s been on that particular site and they may not match up with the days on market that the GMLS has.) What’s been the pattern of price reductions if any? This is a good time to rely on your agent to send you stuff since here she or he knows the market better than you do.

Try not to obsess too much over one factor. Realtors have an expression that “Buyers are liars.” We don’t actually mean that, but it rhymes and is easier to say than, “Buyers often can’t articulate everything they want and occasionally see a house that is outside their stated parameters and really like it.” Don’t however use this as excuse to go look at a bunch of possibilities, do keep an open mind. A really ugly paint job can be fixed.

Ideally, you can narrow down your options to only a few houses. Today, this is where things get interesting. In the old days, everybody would jump in their cars and go over and see the houses. Nowadays the first thing you may want to do is just drive by the house.

Multiple ways to see a house

Surveys say that half of buyers have decided on whether they like a house or not by the time they get to the front door. This is a problem in Greenwich. One of the many aspects of Greenwich politeness in the pre-Covid days is that the listing agent, the buyer’s agent, and the buyers will all take a tour of the entire house, when everyone already knows it is not the house for that buyer. A quick drive-by can save you a fair amount of time by eliminating the houses that don’t appeal to you.

After the drive-by, or alternatively, you can talk to your agent about a FaceTime or Zoom tour of the house. That can be done either by your agent, the owner’s agent, the owner or even the tenant depending on what the situation is. The tours work pretty well for a first cut to narrow the houses you want to see. Once again saving you time and maintaining social distance.

You can also go window peeping. The window peeping tour is where the buyers and the agent can walk the property and look in the windows. I’ve actually had a fair amount of luck with this process. My buyers have been eliminating two out of three houses this way.

If you do this type of tour you need to be prepared. You will likely be walking through gardens and certainly lawns. So, wear shoes that are no problem if you get them wet or a little dirty. Also, it helps to pull up the listings on your phone and scroll through the pictures. This way when you get to the house you can look at the cached picture on the phone even if the area has poor cell reception. Since you are out in public, don’t forget your mask and gloves. Your agent probably has some, but it’s nice to have the ones that you like.

If you’ve now found the house that you like it’s time for the inside tour. Some houses are bought without the buyer going inside. We just had one contract where the owner’s first visit to the house was the day, they signed the contract. Having said that, even in the Covid era, it’s not very common. Once again you need your mask and gloves and some places like you to have booties.

Be flexible

Lastly, this is a good time to be flexible. I’ve always told people that if you’re looking to buy in Greenwich given that we only have several hundred house listings you’re very likely not going to find 5 out of the 5 of the things that you want. Now that our inventory is down 25%, this is a particularly good time to be flexible. You can always do renovations to make the house more like what you want. Getting the right house, at the right time, is key in this day and age.

Enjoy your house hunting, it’s a great way to get out of the house and go for a drive. If you do it right, you will have minimal social distancing issues and make good use of your time out.

[You can check out my 1.0 Guide here, House Hunting in a Pandemic It was posted on March 29th.]

 

NY Post – NYers cause coronavirus real estate ‘tidal wave’ in CT (MP Quoted)

Lia Eustachewich highlights the trend of NYC folks moving to Connecticut in this NY Post article. I get quoted about the NYC woman in the beautiful Park Avenue co-op who just doesn’t feel comfortable in her building; she is particularly afraid in the elevator, as there is just no way for her and family to socially distance.

The New York Post article is very well timed as this week we saw a new 2020 high for transactions with 43 properties going to contract or closing. This increase of 10 transaction week over week means this week is the busiest so far this year.

Last week we also had an increase of 10 transactions from the previous week when we 23 transactions. So from the first week of May to the third week. we had an 87% increase in transactions.

We are also seeing an increase in inventory finally. We are up to 557 listings, which is a nice improvement over 523 listings last week. This 6.5% net increase in inventory over last week is even more remarkable given that we had 43 transactions in the same week decreasing our inventory. Last year at this time we had 732 listing, which was a year with higher inventory and lower sales than average, But, even in 2018 we had 686 single family homes listing. We are down 24% from last year and 19% from 2018. (A hat tip to my brother Russ, who keeps a great site for current and historic Greenwich real estate data at RussellPruner.com.)

We still have a long way to go, but I’m guessing that with the nice weather and the decline in Covid cases that we are in that scene in movie where the dam is just starting to burst (see 0:10) Excepting some even more unforeseen circumstance, June looks to be a busy month.

 

 

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 . . . .