Greenwich Real Estate got a bad rap in September this year when Barry Sternlicht, chairman and CEO of Greenwich, CT based Starwood Capital Group announced, “You can’t give a house away in Greenwich”, according to Bloomberg.com.
Sternlicht’s disgruntled comment was likely motivated by the fact that he listed his 5.8 acre estate in back country Greenwich in June 2008– that subsequently underwent numerous price reductions and a single price increase–and was no longer listed for sale by early 2010. He relocated to Florida this year.
A glimpse of the Greenwich Real Estate Market as of the end of the 3rd quarter 2016 (see attached Market Statistics Report) reveals that—in fact– there are distinct pockets of strength.
As has been the case in recent years, the sales of homes under $2M are fueling this market and are a distinct pocket of strength. Inventory ended the 3rd quarter noticeably up 8% in the $$0-1M range, providing more opportunity for entry level buyers than there has been in the recent past in this range. With contracts up 2% Jan.-Sept. 2016 vs. Jan.-Sept. 2015, this price range comprised 8% of the current inventory as of the end of September and an impressive 19% of all 2016 contracts to date.
While inventory in the $1-2M range has been tighter, down 5% Sept. 2016 vs. 2015, contracts are up 9% in this powerhouse price range over last year. This range represents 21% of the current inventory and an astounding 41% of all 2016 contracts! So, it is clear that the demand is greater than the supply and a seller’s market in Greenwich below $2M as of the end of the 3rd Quarter 2016.
The $2-3M price range in Greenwich, meanwhile, has been picking up speed. With inventory in this range ending the 3rd Quarter down 6%, this price segment represents an impressive 19% of current inventory and 19% of all 2016 contracts. Demand in this category is equal to the supply in this range.
High end sales have been soft across the country in 2016 and Greenwich is no different. Despite this, Greenwich’s real estate market ranks near the top as the 12th most expensive in the nation with an average price of about $1.3M for a 4-bedroom, 2 bath home. This represents a price increase of more than 4% from last year, according to an annual Coldwell Banker report.
While contracts and sales are largely down in Greenwich in the $3M+ ranges, Jan.-Sept. 2016 vs. Jan.- Sept. 2015, there are many factors that may contribute to this. As Barry Sternlicht cited as his rationale for departing the state, “Connecticut got too close to Manhattan tax rates”. (Bloomberg.com)
Another contributing factor to the decline in high end contracts and sales is the strength of the dollar. The demand by foreign investors has declined as our dollar has strengthened.
Another factor may be the difference in how Wall Street now receives their bonuses. Instead of getting a lump sum in cash at the beginning of the year, these financial types are being compensated in stock instead of cash and the income is spread out over numerous years.
This has tipped the fulcrum in Greenwich to a traditional spring market where May, June and April (in this order) are the strongest months for contracts now versus the March, May and April format, which was common pre-2008. More high- end purchases are now being made at the end of the year for this reason, with October now being the 6th most popular month for a home to go to contract in Greenwich.
Bottom line: no matter what time of year people purchase their homes, Greenwich remains one of the most sought-after places to live in the US in ALL price ranges due to its sheer proximity to Manhattan, schools, clubs, beaches, parks, transportation and the exceptional lifestyle that is afforded by living here.
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