For the first time since the 2008 Great Recession, the Greenwich Real Estate market was driven by Single Family Homes selling in the high-end, over $5M, during the Third Quarter 2017. We are already continuing with this momentum into October, with 116 Oneida Drive in Indian Harbor closing at $20,377,000 on the 2nd and 50 Byram Drive in Belle Haven closing at $12,650,000 on the 4th.
What is quite curious is that the middle of the market, the $1-3M range, which has been the driver in recent history, is lagging behind last year’s numbers….
What is reflective of this trend is that, while overall Unit Sales are down -5.4% year-to-year, Sales Volume is up +5.7%, with Inventory remaining stable. Meanwhile, the Average Sale Price is up +11.8% and the Median Sale Price is up +5.8%, further illustrating the increased number of sales of higher-priced homes. Sellers are closing at a healthy average of 93.36% of their List Prices.
In the under $1M Price Range, contracts are down -6% year-to-year and sales are down are down -9%. This is primarily because there is very little Inventory in the under $600K range. (We currently have only 4 Single Family Homes listed in Greenwich for under $600K!) But, while fewer homes have sold in the under $1M range this year, this Price Range still accounts for 19% of Contracts as of the end of September and 7% of the Inventory! What we have been seeing is that if a home comes on the market in the under $600K range, it gets snapped up. Demand exceeds the supply.
Likewise, Contracts and Sales are also down in the $1-2M range year-to-year, -20% and -15% respectively. But, even though Contracts and Sales are down, this Price Range still drives the market, as it has done in recent history. The $1-2M Price Range accounted for 35% of all 2017 Contracts, as of the end of September, and 25% of the Current Inventory. In this range, demand also exceeds the supply.
Similarly, the $2-3M range was a market driver last year but has fallen off this year, with Contracts down -16% and Sales down -7%. While this range accounted for 16% of Current Contracts as of the end of September, it represented 22% of the Current Inventory. Not surprisingly, Inventory in the entire $1-3M range was up +18% this September versus last September.
What has caused this slump in the middle of the market? Many believe that uncertainty at the State level (not to mention the daily confusion at the Federal level!) may be the culprit. CT Legislative Leaders announced Wednesday, 10/18, that they reached a “tentative framework for a budget deal that they may need to pass with a veto-proof majority”, according to CT News Junkie, “because they are uncertain whether Democratic Governor Dannel P. Malloy will support their bipartisan compromise”.
Malloy has been running the state by Executive Order since July 1st. While there are many points of contention that include a “hospital tax deal” and a teacher’s retirement program, our CT Real Estate Market may suffer due to the lack of the ability of the legislature and the governor to agree on a budget….
The big story for Third Quarter in Greenwich, however, is that Contracts are at least equal to last year-to-date or—in most Price Ranges– dramatically up in the $4M+ range, with the most notable being the $6-7M range at +140%. Sales are dramatically up versus last year in the $5M+ range, with the notable Price Range being $6-7M as well, at +300%.
What has caused this dramatic improvement at the upper end of our Real Estate Market? Perhaps the steady gain in the stock market has had something to do with it but, also, dramatic Seller Price Reductions in Backcountry Greenwich have certainly played a major part. It is becoming increasingly difficult for a high-end buyer with some extra cash to resist the temptation of the great deals that exist in Backcountry today.
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