By Mark Pruner
Market Accelerates in to Spring & a Regulation Too FAR
What a difference a week makes in Greenwich real estate.
Sales: On the sales side, we had 12 sales and 5 of those sales were for over $4 million including sales of $8M and $13.5 million and both of these houses had been on the market for well over a year. In fact, the average days on market for all 12 sales was just about a year. Listings that have been on the market for long time are finding buyers. It may take a price reduction, but older inventory is selling.
Contracts: High end sales will likely continue as we have several other contracts waiting to close. Overall we have 86 contracts; 37 contingent and 49 pending which is the same number as we had at the end of February. Properties are going to contract just as fast as they are closing. Now inventory will pick up as we have additional inventory coming on the market faster than sales for the next month or two as happens every year.
Inventory: We had 60 new houses and condos come on the market in the last week. This finally got us over 500 house listings, but we still need more inventory as buyers have been active throughout our mostly snowless winter. We are getting inventory at all price ranges, which we need all the way up to around $4M.
Condos: Our condo and co-op market have also been doing well this year. We have 110 condos listed on the GMLS. We have already had 30 condos sell this year at prices ranging from $361K to $3.3M. We also have another 25 condos in contract. Totaling the sales and contracts and you get 55 condos and co-ops off the market when we only have an inventory of 110 listings. If you are buyer you need to come prepared to move quickly and if you are seller that has been waiting this is a good time to list your unit.
P&Z Turns Down Greenwich Association of Realtors FAR Proposal
The Greenwich Association of Realtors put a lot of work in to several changes to the Planning & Zoning regulations that would have rationalized several of the unintended consequences with the floor area regulations.
The biggest issue was the grade plane regulation. This all started with the fact that underground basements which are out of sight are not counted as part of the house’s floor area for purposes of calculating the floor area ratio (the house’s sf/lot sf). This isn’t a problem where the lot is flat, but lots of Greenwich lots are not flat. In the classic case where the land slopes from the front to the back you can have a two story house in the front and a three story house in the back with the so-called walkout basement.
The grade plane regulation addresses the in between situation so that sometimes the basement is counted and sometimes it isn’t. Buyers want flat lots and builders want to be able to sell additional square footage. As a result filling in the lot and building retaining walls that both made the lot flatter and put enough of the basement underground so it wasn’t counted became popular. In some cases these retaining walls were taller than a person.
The proposal would have allowed for 50% of the basement to be exposed and still not counted rather than the present regulations 40%. It also had some other tweaks. The Commission members reviewed a variety of the factors involved and then unanimously turned down the GAR’s proposal. Now a large part of the reason they turned it down was that they couldn’t amend the GAR’s proposed regulation like they can do with say a site plan where there approve it with a bunch of changes. Here it was all or nothing.
The GAR put forward a thoughtful proposal, but the way the system works there really is little chance that such a proposal can be adopted unless it is a very simple one rule change. The Commission has asked the staff to expedite their own proposal to address the issues that commission members discussed prior to their vote so all is not lost, nor the effort wasted.
Personally, I would like to see the town get rid of the FAR limitations entirely and do what most other towns have which is setback and height regulations. FAR is just one of many complicated regulations created in the last several decades the regulations have been made tighter and tighter. The zones were made 15% bigger for subdivision as that much land had to be set aside. A subdivision used to be 3 or more lots, now simply dividing one lot in two is a subdivision. We also have seen a requirement for two septic fields, an active and a back-up. A large amount of the property has to be kept as a green area under a new regulation and the new drainage manual now requires that water be trapped on the property.
The result is that building a house or even putting on an addition now requires the services of multiple professionals. If the is selling for $10M these services are only a small fraction of the cost of the construction, but if it is a smaller house these costs become prohibitive. Of the 33 new houses sold since the beginning of 2016 only 4 were sold for less than $2 million and none for less $1 million. The cost of these regulations is pushing ever larger houses even in smaller neighborhoods and leading to the bulky houses the rules are trying control.
Mark Pruner was the #1 Connecticut agent for Douglas Elliman in 2015; mark.pruner@elliman.com, 203-969-7900.
