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Real Estate Column: Greenwich Real Estate April 2018

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By Mark Pruner

Sometimes when you follow the market closely, you just can’t wait to see what the next month is going to bring. April 2018 was one of those months.

The first quarter of this year was very different from what we had seen after the Great Recession. The high-end was doing well and the mid-market was seeing more inventory and fewer sales. Was this a trend or was it just an anomaly of the fact that with that a few sales up here and a few less listings in the winter doldrums numbers tend to jump around in some random Brownian motion?

High-End
Moving Along

Now the definitive verdict is still out, but the high-end is still doing better this year than last year, though not quite as good in April as it was doing in the first quarter. Above $4 million we are down 30 listings, while our year-to-date transaction (sales and contracts) over $4 million are up 13 sales. As a result, months of supply are down dramatically over the last few years.

Over $10 million when you look at sales and contracts months of supply are down six years from last year. Now our negativists will point out that in the whole month of April we did not have one sale over $10 million and this dramatic six-year drop is due to reduce inventory and sales from prior months. True, but we have two contracts pending and only 32 ultra-high-end listings at the peak of the market inventory.

Mid-Range Getting
Back to Normal

In the mid-range, we have 307 listings between $1 and $3 million. This is up 41 listings, or 15%, from this time last year. For those commentators that focus on sales only, our sales from $1 to $3 million are down from 88 sales last year to 75 sales this year or a drop of 15 sales. I wouldn’t worry too much however, as contracts in that same price range are up by 12 houses or just about the same as the decrease in sales. Also, the $1 to $3 million price range saw an improvement in April, as was expected from the number of contracts waiting to close in March. We will likely see another improvement in May as the 63 contracts in this price range start show up as deeds in the Town Clerk’s office in May and June.

In fact, contracts were up in every price category from $800,000 to $10 million. We have a total of 116 contracts, 44 contingent and 72 pending, which is up from 92 in April 2017. This bodes well for the market overall. Whenever you see most price ranges seeing increased sales and increased contracts things are looking up. Our contracts were up 24 and sales were up 20 from April 2017.

Under $800K Has A
Lack of Inventory

Now this was not true under $800K, where contracts were flat at nine houses under contract and we had only six sales. I wouldn’t worry about this being some sort of sub-$800K sea change. We only have 19 listings under $800K down three from last year, so there just not much to buy. We are still looking at less than four months of supply indicating a strong sellers’ market.

The Trashing of Greenwich

If you read the national and international press, you’d swear this is not the case. Only last week an international paper reported on worried hedge fund owners considering fleeing the state due to its economic problem. The article didn’t mention anything about the increase in high-end sales in Greenwich in 2018, nor about the lower inventory and certainly not the dramatic drop in months of supply. The drop in first quarter sales was reported, but not that this in the lower half of the market.

This kind of selective reporting is not an anomaly its almost the norm for the national press. In this day and age of reporters competing against free-lancers from anywhere with minimal experience, the more dramatic the story the better.

Last year a major magazine reported the number of sales in Greenwich correctly, but then nearly doubled the number of actual single-family home listings to over 1,000 listings. They got to this four-figure number by doing a quick “Greenwich” search on a national website, which unbeknownst to them counted up to four listings for a single house in Greenwich. (One for sale on the GMLS, one as a land listing on the GMLS and the same for two listings on Greater Fairfield County MLS.) The result was that our sales looked pitiful compared to this large, but double, triple and quadruply counted inventory.

Now you could just attribute these poor choice of facts as the pressure of meeting a deadline and the difficulty of covering a nuanced market. The problem with this apology is that the misleading numbers nearly always point in one direction or as one person commented, “You can’t give away a house in Greenwich.” This comment rocketed around the financial community at a time when sales at most price ranges in Greenwich were doing just fine.

The fact that Greenwich sales in other price ranges were doing well didn’t make the article. Now telling a complex, nuanced story in a few words is hard, but it is something that our local reporters do every week. It is also hard to get a reporter to write a story that goes against the accepted wisdom, particularly if that reporter wrote a recent article that reinforced the accepted wisdom. (I know, I’ve been trying to get several national reporters to report our increase in high-end sales for the last month. No bites.)

Luckily, the Selectman’s Economic Advisory Committee is fighting back against these slanted stories. Last week’s international article prompted a letter from the First Selectman to the publication. In addition, the Committee is issuing press releases. The latest release touted how tax reform has made “Greenwich the Smart Investment”.

The tax reform release was picked up by 130 news outlets many of them local outlets and business journals.

Welcome to the battle for balanced reporting.

Mark Pruner is an award-winning real estate agent with Berkshire Hathaway. He can be reached at 203-969-7900 and mark@bhhsne.com

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