By Mark Pruner
Over the last couple of decades several wealthy Greenwich Republicans have run for Governor, U.S. Senator and other state-wide offices and they have mostly lost. When it comes to being a wealthy Greenwich candidate it really helps to be a Democrat. Our Senator, and Greenwich resident, Richard Blumenthal is one of wealthiest members of the U.S. Senate and it looks like Governor-elect Ned Lamont may be even better off.
I don’t mention Governor-elect Lamont’s wealth as some titillating gossip, but to show that he understands how the laws in Greenwich affects our wealthier residents, the residents that are paying a significant portion of Connecticut’s total state taxes. Ned has paid over a million dollars in Connecticut taxes for several years according to his tax return disclosure.
The reason this is important is that I got two calls the day after his election from homeowners who had been talking about moving and think that now might be the right time.
I assured them that now probably wasn’t the right time as we have Thanksgiving in two weeks and are headed into the holiday season, when many people’s thoughts turn to turkey and not buying houses. (I do, however, know one agent who always likes having an open house on the Sunday after Thanksgiving as there is little competition and who knows one of those visiting relatives may want to move back to town.)
The other reason, that now is not a good time to sell is that uncertainty freezes the market. This just past, pre-election, week was very slow as people waited to see what would happen in the local, state and federal elections. Now we have the uncertainty of how the new Governor will address the serious budget issues that we face.
Personally, I try to make Greenwich and Connecticut a better place to live by being one of the hundreds of people who volunteer their time to make it better, but with nearly a thousand agents in town attitudes vary.
In the movie, “Trading Places”, two commodities traders are trying to explain to Eddie Murphy how commodities trading work and that it doesn’t matter to the traders whether prices go up or down. Eddie’s response to their explanation; “You guys are bookies.” I don’t want to be a bookie, I and nearly all my fellow agents, most of whom are also homeowners, do care what happens to home prices.
Unfortunately, there are some agents who may see this election as a way to get listings in a slow period. In the last couple of year’s we saw a jump up in high-end sales when Mayor DeBlasio was about to be elected and also when the new tax law kicked in as concern for the future drove sales, both phenomena lasted less than a year.
Luckily, as I said our new Governor is a very successful businessman and knows the things to say to reassure our major taxpayers that they will not be the “solution” to our recurring budget crises. Certainly, for Greenwich publicly eschewing the idea of a statewide property tax would be very reassuring. Our low property taxes have led to an increase in sales in Greenwich when many other well-to-do areas with high property taxes were seeing sales fall.
The other reassurance is that the top-end state income tax rate will not increase. Our income taxes are still below, New York state’s taxes and some simple reassurance that they will not be going up next year would relieve a lot of angst. Doing so now rather than at his inaugural address in early January next year would go a long way towards whether folks decide to implement moving plans or take a wait and see approach.
One voice we unfortunately won’t have in Hartford is Scott Frantz. He was a tireless advocate for Greenwich and budgetary sanity. His opponent out spent him substantially and ran on a series of emotional issues. She will have some big shoes to fill in Hartford, but she is very smart, so once again we can wait and see.
So, the future is uncertain, but it always is, and we have an economy that is roaring along, our income taxes are lower than NY states, Greenwich still has low property taxes, good schools, a well-run town, is the closest Connecticut town to New York City and lots of nice people and places to live. It’s a good time to be watchful, but not fearful.
Condos & Sales
While our single family home sales are up this year the same thing can not be said about condos and co-ops.
Condo sales have fallen from 176 last year at this time to 144 this year or a drop of 18%. The total value of all the sales have fallen by almost $27 million. On the slightly good news side the median price is up 1% to $722,500, but this is primarily due to a 29% fall in sales under $500,000, shifting the median price of what is selling higher. With lower sales inventory has increased slightly, up 7%.
You would expect with the $10,000 limitation on state and local taxes and the decrease of mortgage deductibility to $750,000 of debt that the condo market would be doing better. These lower cost housing solutions should be doing better, since more expensive houses have become even more expensive in after tax dollars, but we are seeing just the opposite. The lower the condo’s list price the bigger the drop in sales. It seems that condos buyers are particularly susceptible to increases in interest rates and monthly after-tax payments.
To maintain their values, condos need to step up their game and play nice with buyers and realtors. Some condo have property management companies, who can be only source of information on a property, but companies are not allowed to talk to realtors. Others can take a week or two to return phone calls.
One condo has a rule that if you lose the $10 fob needed for access, that you have to pay $250 to replace it. Another association wouldn’t let a licensed electrician on the property to fix a badly shorted and sparking electrical panel until they got an insurance policy with the association named as an additional insured. Some of our condos badly need an updating in the common area. Entries are over grown and canopies have mildew, the insides are dark and uninviting.
Smaller associations can take weeks to get together the condo info package required by the state condo law. Until that package is delivered the buyer can rescind an otherwise binding contract. This leaves the seller exposed until these docs are delivered.
Now part of this is that in any given year only a small percentage of units are for sale. Making those sales difficult for the seller, which is often an estate, doesn’t impact the majority of owners and particularly doesn’t affect the board members who are often the owners with the longest residencies. I even heard one owner say well if we fixed that up, the value of our units would go up and we’d have to pay more taxes.
The problem with that attitude is that associations get reputations and if prospective buyers see that units are declining in value, they are not going to buy there. We realtors are people too and if we get hassled for trying to get simple info, those associations get shown last. Once an association is seen as declining it can be very difficult to turn that impression around. So, please can’t we all just get along; it’s for everyone’s benefit.
Mark Pruner is an award-winning Realtor with Berkshire Hathaway HomeServices New England in their Greenwich office. He can be reached at mark@bhhsne.com or 203-969-7900.
