September Sales are Another Record – Why Aren’t Prices Up More

By: Mark Pruner 

Once again sales of single family home in Greenwich set a record with 116 sales. This up 150% from last year. We’ve never had a September with triple digit sales. Post-recession the highest number of sales on the Greenwich MLS was 63 sales in 2015. Given that we had 193 contracts as the end of August, I expected that we would have a very good September as these contracts closed, but I’m still surprised that sales set a new post-recession record for any month.

For the year, we have sold 577 houses in Greenwich and this is more than 526 house we sold in all of 2019. Now 2019 was not a great year, but we will easily break the 600 house sales level this year as we have 173 contracts waiting to close. Any year over 600 sales is a good year for Greenwich. But we will likely be over 700 sales, which makes for a great year. If you just take the 173 contracts, we have outstanding, also up 150% over last year, and add them to the sales YTD you come up with 750 sales and contracts. We might even exceed 800 sales, but more on that later.

I say might, because our 173 contracts are down from our 193 contracts at the end of March. We may finally see the sales curve start to drop in October as our contracts are down. It just depends on how many of the 173 contracts that we have waiting close, actually close in October versus later in the year. In a normal October we sell around 41 houses we should easily double that this year and might make it three months in a row with over 100 sales.

The market last week was as hot as it has been all year, when you look at our weekly transaction, sales and contracts signed. Last week we tied our previous high for the year at 68 transactions. All these transactions are sucking up inventory quickly. We are down to 477 single family homes or 23% from last year when we had 622 listings at the end of September. Inventory is down in every price category from under $600,000 to $10 million.
We are up 2 listings over $10 million to 35 listings. As we are seeing an increase in high-end sales over $5 million, we are seeing more people listing their houses. The increase in listings over $5 million has been mostly matched by sales. The result are big drops in months of supply. For example, when you take the 8 sales over $10 million and add in the 4 contracts that months of supply have dropped from 4 years of supply to a little over 2 years of supply.

At the high-end, we went from a cold market to a warm market and from $5 – 6.5 million we only have 13 months of supply. Dropdown to $3 – 4 million and you are looking at 6.5 months of supply. This is the kind of number you see in Greenwich around $1 million not at triple that price.

September sales also distinctly tightened several price points. When you take the September sales and analyze them to calculate months of supply you can see big drops from $1 million all the way to the very top. I have a listing that I put on last week at 343 Sound Beach Ave in Old Greenwich for $2,195,000. It’s an older house, but it has been freshly renovated and hit a sweet spot with lots of showing right out of the gates. I’m seeing the same thing at677 River Road in Cos Cob, which is on for $1,3900,000. This is a nice 2,500 s.f. house on 1.1 acres. Being on River Road it slopes up from the Mianus River and has a limited backyard, normally a significant issue for families with kids, however, with limited inventory we are seeing more showings to families than we are to downsizers. Removing a few trees to create a yard when you only have 3 – 4 months of supply starts to look much more viable to these buyers.

House prices up 15.2% in Greenwich – Sort of

I was talking to brother, Russ Pruner, a Realtor, since 1980 who has seen a lot of ups and a couple of downs in Greenwich real estate. We were both marveling at how all this demand hasn’t pushed up prices more. When you look at the sales price to assessment ratio for 2020, we are only up 1.0% for the year in sales price. On the other hand if you compare the average sales price for this year so far to last year, we are up from a 2019 average of $2.38 million to $2.59 million or an increase of 9.0% which matches some of the price increases that we saw in the 80’s, 90’s and early digits. In many of these years we were seeing double digit percentage increases in prices per year. In 2004 we sold 835 houses listed on the Greenwich MLS and had another 144 private sales.
If you want a dramatic number, the median increase is 15.2% in sales price for September 2020 compared to last year’s median. So, we are seeing price increases in the last two months as you would expect with sales over 100 house in each of the last two months.

But I know, what you are saying, but how much is my house up. My best guess 4 – 6% with much of that coming in the last couple of months, but why isn’t it more? First off, each house is different and is its own micro-market. Houses that need work in Byram have not increased like moderately priced houses in mid-country, then again Byram saw some of our best appreciation pre-Covid.

Also, as I’ve written before, Covid buyers are running from NYC and are looking at lots of options, particularly under $1 million. I actually had a buyer who was interested in Greenwich ask me how it compares to New Canaan, a very common situation, but then she asked me about Wilton and Fairfield, not towns that we usually compete against for buyers. Greenwich is doing just fine in this competition.
Curiously, for all the talk of multiple bid situations only 14 out of the 116 sales in September went for over list. With winter and the holidays coming up, now is not the best time to go with a premium list price. Save that for the spring market when you’ll have time to adjust the price if you over-price the house.

We are seeing other stats that are likely to lead to increased prices. September sales were on for a median of only 96 days compared to 140 days in July. The sales price to original list price was 95% compared to 92% in July. Lastly our inventory is continuing to stay down, making for a competitive market. Normally, I don’t suggest listing your house in October, but I do this year and the sooner the better.

The $2.5 billion question is will we make to 800 sales this year. We’ll have no problem with 700 sales as we already have a total of 750 sales and contracts with a whole quarter to go. We’ll need about 75 sales in each of those months and that shouldn’t be a problem in October. But our contracts have dropped from 193 to 173 today and we have the holidays. We also have the election uncertainty, never a good thing for house sales and Covid cases are going up again in parts of NYC. We’ve still got a good shot at making it, if we get anything like the number of contracts signed in October as we saw in August and September. Stay tuned, it will be an interesting 4th quarter.