GREENWICH REAL ESTATE SEEING MORE PRICE INCREASES

By: Mark Pruner

Greenwich had an amazing year last year in sales, and 2021 has been even better. Our median price went from $1,866,666 for all on 2019 to $2,080,000 at the end of 2020 or an increase of 11.4%. Our average price went from $2,376,978 in 2019 to $2,677,179 or an increase of 12.7%.

In 2021, this price increase has continued to grow. Our median price for single family homes through the middle of February is $2,342,000 or an increase of 25.5% over 2019 and a very surprising 12.6% median price increase in a month and half. This is more of a price increase than we saw in all of 2020.

So why is this happening and if we are getting 12.6% price increase in 48 days can we expect to get a 100.8% increase for the entire year? (OK that last part was just checking to see if you were actually looking at the numbers.) But why are we seeing 12.6% growth in our median price only 6 weeks of the new year. The reason is that our inventory is down and pretty much the lower you go in price the less we have to sell. For example, we still have yet to have a new listing under $600,000.

As of February 17th, we have already sold 115 houses as compared to 68 houses in 2020 for the first two months. In the first 17 days of February 2021, we have had 49 sales compared to 30 sales for all of February 2020. We started the year at an all time low of 287 single family homes, when we should have been in the 400s for listings. We saw a slight climb of inventory in mid-January, but then sales started to outpace inventory additions and inventory shrank.

As of now, our 280 house listings make for a new all time low. As of March 2nd, last year we had 513 listing, as the spring market started hit its stride last year. We won’t be getting close to 513 listings this year.

As a result, we are seeing upward pressure on prices. In December, January and February, we continued to see the sales price per square foot around $600/square foot. This is all the more remarkable when you realize that at the beginning of the pandemic, we actually slid to a low of $462/s.f. in April of 2020. This meant we saw a 31% increase in real prices from April to December.

If you take our 49 sales so far in February and annualize them (monthlyize them(?), There has to be a word for that) you come up with 80 sales for the present month if the second of February see sales at the same rate as the first two weeks. If we keep getting inventory, we just might make it, because demand has not slackened.

When you look at transactions, sales and contracts, we took a slight pause for two weeks at the beginning of the year and then transactions took off. Last week we had 22 sales and 36 new contracts making for 58 transactions compared to 13 transactions for the same week last year. No wonder inventory is going down.

Curiously, the roll out of vaccines may actually have slowed some people from listing their properties. Their thinking is why risk my family when in a month or two they are likely to be vaccinated. Another factor which hasn’t gotten much discussion, but is blatantly obvious, to anyone who has a window is that we are having a classic New England winter with frequent snowstorms. It’s not the most conducive to holding Realtor or public open houses.

The result is market that was tight in December, stayed tight in January and then got downright constrictive in February. The result is that our sales price to assessment is well over 1.42. Since our assessment ratio, the percentage of the assessor FMV that is actually taxed is 70%, anything about the reciprocal of 1.42 indicates that houses are selling above their October 1, 2015 assessed value. That date 10/1/15 is the last time that all of the property in Greenwich was reassessed.

Given that property values in backcountry and mid-country have fallen since then and are only started recovering starting in 2020, means a broad spectrum of properties are seeing price increases. December’s 91 saw a median sales price to assessment ratio of 1.656 or 16.6% higher than in October 2015. Our sales price to original list price is also up to very pro-seller amount of 95.1% and has been high for months.

Unless we see a flood of inventory or a major drop in demand, you can expect some significant price appreciation this year. Interest rates are still very low, the stock market is at record highs, we burned through lots of stale and shadow inventory, leaving a small relief valve of reserve inventory. It’s a good time to be a seller (if we only had more.)

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