By Mark Pruner
Greenwich is known as a wealthy enclave, and it is. This year we have already sold more houses over $10 million through August than we have ever sold for full year. If the trend continues, we will sell around 37 houses over ten million dollars, but what about the other end of the market?
What if you are not a multimillionaire, but you’d like to live in Greenwich? Young families moving to Greenwich is our largest segment of buyers from outside Greenwich. A related group are kids who grew up in Greenwich and would like to come back.
Young families Buying a house
New York City has lots of good jobs and is a magnet for people from around the world. When you are young and single it’s a great place to be and there are lots of prospective partners to meet. As these folks get older, their salaries go up and many of them start thinking of green grass and a calmer place to raise kids.
Let’s say you only want to spend $1 million, even despite a 50% run up in prices since 2019. Year to date in Greenwich, we have sold 11 houses for $1 million or less. Square footage is from 1,200 to 2,200 s.f. with most of the houses having 3 bedrooms, a good choice for a family of 2 or 3. Location is likely in an R-7 zone (.172 acres) in Old Greenwich, Riverside, Cos Cob, Pemberwick or Byram and don’t forget Banksville in our northeast corner.
I checked with Stan Yee, the SVP of Mortgage Lending at Origin Point Mortgage. He said that with 20% down an $800K mortgage at 6.35% would have a mortgage payment of just under $6,000/mo including property taxes and insurance. Mortgage companies would like your housing costs to be no more than 37% of income, which means that you would need an income of around $195,000 to buy your $1 million house in Greenwich.
Personally, I think $195K is a lot of money, but it’s not nearly what it was 20 years ago. Nowadays, that’s the starting salary for a Tuck MBA grad at Dartmouth (my alma mater :). If our couple met at grad school with two of these salaries, they can look for a house all the way up to $2 million dollars. Here
they have a lot more choices with 93 of our 362 sales so far this year being under $2 million. For $2 million, You now get 4 or 5 bedrooms with houses around 4,000 s.f. and even 5,000 s.f. if you are willing to do some work. Lot size can be as big as one acre, though it centers around the R-12 zone of quarter-acre lots. In addition to the areas mentioned for our under $1 million, you now have Glenville, more areas in Old Greenwich, Riverside, and Cos Cob as well as North Mianus and the lower part of midcountry.
Buying a condo
If you are two adults, or have a baby, many families will look at condos. Instead of the only 11 houses that have sold under $1 million, we have 59 condos, some as large as 2,000 s.f. that sold for less than $1,000,000. For young families and DINKs (dual income, no kids) a condo is a great option, because the association takes care of landscaping, garbage, snow plowing and usually exterior maintenance. This can make a two-income life a lot less stressful.
So far this year, we have sold 115 condos and 85% of them have been under $2 million. You can live very well in a $2 million condo that is walking distance from Greenwich Avenue, the train and just around the corner from Exit 3 on I-95.
Renting
If you want to live in Greenwich, you don’t have to rush if you rent. While there is one listing available under $1 million on the GMLS you have 59 listings under $6,000 . With the small number of houses available biding your time in a rental and then moving quickly, when the right house comes along is a good strategy.
While you are renting, get underwritten pre-approved for a mortgage. This is almost as good as cash when it comes to making an offer as you only need an appraisal to get your mortgage approved. Also, you can try out a neighborhood in your rental and see if you like it.
Kids who grew up in Greenwich
Much of what I wrote above young families applies to kids who grew up in Greenwich. The one principal difference is that many kids who grew up in Greenwich would like to move back when they are still single. Generally, moving back in with your parents is not a great option. You’ve been away from home for 4-8 years and meeting someone and asking them back to your place to meet your father and mother is not a great pick-up line. Also, if you watch your parents’ faces when you talk about moving back home, you’ll see that while they won’t say it, they’d like you to find your own place.
That sentiment can work in your favor. If you are just starting out, the place you can afford is probably rented by word of mouth. We have 4 listings available on the GMLS for under $2,500 so it’s a good time to find a roommate or two. We have 47 options on the GMLS under $5,000. So, check the classifieds and Craigslist, but motivate your parents, by letting them know if they can’t find a place for you to rent, you’ll have to become a boomerang child and move back in with them. The next thing you know your mom and all of her friends are looking for a place for you and so is your dad and his friends and everyone at the club.
Let’s say that you’ve been living in the city with two of your college buddies and you have met the “one” and neither of you want to live together with your college buddies. You also both have been doing well, but you are a HENRY (High Earners, Not
Rich Yet). For these folks, the killer is the downpayment. Often young families have been devoting their extra income to paying down their college and grad school and haven’t had time to create a nest egg for a downpayment.
Look at your options for 90% and even higher loan to value mortgages. (If you are a veteran, you may even qualify for 100% financing.) Mom and Dad can also help out. Downpayment assistance makes for a hell of a wedding gift. If the downpayment assistance comes as loan, with or without interest, make sure everyone signs a formal loan agreement. You never know what happens if the kids or the parents get divorced or someone passes away. The time to agree on that is when everyone is in a good mood, not when the knives are out or you are dealing with a corporate executor or estranged siblings.
Lots of people want to live in Greenwich. Having a good agent, being prepared and moving quickly can make all the difference.
Mark Pruner, Russ Pruner and Dena Zarra are the founders of the Greenwich Streets Team at Compass. He can be reached at 203-817-2871 or mark.pruner@compass.com.
