By Bob Giaquinto
The Greenwich Retired Men’s Association presentation on March 5th was by David Michonski, who provided a detailed analysis of the current real estate market, concentrating on the Greenwich area. David, who is first vice president of the RMA, is a former manager of Coldwell Banker’s Greenwich office and founder of Quigler, Inc., a real estate software company. He is an alumnus of Colgate University with further studies at Harvard, Boston College and the Wharton School.
He revealed that the average price for a single-family home in Greenwich had reached a record high of $3,573,863, indicating a modest one percent increase from the prior year. Condos and co-ops experienced a more significant surge with their average price climbing 15% to $1,322,216. He clarified the distinction between average and median prices, emphasizing the latter as a more reliable indicator as it represents the midpoint of sales and mitigates the skewing effect of ultra high-end transactions. In 2024, the median price for a single-family home in Greenwich rose 15% to $2.9 million, up from $2.5 million in 2023, indicating broad market appreciation. Similarly, the median price for condos and co-ops also saw a 15% increase, reaching $1 million.
To provide historical context, Michonski presented data going back to the year 2000, facilitated by proprietary software he developed over two decades ago. He compared the recent peaks in average prices to the relatively stagnant market of the early 2000s. This was followed by a boom period from 2004 to 2007, fueled by easy mortgage credit which ultimately led to the 2008 financial crisis and the Great Recession. During the Recession Greenwich endured a prolonged downturn lasting seven years, which was longer than the national average. This was partly attributed to high local unemployment. The market stabilized until 2020, a pivotal year marked by the COVID-19 pandemic. The initial lockdown caused a market freeze, followed by a surge in rentals as people fled urban centers. The latter half of 2020 saw renters beginning to purchase properties often sight unseen, partly because the owners didn’t want buyers in their homes. This period and the subsequent years of 2021 and 2022 witnessed unprecedented market activity with record prices and dwindling inventory, driven by historically low interest rates. However, these low rates also created a lock-in effect, discouraging homeowners from selling and facing much higher current mortgage rates.
Regarding market dynamics, David highlighted a record low of 71 days on the market for single-family homes in Greenwich in 2024, significantly shorter than the typical 90 to 120 days, indicating a highly competitive market. Condos and co-ops sold even faster averaging 57 days. New listings in 2024 were down for both single-family homes (454 down from 487) and condos/co-ops (169, a record low since the year 2000). The number of units sold in 2024 showed a decrease for single-family homes to 502 and an increase for condos/co-ops to 194.
Moving to factors influencing the market, Michonski drew on his international experience as a long-time employee of the United States Agency for International Development (USAID), discussing the impact of an ongoing economic war resulting from tariffs imposed by the US and retaliatory measures from other countries. He predicted an 8% to 10% increase in home building costs by the end of the year due to rising prices of imported materials, like gypsum from Mexico and wood from Canada. He also pointed to the immediate inflationary effects on consumer goods. On the other hand, inflation can benefit existing real estate owners because of all the expensive materials within the home. Real estate is an outstanding hedge against inflation. Despite a recent drop in the 10-year treasury note yield, mortgage rates remained stubbornly high suggesting banks were cautious. He said that ultimately our country’s growth is dependent on positive immigration.
David mentioned the national deficit of six million houses, representing a fundamental long-term strength for the real estate market. This deficit arose from reduced construction after the Great Recession and ongoing zoning restrictions. He mentioned innovative solutions like factory made houses which could streamline construction and reduce costs. He mentioned historically it takes three to four months to purchase a home, including obtaining the mortgage. However, it has now been reduced to 71 days which he said is not normal.
Turning to real estate sales practices, the Sitzer/Burnett lawsuit is a class action lawsuit that was filed in Missouri Federal Court by a group of home sellers in the state against the National Association of Realtors (NAR) and many other defendants, including Berkshire Hathaway Home Services and REMAX. The plaintiffs claimed that real estate commission rates are too high and not properly spelled out. The real estate industry lost and was fined five billion dollars. David found the lawsuit’s success surprising given the historical practice of commission sharing within the MLS (multiple listing service). He cited low public trust in real estate agents.
Providing historical context, he explained the evolution of the brokerage model after the 1906 San Francisco fire and subsequent establishment of the NAR code of ethics, which initially promoted commission sharing. He also discussed the increasing regulatory landscape and the impact of the Internet and the MLS systems. The Sitzer/Burnett settlement led to changes prohibiting the listing of buyer agent commissions in the MLS necessitating direct agreements between buyers and their agents. Initial data suggests that the average commission rates have not decreased. However, David noted a significant increase in direct sales by owners in Connecticut, indicating a potential shift as sellers explore commission-free options. He concluded by briefly mentioning the growing role of private equity firms purchasing and holding residential properties which, he said, could influence rental and housing prices.
The talk can be viewed by going to the RMA website at https://greenwichrma.org, and clicking on “Speakers.”
The RMA’s upcoming presentation, “Report from Washington, D.C.” by U. S. Congressman Jim Himes, is scheduled for 11 AM on Wednesday, March 19, 2025. This and all future RMA presentations will be held at Christ Church Greenwich, Parish Hall, 254 E. Putnam Avenue, Greenwich, CT 06830.
Fifteen-year U.S. House Representative Jim Himes will discuss a range of issues including China, Russia, climate change, social justice, economic recession, inflation, immigration and terrorism. Himes brings significant Congressional experience in each of these areas.
Congressman Himes represents Connecticut’s 4th U.S. Congressional District. He is a member of the House Financial Services Committee and is Ranking Member of the House Permanent Select Committee on Intelligence.
Born in Lima, Peru in 1966 to American parents, he spent the early years of his childhood in Peru and Colombia while his father worked for the Ford Foundation and UNICEF. As an American abroad, Jim grew up fluent in both Spanish and English and was raised with an awareness of the unique position of the United States in the world. At the age of ten, Jim moved with his mother and sisters to the United States.
After completing his undergraduate work at Harvard University, he earned a Rhodes Scholarship to attend Oxford University. Prior to his service in Congress, Jim ran the N.Y.C. branch of Enterprise Community Partners, a nonprofit dedicated to addressing the unique challenges of urban poverty, particularly financing the construction of thousands of affordable housing units. Jim began his professional career at Goldman Sachs & Co. where he worked his way up to Vice President over the course of a 12-year career.
Jim lives in Greenwich with his wife Mary, and two daughters, Emma and Linley. He is the former Chairman of the Greenwich Housing Authority (now Greenwich Communities).
To stream the presentation by Representative Jim Himes at 11 AM on Wednesday, March 19, click on https://bit.ly/30IBj21. This presentation will also be available on local public access TV channels, Verizon FIOS channel 24 and Optimum (Cablevision) channel 79. The public is also invited to attend the presentation in person at Christ Church Greenwich, Parish Hall, 254 E. Putnam Avenue.
Parking may be limited for this program and those interested are encouraged to either view online or on television or check the RMA website under “Speakers” for the latest information on parking availability.
Note: The views expressed in these presentations are those of the speakers. They are not intended to represent the views of the RMA or its members.
RMA speaker presentations are presented as a community service at no cost to in-person or Zoom attendees, regardless of gender. Any member of the public who would like to receive a weekly email announcement of future speakers should send a request to members@greenwichrma.org. The RMA urges all eligible individuals to consider becoming a member of our great organization, and thereby enjoy all the available fellowship, volunteer, and community service opportunities which the RMA offers to its members. For further information, go to https://greenwichrma.org/, or contact info@greenwichrma.org.
