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Click on the picture above or follow this link to the 2017 Q1 Market Report. As you can see it was a great first quarter for our market. Sold homes were up 28.6% over the first quarter last year. All price ranges either stayed the same or went up vs last quarter. However, we continue to see that buyers are looking for value. Pricing has become the most important aspect of listing your home. 95 of the 126 properties that were sold in all of Greenwich this quarter were under $3M, that equates to 75.3% of all properties sold. Days on the market continue to grow, up 23% to 248 days and the Sold price to initial ask has dropped to 92 percent. These metrics point to a buyer wanting value, and show that we were able to get some of the older inventory on the market. Typically we see the most inventory hit the market in Q2. It will be interesting to see if that new inventory helps the days on market and list price averages or we continue to see buyers wait until a property gets to the right price before moving on it. Here is the message from our COO and CEO:
A warm winter helped heat up our real estate market at the start of the year. Both home sales and prices rose in the quarter. To the relief of many in our community, the stock market gathered steam which added to consumer confidence. Tax reform remains a promise of the administration, as does deregulation but investors remain cautiously optimistic about the outcome.
The S&P 500 was up 5.5 percent in the first quarter of 2017. The Nasdaq had its best quarter since 2013, soaring close to 10 percent. Interest rates have also been heading higher. Unemployment is at just 4.5 percent, an indication that the job market remains solid. While none of that is not a surprise, when coupled with the stock market performance, it is motivating buyers to get off the sidelines.
The industry is getting ready for an increase in demand. Homebuilder stocks have been climbing. The S&P Homebuilders ETF had its best quarter in 2 years, adding 10 percent. Homebuilder sentiment was at its highest level in 12 years in March.
Houlihan Lawrence proudly participated in the three top sales in Greenwich in the quarter, including a premiere $19.25 million waterfront property.
Here are some trends we are seeing this spring:
Millennials continue to form new households, and that is increasing the pool of potential buyers. They are often first time home buyers keenly aware of rising interest rates, but also needing the value of an entry level home. They know the history of the housing bubble and do not want to buy more than they can afford.
Stretching to afford a house they will eventually "grow into" is a thing of the past for many homebuyers.
Millennials want to keep some cash on the sidelines for experiences, like travel and dining out, when deciding how much to spend on a home. They are likely to resist taking on high levels of mortgage debt that will prevent them from having the resources to enjoy these activities.
For sellers, this is creating a delicate situation. Demand is strongest in the most affordable price points. Prices are rising because of lack of supply- not because buyers can afford or are easily persuaded to pay higher prices. Initial pricing needs to take into account not just the supply/demand ratio, but the realistic final sales price that a buyer in the target market can and will pay. Sellers who are overly aggressive with initial pricing risk having their property on the market for an extended period of time.
Gains have been made in the $1m-$6m range. We've seen a solid uptick this year compared to last year in home sales. For example, in the $2m-$3m range there was a 125 percent increase from the 1st quarter of 2016 to the 1st quarter of 2017. The median sales price in Greater Greenwich, at $1,875,000 is more than 12 percent higher than in the first quarter of 2016.
Prices of homes sold are coming in at just 92 percent of the initial ask, accelerating what had been a modest downward trend. This is yet another red flag for sellers that initial pricing needs to be closer to what the market will bear. Average days on market rose by about 23 percent to 248 days in the first quarter, compared to a year earlier. Buyers have this data and will use it when making their offers.
EXECUTIVE SUMMARY
FIRST QUARTER 2017
Some regional statistics we'd like to share:
Sales in Greenwich North of the Parkway have been rising, driven by activity in the $1m-$2m range. But a closer look at the data shows that overall volume of sales remains light and demand is relatively low. For example, homes spent an average of 509 days on the market, an increase of 53 percent compared to the 1st quarter of 2016.
Homes in Greenwich South of the Parkway experienced a surge in both home sales and pricing. The big draw? Proximity to schools and downtown Greenwich. Here the jump in sales was in the $2m to $5m price range. The most dramatic leap was in the $3m-$4m price points, where there was a 700 percent jump in sold properties. It should also be noted for potential sellers that we are seeing extremely high demand for homes priced under $1m.
The top performing community of 2016, Greenwich South of Post Road, cooled a bit after those impressive gains.
While both median sales prices and unit sales declined, there was a sales increase in the $1m-$2m price range, where demand remains strong for properties priced below $2m.
Affordability and a central, convenient location continue to drive interest in Cos Cob. Home sales and median prices rose in the quarter. Demand for homes priced under a million dollars is at the very highest level, where sales held steady on a quarterly basis. Year-over-year sales of properties under a million dollars were up 36 percent.
The comeback community is Riverside which enjoyed a strong quarter after a challenging 2016. Not only did sales and prices rise, but homes sold at a faster pace in this community just east of the Mianus River along the Long Island Sound Waterfront. The standout sales range here was the $1m-$3m, compared to a year ago.
Old Greenwich with its village charm and proximity to Greenwich Point saw a surge in sales as well. In this case the activity was at the slightly higher end of the range between $2m and $3m where sales were up 150 percent. We are hearing reports of multiple bid situations percolating in the marketplace. Median sales prices rose 19 percent.
Wall Street and Washington remain on our radar. After a strong start to 2017 we'll continue to monitor our local markets and advise our clients - using our proprietary analytics - on how to achieve success when buying or selling with Houlihan Lawrence.
Stephen Meyers CEO
Chris Meyers President
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Jared Randall Join my Mailing List
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