Greenwich Sellers Love Out-of-Town Agents: 340 Valley Rd

Unit 5 at Valley Ridge sold today for $2.36mln after 447 days on market. The unit was the model home for this new condo development by Greyrock Company at 340 Valley Road. The original list price was $2.7mln. Interestingly, this is the second sale in this 10 unit development. So there are eight units left. And the first sale was for $2.3mln in July '08.

Congratulations to Greyrock! But I am not surprised this was sold by an out-of-town agent (Norwalk per sales records). Over the years, I've been stumped by sales on several occasions and often find that the buyer has been represented by an out-of-town agent. This is another one.

January 2009 Residential Market Summary

Click on image to view

BTO said it well, you ain't seen nothing yet!

Nude Sales

No its not a new technique Greenwich agents are using to entice sales, but it is something increasingly fashionable in Italy. Property rich, cash poor senior Italians sell their homes but retain right to live in them until they (the homeowner) dies. These types of sales have more than doubled over the last year to 40,000 in 2008.

To each his own, but I wouldn't be comfortable waiting and wishing for someone to die inorder to occupy my new home. But then nothing like a good crisis to focus the mind and generate new solutions to what I expect is a growing issue--property rich, cash poor seniors seeking to live-out their final days in their homes and not in "assisted living facilities".

Day Trip from Greenwich: Mohawk Mountain Ski Area

If you're looking for a bit of winter fun not too far from Greenwich, Mohawk Mountain Ski area in beautiful Northwest Connecticut is a charm.

The ski area is in Cornwall and travel time from my place in West Greenwich is about 1 1/2hrs. The mountain is a great place for skiing with the little ones or for the older of us getting our ski legs back.

On the way back to Greenwich, if you want to treat yourself and the kids or pick-up a little something special for those who stayed home, try the Belgique Patisserie and Chocolatier, a nifty chocolate shop, in the town of Kent. You can get some great espresso or handmade chocolates, but the hot chocolate is considered some of the best in New England.

Enjoy!

Comp Killer: 114 Overlook Closes Below 2004 Sale

This nice property in the Milbrook area just sold at less than the price of its last two sales dating back to September 2004.

114 Overlook Drive, Greenwich

Sale: $1.625mln in Sept. 2004

Buy: $ 1.896mln in August 2007

Original List: $1.990mln in Dec. 2008

Recent Sale: $1.550mln in Feb 2009

18% less than 2008 sale;

22% less than Original List Price

What a market! The property went to contract one month after being listed and still sold at a 22% discount to the original list price. Smells like a cash buyer. And I understand that there are more of them in the market with each passing day.

Comp Killer: Byram Condo Sale

This condomimium unit sold in January below the previous sale price.

19 Church Street West, Unit 4, Byram (Greenwich)

GMLS#: 71129
Previous Buy: $184,000 Nov 19, '04
Original List: $179,000 Sept. 29, '08

Sale: $172,500 on Jan. 27 '09

6.25% off 2004 sale

4% off original list price

2009 Greenwich Condo Market: 9 to 14 Month Inventory

There was between 14 and 9 months condo inventory on the market in Greenwich at the start of this year depending on whether one uses 2008 or 2007 sales. Either way the numbers are significantly higher than the +/-3 months inventory over the boom years.

Breaking the inventory down by price range, there are over 9 months inventory across all price ranges except the lowest at 2008 sales. There is more than 12 months inventory at all ranges above $800,000. Above $2.5mln there is between 4 to 6 years worth of inventory. Do these higher end units become rentals; sell at steep discounts; become feeding stations and lottery kiosks for real estate agents on Tuesday and Thursdays for years to come; or get bought at asking by groups of Chinese on prepackaged tours of the US looking to take advantage of the local value proposition? Who knows? But based on the inventory levels, I expect prices at the higher end to decline at greater rates than prices in the lower ranges where there is less inventory. I expect price declines across the board in the current year.

Below $299,000 there is 3 months inventory. As the local market continues to correct, I expect more inventory moving into the lower price ranges. Heck with the way the market is correcting, the town may not have to build low-income housing.

In case 2008 sales are an anomaly, we can use 2007 sales, which closely match the median number of units sold during the last 10 years (206 vs 208 units). At 2007 sales, months inventory levels decrease. There remain over six month inventory across all but the two lowest price ranges. More critically there are 21 month inventory in both the $1.5 to 2.49 and $2.5 to $3.49 ranges; and there is 4 years worth of inventory above $5mln.

Granted the top-end of the condo market is minuscule; there were a total of 15 units sold in 2007 for $2.5mln or greater. But we know that a good part of the high-end condo market demand has been driven by empty-nesters seeking to downsize and relocate to central Greenwich. Some of this group is hamstrung by its inability to sell just as fresh inventory has come on line to meet what appeared to be growing demand. Then there is the decline demand from the financial service and hedge fund set. Developers may not be breaking ground on new speculative developments, but inventory will come on the market as part of the natural buy/sell cycle. As far as I can tell, sales continue to decline at a greater rate than new inventory. So how much inventory will pile-up during the bottoming out of the market? More importantly will the market over-correct on the downside in the same way it over-inflated on the upside? Time will tell and I'll keep you posted.

A note on methodology, month inventory is underestimated in this analysis as sales data includes both private/FSBO and broker-assisted sales, while active listings do not include private/FSBO listings.

Condo Market: Sales By Price '07/'08

In the Condo Market Summary 2007 vs 2008, we saw that Greenwich condo unit and volume sales were down 36% and 43% respectively from 2007. Breaking down these sales by price class, we see significant double digit declines across all price ranges with the exception of the top and bottom (Over $5.0mln and Under $300k, which jointly account for less than 6% of the condo market). Click on images to enlarge.

Unit sales are down 88%, 71%, 45%, 43%, 40%, 27%, 27% and 15% across eight of the 10 ranges and these declines are nearly matched by volume sale declines. The declines look as out of whack as the increases looked during the boom period. But with the general economic situation and with Wall Street and financial sector employment (among others) getting decimated, prospects for a significant improvement in the Greenwich property market seems slim in the near term. But how low can we go?

In the hardest hit price ranges, unit and volume sales declined nearly 90%, in the $3.5 to $4.99mln range, and just over 70%, for the $2.5 to $3.49mln range. It is not a lot of units: five (5) fewer units sold in the $2.5 to 3.49mln range, and 7 fewer units in the $3.5 to $4.99mln range. But the drop in these sales is $45mln or nearly half of the $94 mln total volume decline from 2007 to 2008 ($218mln to $124mln ). There ain't many of them, but they sure pack a wallop!

What does this mean for condo buyers or sellers? Before I get ahead of myself, I want to check out inventory levels. I’ll be back once I do.

Greenwich Comp Killers, Single Family

Hat tip to New Jersey Real Estate Report for the format; I'll borrow it. Here are Greenwich homes that recently sold for less than their previous sale. So if you're looking to sell or buy, the fresher the comp the better. These are fresh.

14 River Lane, Cos Cob

GMLS # 70384
BUY:12.08.04 for $1,570,000

Original List Date & Price: 3.19.08 $1,795,000

Sold: 2.03.09 for $900,000

43% off 2004 sale price

50% off Original List Price

35 Glenville Street, Glenville (West Greenwich)
GMLS# 68631

BUY: 12.20.02 for $1,106,000

Original List Price: 03/25/08 $1,475,000

SOLD: 12.11.08 for $1,025,000

7.3% off 2002 sale price

30.5% off 2008 Original List Price

Controlling Our Tax Rate: Town to Lay off 70

The Town of Greenwich announces it will reduce non-school work force by 7% (70 employees). First Selectman Peter Tesei said the decision comes down to a choice of cutting positions or raising taxes beyond the customary 2 to 4 percent annual increase that residents have come to expect. He opposes the latter.

Kudos to First Selectman Peter Tesei and crew; and condolences to those who lose their jobs. We are in this together. I think this a tough but prudent step given the current and projected budget shortfalls.

Greenwich Condo Market 2008 vs 2007

The number and dollar volume of all condominiums sales (private and brokered) in
Greenwich declined dramatically in 2008 compared to 2007. Unit and volume sales declined 36% and 43% respectively.

(Click on Table to enlarge)

The median condominium sale price declined a less dramatic 1.3%, while the average price declined 11% compared to last year.

The functional characteristics of condos remained relatively constant year over year. The median number of bedrooms and bathrooms remained at 2 and 2.1 respectivley. The median unit size increased 4.4% from the prior year to 1,662sqft from 1,592sqft.

Finally, there is just over 14 months inventory of condominiums for sale in Greenwich using 2008 sales and the amount of active inventory at January 1, 2009 . In the near future, I'll provide an analysis of condo inventory by price point.