Image
Dog Days of Summer? Fuggedaboutit. The Market Report for August
ImageImage
Fuggedaboutit. That's right New York. Throw out the market reports in Connecticut and New York. You cannot use year-over-year data to get a handle on what's happening in Real Estate. We can't compare July 2019 to July 2020 because all of the traditional seasonal patterns have been disrupted. There was no "spring market". The school calendar is disrupted (maybe permanently). Traditional summer vacation plans were either cancelled or shifted and rental rates doubled in some towns as New Yorkers decided to try before buying. Any market that was flat or doubtful a month ago is now strong and strengthening on a late-season surge. The surge ranges from 2% to 67% from town to town but lower Fairfield County as a whole is up 55% for the year on the strength of the best July we've had in at least 15 years.

Total dollar volume for the year is a better measure of market strength and as I said the towns in Fairfield County covered quite a range, all in positive territory. The top 8 towns are experiencing between 20% and 67% annual growth of the market while the other 8 towns are experiencing 2% to 14% growth. Interestingly, all four of the largest towns: Greenwich, Norwalk, Stamford and Fairfield are in the lower half, (showing relatively less growth). So are 4 of the smallest towns in the sample: Rowayton, Old Greenwich, Cos Cob and Easton. In descending order they are:  Westport +67%, Riverside +67%, Weston +41% Wilton +31%, New Canaan +30%, Redding +29.5%, Ridgefield +25%, Darien +20%,  Greenwich +14%, Cos Cob +10.5%, Old Greenwich +10.4%, Fairfield +9.2%, Norwalk +8.5%, Easton +8%, Rowayton +6%, Stamford +2%. 

It is also worth comparing Fairfield County to Westchester County. For the 7-week period lasting from April 1 to May 22, dollar volume in Westchester County was down -52%. In Fairfield County the dollar volume during phase I was down only -19%. Then, from May 23 to June 21 came the "surge" of activity as restrictions in New York City and Westchester County began to lift. Dollar volume in Westchester County was up +28% and in Fairfield County (I don't have dollar volume) the number of sales was up +35%. That brings us to this report, July, and why we wanted to know whether the surge would continue or not. You'll see the increase in both unit sales and dollar volume across all sixteen towns and in every size market is so significant. The number of pending single family home sales across lower Fairfield County on July 31 is 929 and that represents an 85% increase over the same time last year.

Rich Barton, CEO of Zillow (and, take note, New Canaan High School class of 1985) said it best this week "We are at the dawn of a great reshuffling....Zoom meetings are changing the way families think about space and privacy. Home offices are in high demand. Backyards are more desirable than parks and gyms. Work-from-home policies are eliminating the commute for many...a lot of people want a new living space, whether they want to remodel it or move. And that is driving real estate demand for all, everywhere, not just in the suburbs, everywhere.” 

Let's think about 4 of those reasons insofar as they affect the southwestern Connecticut market: 
1. Schools are a major reason for moving and the Connecticut schools, both private and public, are saying the right things about putting a safe environment in place that offers both physical learning and distance learning options, depending on the situation. Check out New Canaan's Plan, Fairfield Prep's Plan, St. Luke's Plan, Darien's Plan, Norwalk's Reopening FAQ, Stamford's Plan, Wilton's PlanGreenwich Private Schools Plan and the Connecticut Plan. After the CIAC announced that Fall sports including the high school football season will be played beginning Sept 24, they walked back that promise and hit the pause button on workouts until next Monday. The season is still pending discussions with the state Department of Health.
2. The daily commute is a little less important than it was a year ago as more of us work remotely at least part of the time. Towns that felt a bit-too-far-away for a daily commute now feel like a very manageable once-in-a-while commute. Forbes explores the change here.
3. Interest rates are historically low (the 15-year fixed-rate mortgage averaged 2.46%) and we are seeing higher loan to value ratios, above 80% again as banks gain confidence in lending in this area. This is opening up more options for buyers and is a factor driving prices higher. Consider that after the Great Recession mortgage interest rates fell 4 out of the next 5 years for a total of 3 percentage points. Low interest rates could drive real estate prices higher still. The Federal Housing Authority announced they'll be taxing any refinancing being sold to Fannie and Freddie by a half point, but yesterday delayed that tax from Sept. 1 to Dec. 1, 2020.
4. The rental market just got a whole lot more expensive. Consider Rowayton where the average rental went from $5,912 to $12,201. That probably includes a greater percentage of seasonal rentals but there is no denying that Connecticut rentals went up substantially this year (if you could even find one).

Comments? I'd like to hear from you. I'm John Engel at jengel@halstead.com
Cos Cob - strong, strengthening. Total dollar volume of houses and condos is up +10.5% through July. The 10 pending sales instead of 2 shows that buyers are still active mid-summer. Inventory levels are recovering, down -13% and condo inventory has actually increased +46%. The rental market for houses is up +86% for the year to 54. The average rental price is up +10% to $6,796.
Darien - strong, strengthening. Second quarter was flat but the magic returned in July, up +37% and total dollar volume is up +20% for the year. Pending sales of 70 houses instead of 38 is certainly atypical for this time of year. Darien rentals are up +32% and the price more than doubled to $11,747 from $5,552 a year ago.
Easton - strong, strengthening. Snapped back from down -8% to up +13% for the first 7 months. Dollar volume now up +8% for the year. We expect it to continue since there are 21 houses pending, up +50% from this time last year. The rental market is down to 18 from 22 but prices are up +72% from $3,266 to $5,637.
Fairfield - strong, strengtheningDown for the first half, the closings in July were up +43% and after 7 months closings are up 8.2% and total dollar volume for the year is up +9.2% Prices are also up +8.2%. Pending sales are up +125%  The rental market is up +16% but the average price nearly doubled from $3,890 to $7,570.
Greenwich - strong, strengthening. July was up +18% and so was the first 7 months, up +18% The total dollar volume is also up +14% and pending sales on July 31 is 125 more houses, up +160% The rental report shows +46% more deals & prices up +30% from $9,815 to $12,757
New Canaan - strong, strengthening.  Closings up this quarter +13% and up this half +10% and through 7 months up +17%  The total dollar volume is up +30% and prices are up +13% Pending sales are now at 64 houses, up +121%
Norwalk - strong, strengthening. A strong July with 94 closings, up +24%, and prices up +22% brings the total dollar volume for the year up +8.5% The 84 pending closings is up +19% The rental market is up +32% and prices climbed +65% from $4,232 to $6,999.
Old Greenwich - strong, strengthening. The strong second quarter momentum continued with July sales up +80%, sales for the year up +22% and total dollar volume up +10.4%  The rental market is up +43% and prices climbed +52% from $7,736 to $11,799.
Redding - strong, strengthening. Despite a poor second quarter, down -29%, sales surged in July +133% and ended July up 21%. Prices climbed +7% this year and helped total dollar volume to climb up +29.5%  Rentals are also rebounding, up +117% from 12 to 26 for the year and rental prices rose +44% from $3,012 to $4,331.
Ridgefield - strong, strengthening. Closings in July were up +70% and for the year +19.5% The number of pending sales is 79, up +163% and the total dollar volume is up +25% for the year. The rental market is surprisingly flat, from 46 to 49 while the average rental price doubled from $3,356 to $6,610.
Riverside - strong, strengthening. Despite a flat second quarter we see a rebound up +45% in July to bring the 7 month totals up +27% to 61. Average price rose 36% to $2.6 million bringing the total dollar volume up +67%  One of the few rental markets to see a decline from 58 to 51 units, average rental prices climbed only +27% from $7,498 to $9,558 
Rowayton. strong, strengthening. Sales in July are up +50% and it made up for a flat first half and 7 month totals are now up 12%. Total dollar volume is up +6% for the year and the ending sales are 13 which is up +160% for this time of year. The rental market is up +83% and average rental prices more than doubled from $5,912 to $12,201.
Stamford - flat, strengthening. The first half ended quietly but a strong July, up +28% brought Stamford back even with 2019 and total dollar volume back in positive territory, +2%. Condo sales are down -4% while condo prices rose +8% The rental market is up +4% for the year and the average rental price is up +37% from $3,736 to $5,131.
Weston - strong, strengthening. After a strong first quarter improving in the second quarter, up +73% in sales to average +44% for the half we saw July slow a bit so that sale are up +34% for the year. Pending sales are up from 18 to 33 so we see the trend continuing. Total dollar volume is up +41%. The rental market improved +30% from 26 to 34 and the average rental price went up +262.8% from $5,338 to a stratospheric $19,336. I repeat, that is the average rental.
Westport - strong, strengthening. Closings in July improved +197%, from 32 to 95 and pending sales improved +118%, from 51 to 111 and average price improved +9% to $1.47 million. Total dollar volume is up +66.6% to $443 million and this is the best year in a decade. The rental market is up +82% and prices are up +59% to average $13,144. Wow, Westport!
Wilton - strong, strengthening. Closings in July are up +78% and for the year up +22% while total dollar volume is up +31%. Pending sales are up from 29 to 49, up +69%. The rental market has seen an increase of +64% from 36 to 59 and the average price went from $3,9990 to $11,202

- Westchester vs. Connecticut property taxes: What you need to know before buying a home in the suburbs
Greenwich, Darien, New Canaan, Westport
Does this market look overheated to you?
Image

Image
John Engel downtown in New Canaan

Image
Image
Image
Image
Image
Image
Image
Image

Image
Image
Image
Image
Image
Image
Image
Image
ImageImage
ImageImage

For a link to the "Boroughs to the Burbs" panel of experts, click here. We asked economists, builders, mayors, and NYC realtors what to expect in this market. You might be surprised at how they answered.

For the house videos, click here. Two new videos coming soon of 536 Old Post Road in Fairfield and of 96 Woods End Road in New Canaan.


ImageImageImage
Image
Licensed in Connecticut. 183 Elm Street, New Canaan, CT 06840
203.966.7772
203.247.4700
jengelteam@halstead.com 
Image
Image