Uncertainty with state budget looms over Greenwich housing market
The somewhat unusual numbers for August home sales in Greenwich depict a change in the town’s housing market that seems to have taken a pause while Hartford sorts out the state budget, according to several Greenwich Realtors.
The more than 50 home sales tracked in Greenwich last month by Mark Pruner of Berkshire Hathaway N.E. Properties ranks slightly below the 10-year average for August, he said. Yet the number of high-end sales shows that the upper end of the town’s housing market is making a comeback, according to Bryan Tunney of Sotheby’s International Realty in Greenwich. “August has more high-end sales, and buyers are starting to see value again in backcountry,” Tunney said.
The assortment of home sales across price categories registers as abnormal given how many homes sold for more than $5 million while the middle of Greenwich’s market slowed down. “It’s a mixed bag,” Pruner said. “The over-$5 million category is doing significantly better than last year but the heart of our market between $1 million and $3 million is down.”
The increase in home sales at Greenwich’s upper end could be attributed to how Wall Streeters’ pay has changed since the 2008 recession, Pruner said. “We’re seeing a shift of high-end sales to the August, September, October period as Wall Street has restructured,” he said.
According to a Hearst Connecticut Media analysis of property sales filed at Greenwich Town Hall, August home sales included one that edged above $13 million in midcountry as well as a handful of sales for prices between $5 and $10 million spread out between Belle Haven, Old Greenwich and midcountry.
“There’s been more activity later in the year for the last year or two,” Tunney said, adding buyers are taking longer to choose a home. He attributes the lengthened process to buyers wanting to make sure they see all possible options and trying to save money for larger down payments.
Already in the early weeks of September, a $22 million sale in midcountry and several pending contracts for more than $20 million have added to optimism for Greenwich’s high-end market. Part of the uptick in pricey real estate sales is due to sellers “taking significant haircuts on prices,” Pruner said in his real estate report.
At the less pricey end of Greenwich’s market, demand is far outpacing supply, according to Pruner. For homes listed at $600,000 and below, “they go off the market as fast as they come on,” he wrote in his report, adding the price range has become so competitive it’s “almost disappeared” with only one home currently on the market for less than $600,000. In August, one home that’s located in Pemberwick sold within that range, according to town records.
Moving into the middle of Greenwich’s market, the drop in sales is difficult to explain, though both Pruner and Tunney offered one potential reason: Connecticut’s lack of a state budget.
“That certainly doesn’t help and may explain the slowdown in mid-market,” Pruner said.
Similar to the way Greenwich home sales dropped dramatically leading up to last year’s presidential election, political uncertainty at the state level may be prompting people to hold off on making a big financial investment, Tunney said. “Whenever there’s uncertainty, it stalls decisions,” he said. And whatever happens with the state budget, all that really matters to the town’s housing market is that one gets passed, he added.
“People are just waiting to pull the trigger until the uncertainty is removed,” Pruner said. “Uncertainty always seems to hurt sales more than the actual reality even if reality isn’t necessarily favorable.”
A state budget perceived as unfavorable toward businesses and homeowners won’t “encourage sales but just the removal of uncertainty will,” Pruner said.
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