This year has been different from prior years with more transactions and less inventory at the higher end and fewer sales and more inventory in the heart of our market from $1 – $3 million. The result is that our neighborhoods have seen a shift in activity levels and demand.
The largest number of listings in the GMLS system is South of the Parkway which extends all the way from the Merritt to the Post Road (except for those parts in another neighborhood like Old Greenwich or Glenville.) I tend to think of it as a shorthand for the mid-country one and two-acre zones, but it also includes other zone. As usual this area has the most listing with 211 listings or 38% of all our listings.
This area has the highest average price of any area in town with $3.18M and the most sales with 46 sales. It also has our lowest appreciation rate when you compare the sales to the Greenwich Tax Assessor’s assessment as of October 1. 2015. The assessment ratio is 70% so if prices had not changed at all the Sales Price/Assessment ratio would 1.42 the reciprocal of .70. For this area the assessment ratio is 1.52 which is only 7% appreciation in 2.6 years, but the good news is that it is appreciation.
North of the Parkway is doing better this year, primarily because our high-end market is doing better this year. You can see this, because this area had a sale for $11,100,000 and it still only came in third. Both Riverside with a $14.5M sale and South of the Parkway with a $12,075,000 came in above the northern section of town. North of the Parkway did have nearly the highest average with $3,171,630 compared to South of the Parkway’s average of $3,180,354. These nearly identical high averages bode well for the northern half of the town. Together these two areas represent almost 2/3rds of our listings so this improvement in the higher end is good news for the town.
North of the Parkway still however has some ways to go on the sales side as the 113 houses listings there constitute 24% of all our listings, but only 7% of the sales. The good news for backcountry is that the trend is in the right direction. In fact, backcountry has the second highest appreciation SP/Assmt ratio at 2.04 or 89% appreciation, but this, like all early season numbers in this article, factors in the effect of a few anomalous sales which causes averages to swing wildly in the first half of the year. With only 10 sales, I don’t think Old Greenwich needs to worry that they will have less appreciation than backcountry by the end of the year.
Old Greenwich and Riverside are actually pretty diverse when it comes to real estate. Prices so far this year have varied from $740,000 to the aforementioned high sale of $14,500,000. Each area is just under 9% of our inventory, while on the sales side OG is 12.5% of sales and Riverside an even more competitive 15.8% of sales, so both areas are still quite popular. As you might expect their sales price to original list price ratio is also quite high at around 93% compared to 91% for the town-wide average.
As between the two areas, you can see some of the popularity shift towards Riverside as we’ve seen the last couple of years. We have greater sales in Riverside than in Old Greenwich, 24 houses to 19 houses and a higher average price of $2.7M in Riverside compared to $2.2M in Old Greenwich. They are still premier places to live in the NY metro areas and demand exceed supplies supply which is what drives these high average sales price.
Unlike north and south of the parkway and OG and Riverside these two areas are not contiguous, but buyers who look in one area often look in the other area across town. These two areas have not reached the heady averages of OG and Riverside, but they are headed that way. Cos Cob has a higher average price at $1.71M compared to Glenville’s $1.02M, but Glenville sales have fewer days on market and a slightly higher sales price to original sales price ratio.
Both areas are smaller with limited inventory, however, when you compare the percentage of sales to the percentage of inventory town wide, the sale percentage is 3 – 4 times more than the inventory percentage. We seen more inventory in $1 – 1.5 million range this year and slightly slower sales so these ratios are down a little bit from prior years.
Compared to last year our inventory is up and so are our contracts, while our sales are about the, albeit with a shift to the higher-end. The movement of people from Westchester is also starting to build. I recently did an open house at 108 Pecksland which is on for $2.3M; we had 9 groups come through and 6 of those were from Westchester. I expect the trend of more Westchester buyers will continue, especially as the BET proposed and the RTM just approved a budget with no property tax rate increase.
The northern half is picking up, and some of the hot areas have cooled a little, but this is all relative. The one area that has had the biggest change this year is mid-country with noticeably increased interest, but value pricing is still key there and in every part of town.
Earlier this year the Greenwich Planning & Zoning Commission did something very courageous; they significantly loosened the zoning requirements on historic properties. Under the new regulations people with historic homes can build a second house on their lot or significantly increase the size of their present house. They might even be able to convert it to a business use if it is in within 1,000 feet of a business zone.
The adoption of this regulation was hastened by the demolish of three historic homes last years. All of which had stood in Greenwich for more than 150 years. With the new, more flexible historic overlay zone all three of these historic homes might have been saved from demolition.
The FAR bonuses are a little easier to understand, if you have a home in the R-20 zone (aka the half acre zone, though in reality the 0.46 acre zone) you can build a 4,500 s.f. house on a conforming lot. With the 15% bonus for a historic home you could expand up to 5,175 s.f. if granted by P&Z.
For the unit bonus, if you had a conforming lot with a historic home built before 1940 you could have 1.5 units on your lot. Now, you might ask what you can do with half a house, other than in certain divorce situations. The regs allow you to round-up to the next whole number. So, 1.5 units becomes 2 houses; one historic and one new.
The troublesome word here is “might”. Up until now I’ve talked about what you might be able to get, but the devil is in the details of the process. Just because you have a house that was built before 1940 does not mean that you are going to get an FAR or unit bonus. Your house must be “architecturally or historically notable”. A 1938 cookie-cutter, center hall colonial that has the same floorplan as every other house on the street and has no room for a second house is probably not going to qualify.
So, if the first transatlantic radio broadcast happened from your modest cottage or if Truman Capote grew up in your house you probably have a good chance for a bonus. Once again, it’s only probably, because we don’t know yet how the Commissioners will use their broad discretion.
The prior version of the historic overlay zone was a functional failure. For the new historic overlay zone regulation to work, P&Z needs to remove as much risk and cost as can reasonably be done. For example, a guideline that a house that is older than say 1880 is presumptively historic if major elements of the original structure and exterior survive, would encourage applications.
So just how much of our market is historic. Of our 615 house listings, 7 were built before 1800 and 22 were built in the 19th Century. Together, they are less than 5% of the market. The “real” number is even lower as some of these historic homes are that old in date only. Many of these housed have been so extensively renovated that little is left but some hand-hewn beams in the crawlspace.
The process is complex and requires a variety of skills to analyze what could be done and your chance of success. We actually have a group of five people looking at what options might be workable to save these old houses. One big factor is will we see the same extensive reports for a modest 1790 house on the Byram River as we see for a 1920 great estate.
The good news is that I think every member of the Commission wants to do what they can to save historic Greenwich and I know Director Katie DeLuca has made this a priority. We have a workable regulation, now if we get a workable process that takes in to account the means of the applicant and value of what is being requested, we could save a lot of Greenwich’s history from the wrecking ball. The first few applications will set the tone for this new regulation.