First Quarter 2019 Westport Results

Real Estate activity has had a bit of a roller coaster effect this year.  We seemed to be having a good start of the year that coincided with unseasonably warm weather in March.  Usually, things don't pick up until around February 15th, a date which usually coincides, more or less, with the Superbowl

The weather in mid to late February did not cooperate, and we saw a slowdown for a couple of weeks.  In the last couple of weeks the market has picked up again.

Recent activity can be best seen by properties that have accepted offers but have not yet gone to contract.  There are currently 39 properties that fit that category, including 28 which are listed for over $1 million.  In the early stages of the quarter we were seeing movement in less expensive properties.  The properties that are under contract are further along in the process and are more reflective of activity that occurred a little earlier.  Of the 42 properties under contract slightly more than half are over $1 million.

It could be that some people who have paid their income taxes are feeling a little better about what they paid.  The new mortgage limits and real estate tax deductions had been holding us back on the higher end.  That is evident in the number of closed sales in the early months of the year, which reflect activity that occurred two to three months before closing.

Through the first 3 months of the year Westport saw a significant downturn in the number of closed sales from the same three month period in 2018, from 84 in 2018 to 46 in 2019.  The median prices of our closings in the first quarter of 2019 seem to reflect an impact of the new tax laws, with a preponderance of properties selling near the $1 million mark.  The median price for the 46 sales has been $1,195,000.  However, the median price of the homes that have recently accepted offers is $1,495,000.  This is practically the same as the median price of first quarter closed sales in 2018, which was $1,400,000.

One should always reserve judgement after the first quarter statistics become known, because the second quarter, from April through June, is usually the busiest time of the year.  Special events such as elections can also have an impact on first quarter statistics as can the previously mentioned effects of the weather.

Mixed Results in January/February 2019

January & February 2019
 Results are Mixed

The 2018 Spring market was an active one, spurred in part by the new Trump era tax Legislation which had not officially come into play.  Early 2019 real estate sales point to activity that may be linked to certain mortgage and real estate tax  limitations imposed by the new laws.  New home loans cap that can be used for deductions has been reduced to $750,000 where they had been one million dollars previously.  The allowable real estate deductions are now capped at $10,000/year. 

Most affected by these changes are the blue states on both coasts where real estate values and real estate taxes tend to be higher than in the Midwest, South, and Southwestern regions of the country.  This is especially true in the large cities of the Northeast and their suburbs, as well as the large cities and suburbs of the West coast.

So it should not come as a big surprise that in the uncertainty leading into the 2018 tax season due to be filed by April 15^th of this year, that there is still some confusion in the minds of those currently looking to purchase.  In the towns which I cover, where the median price of homes is below the Million dollar mark (suggesting that most home loans will fall within the $750,000 parameters previously discussed), there has actually been increased overall activity.

In Weston and Wilton, which last year had median home sale prices of $702,000 and $780,000,respectively, closed sales in January and February of 2019 have surpassed the totals seen in the same months last year.  Weston had 15 closed sales in Janaury/February with the highest priced home sold being at 6 Calvin road for $1,350,000.  In 2018 there had been 14 in the same period of time and the highest priced home sold at 43 Norwalk Woods Road, which sold for $1,300,000.

In Wilton, there were 26 homes sold in 2019 compared to 22 in 2018 for the first two months.In 2018 there were 6 homes that sold for over $1million compared to 4 during the first two months of 2019.  The median price for Jan/Feb. in 2018 was $812,500 compared to $625,000 in 2019.  The highest priced home that sold in the first two months in 2019 was at 235 Cheesespring road for $1,760,000 compared to $2,850,000 for the home that sold at 21 School road in 2018.

Fairfield, which in 2018 had a median sales price of $630,000, also saw increases in the number of homes sold in Jan/Feb. of 2019.  93 homes sold during this period of time compared to 85 in the same period of time.  As far as the highest sales price is concerned, that number was considerably higher in the first two months of 2018, with the sale of 945 Sasco Hill road which sold for $4,650,000 compared to the highest sale of this two month period of 2019 when 3236 Congress street recently selling for $3,250,000.

In Westport, with a significantly higher median sales price of $1,220,000 in 2018, the number of sales in the first two months in 2019 dropped dramatically: from 51 in Jan/Feb, 2018 to 28 in the same period of 2019.  The highest sales number also dropped significantly, from $5,362,500 for the sale of 3 Charmer’s landing in 2018 vs. $2,847,768 for 16 Linda lane in 2019.

It may be that we will see these numbers change once people complete their taxes, and once yearly bonuses have been distributed, but it is difficult to predict. There have been an increasing number of multiple offers in the lower priced offerings which may be something that will continue for well-priced move-in condition homes below $800,000, more or less.

March 07, 2019 03:27 PM UPDATED 4 HOURS AGO

Worried about a recession in NYC? Relax

New job numbers show big gains in the last year

GREG DAVID   

Columnist

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Bloomberg

Three bad economic signals in the past month—weak
 retail sales,
 a disappointing report on gross domestic product and
 a huge
 trade deficit—
has the word recession in the headlines. But if you're
afraid
one is about to hit New York City, don't be.

Revised numbers for 2018 released Thursday by the state
 Labor Department
increased the gain in  jobs for last year by 52,000.
The agency now estimates
 there were 4.6 million jobs in the city
last month.
 The exact figure, 4,598,700, is also a surprisingly
impressive
 95,000 higher than it was in December  2017.
These
 figures reinforce the headline on the city comptroller’s
 quarterly
 economic report issued a month ago: "NYC Economy
Surges in Q4 2018."

State Labor Department

Here are the key
 changes and
what they mean.

Manufacturing lost more 
jobs than originally estimated. 
This is a perennial because each
  year there seems to be a small
 rebound in 
factory jobs that disappears when
 better data
 is available. The sector now accounts for only                                                              69,000 jobs in the city or 1.5% of the total.

Information jobs are growing. The revision boosted the
number of jobs 
    by 6% to about 200,000.

Companies continue to build out their operations staffs.       
Administrative
 jobs were revised upward by 12,000 to about a quarter
 of a million

Home  care just keeps growing. This is another sector 
with about 
200,000 workers . The revision added 7,000.

What is Mayor Bill de Blasio thinking? The number of
government jobs in
 the city was bumped up by 38,000 with the city accounting
for all but 1,500
of the additions. An updated chart from the Citizens Budget
 Commission
certainly shows what the mayor has done to head count,
 and it is quite a financial burden.

Thoughts on the Case-Schiller Index and the Upcoming Spring Market

	EffectiveDate	Index Level	1 MTH	3 MTH	12 MTH
Index Levels
S&P CoreLogic Case-Shiller New York Home Price NSA Index	Sep-2018	199.65	0.23 %	0.78 %	2.62 %

As lower Fairfield County is directly impacted by real estate trends in New York City, I keep an eye on these figures both for looking ahead to get a sense of where we may be heading, and to have a look back at the past to have a sense of perspective. In August 2008, (just after the stock market crisis)  for example, the New York index level was at 161.94 compared to 199.65 today. To get some additional perspective, the levels we are seeing today are quite similar to the July 2005 level of 199.86.  Case-Schiller saw its highest levels in New York in June 2006, at 215.25. After the crisis of 2008 the levels went through a roller coaster of dips and rises through April 2012 when the nadir of 157.95 was reached.  Since that time we have continued to see periodic small swings in the market with a general move upwards. The Fed raised interest rates in September and most of my colleagues in the mortgage business expect them to rise further. What is the likely impact going to be on our real estate market? 30 Year Fixed mortgages (for those with good credit) are still below 5%.  When I entered the real estate business rates were above 8% and we were thrilled when they went down to 7%. Mortgage rates are still historically low, as is unemployment, and inflation. We live in a world where we are bombarded each day with information. So much so, that it can be difficult to see the larger picture. There are some analysts who feel that the real estate market will further correct itself.  Some home sales in our area have been motivated  by sellers who are of that opinion. As mortgage rates are likely to rise slightly, that will make make home prices somewhat more expensive, so I wouldn't be surprised to see a slight adjustment if that happens in the spring.  On the other hand, pricing is also linked with inventory.  If inventory is low and demand is high we should see stable pricing. Inventory levels in the high end of our markets remains high, and pricing for homes over $1.5 million in some markets and higher in others, has been directly impacted by that. Each market is different, but in general, homes in excellent condition under $900,000 have been selling well. Inventory levels are still above the levels that we saw in the period of 2003-2006, though, including on the lower end of the market. In our area, towns that are not directly on the New Haven train line have seen their prices more negatively impacted during the past three or so years.  Rising taxes in those towns have also impacted selling prices. Our values still appear to be relatively reasonable when compared with the cost of New York apartments.  Our great schools, diverse housing stock, great amenities, and beautiful countryside should soon be attracting those millennials reaching their 30s who will soon be having children, and will be reconsidering the costs of living in the city and private schools versus commuting from the suburbs.