Marion Filley's Closing Comments: June 19

As we move rapidly towards the end of the first half of the year, the number of houses sold in May was not reassuring. The drop of 42% was certainly, in part, related to weather 60 to 90 days prior, but cannot simply be blamed on that single factor. At the same time, the 14.8% rise in median price counterbalanced the fall in sales. While not as strong, the 10.4% increase in average sales compared to May 2013 was also reassuring. The average price of inventory dropped over $35,000 from the previous month. The inventory itself was up to 167, which is under 4% ahead of last year. It remains at or below the inventory level for June 1st from 2006-20012.

Similar to monthly performance, the drop in number of sales year-to-date is starting to raise the question of what the level of confidence is amongst the buying public. Closings are now down a little more than 19% (and the current pipeline does not suggest that we will catch up to the levels of last year in the next couple of months). The median price is up 6.7% and while not robust that is encouraging. Meanwhile, the average price is up 15%. However, the lower number of sales reduces the total single-family home revenue by just over 7% compared to last year.

These patterns exist among all neighboring towns with Westport and Ridgefield both down more than 20% in number of houses closed from 2013. New Canaan at a retreat of more than 15% and Norwalk at more than 17% are better than Wilton’s performance. Only Weston, at just over an 8% decline, continues to stay relatively close to last year’s volume of sales. For the most part, median and average are up in the towns with New Canaan performing the best (the average being driven by several sales over $5,000,000 compared to none at this time last year). Norwalk’s median is down slightly as is the average in Westport (due in large part to a lack of closings over $5,000,000 and a very large sale last year).

The lenders have recently added several new products, including a 15-year ARM among others that should be attracting more buyers to the marketplace. While absorption, as we discussed last month, is strongest below $1,000,000 — to be expected — through the end of May there were triple the number of sales for houses between $1,500,000 and $2,000,000 (nine vs. three in 2013) with another six in the pipeline. Currently there are 25 homes on the market in the price range.

Going over $2,000,000 the trend is reversed with a decline of sales in 2014. It seems either a lack of confidence in the economy or a lack of buyers (hard to believe with the current cost of money) seems to be holding the market somewhat in check.