At the close of 2016, a strong year for real estate in our market areas, we reported that buyers were jumping off the sidelines and into the marketplace in droves as the
Federal Reserve’s long-awaited rate hike finally took effect. The increase is causing mortgage rates to tick upward, motivating real estate intenders to act before they get
much higher. With further increases indeed expected to occur throughout the year, buyers know that the time is now, and across the board our agents are busier than ever. How did this frenzy of activity play out in our individual markets?
We had an excellent first quarter, with most markets posting increases in both sales volume and unit sales compared to the same period last year. Westchester County saw quarter over quarter increases of 13% in dollar volume and 7% in units, with Southern Westchester up by 10% in volume and 4% in units, and Northern Westchester by 22% and 14% in volume and units, respectively. Similarly, sales in Fairfield County were higher county-wide than they were at this time last year, with dollar volume rising quarter over quarter by 7% and unit sales by 9%. Up on the Connecticut Shoreline, comprising New Haven, Middlesex and New London counties, sales were very steady versus the first quarter of 2016, with dollar volume standing 1% higher than this time last year and unit sales 1% lower. In the Berkshires, sales results were very much on par with the exceptionally robust first quarter of last year, with volume 1% above that period and units 10% higher. It should be recalled that the first quarter of 2016 saw enormous gains over the same time the previous year. Lastly, Litchfield County, which usually kicks in during the second quarter with the summer as its prime selling season, exhibited a strong performance this quarter. Significant closings in the high end drove a 29% increase in dollar volume over the first quarter last year, with unit sales demonstrating a 9% increase.
This growth in the upper end in Litchfield County was the exception rather than the rule this quarter, though we have certainly seen some movement in the luxury sector elsewhere, perhaps most notably in Westchester County. For the most part, the highest price brackets remain relatively quiet, with each area’s entry level segment serving as the primary market driver. One constraint we are feeling, however, is a distinct lack of inventory at these most popular price points, in contrast to the oversupply of listings in the higher end. As a result, the many buyers we are seeing in the marketplace have plenty of competition, and several properties are enjoying multiple bids before going into contract. Clearly, there is an opportunity here for sellers, and as the weather improves and the spring market gets underway, we look forward to fresh inventory becoming available and further boosting sales.
The expected new wave of inventory is not the only indication that the positive activity will continue. Most of our markets are reporting increases in properties going into contract compared to this time last year, which has us optimistic on the second quarter. In addition, economic factors such as the first quarter rally on Wall Street, the US unemployment rate falling to a ten-year low in early April, the National Association of Realtors announcement that national home sales in February reached their second highest level since May 2006, and the aforementioned rise in interest rates all together lay a powerful foundation for a healthy real estate market. Perhaps most significant of all, The Conference Board Consumer Confidence Index® recently reported that in March the consumer confidence level increased to an incredible 125.6 (1985=100)—the highest since December 2000. If consumer confidence is traditionally the leading indicator in real estate, then we can confidently state we are well positioned for another great year.
I hope you find this report informative on what’s happening in your market, and invite you to contact one of our sales associates if we can help you with any of your own real estate needs. Be sure to check out the entire report here for further details.
Paul E. Breunich
President and Chief Executive Officer
William Pitt • Julia B. Fee Sotheby’s International Realty