The third quarter of 2019 saw real improvement over the first two quarters of the year, and in many markets it was the first quarter to experience sales growth in single family homes over the same period the prior year since 2017. Even the upper end experienced a turnaround in certain areas where the luxury segment has been stagnant for some time now. The gains we witnessed across our markets, though based on one quarter alone, leave us cautiously optimistic moving forward. The meter appears to have changed, with the metrics pointing to a recovery in areas where closed dollar volume has waned in recent quarters.
In the first half of this year, Westchester and Fairfield Counties felt the deepest impact in the market decline in single family home sales year over year, but a deeper analysis revealed that the upper end, which makes up just a small percentage of sales, had an unusually significant effect. In the third quarter, both counties for the first time in eighteen months showed an overall increase in units and dollar volume closed compared to the same time the prior year. In Westchester County, higher end sales over $2.5-plus million also had a far better quarter than the first two this year: they still declined versus the same time last year, but at a much lower rate. The performance in neighboring Greenwich was even better, with the previously lagging $3 million-plus sector demonstrating growth in unit sales and dollar volume versus the third quarter of 2018. The rest of Fairfield County has yet to see an uptick at the high end, but sales below $3 million were strong enough to leave the county ahead quarter over quarter. For a full review, please read the Westchester and Fairfield County sections of this report.
Elsewhere, our housing markets paced evenly with the third quarter last year. Sales results in the Connecticut Shoreline region and Berkshire County, Massachusetts, were similar this quarter to the same time last year, while Connecticut’s Farmington Valley region saw a small increase for the first time in 2019, and Litchfield County was nearly flat in unit sales as increases at the upper end sent dollar volume ahead. The high end of the market has also experienced a resurgence on the Shoreline among water-oriented properties, and even the Farmington Valley saw more $1 million-plus transactions this quarter versus this time last year.
If the downturn during the first half of 2019 partially resulted from the negative impact of the tax reform bill passed at the end of 2017, as well as further state and local taxes imposed by New York and Connecticut, by now it appears the market is starting to absorb those effects. In addition, our position has been that taxes represent just one aspect purchasers consider in their decisions. Other economic indicators are still positive, including the ongoing historically low interest rates; low mortgage rates, averaging 3.64% on the last day of September; unemployment that continues to drop, reaching an exceptionally low 3.5% at the end of the quarter; a booming stock market; and steady GDP growth, hitting 2% in the second quarter. Consumer confidence, ever the benchmark in gauging the health of the real estate market, has remained consistently elevated, standing at 125.1 in September according to the Conference Board Consumer Confidence Index. Nationally and globally, there may be volatile political or economic factors that could have some effect on housing. But clearly we have plenty of reason to feel encouraged heading into the final quarter of 2019.
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.
Paul E. Breunich
President and Chief Executive Officer
William Pitt – Julia B. Fee Sotheby’s International Realty