Real estate market review
Published 4:18 pm, Thursday, November 11, 2010
The Real Estate markets in Darien and Rowayton show significant signs of re-bounding from the drastic declines of 2009. That is the good news. Unit sales are up, prices are up, and inventories are at manageable levels. And while we are still a long way off the typical sales numbers we have seen during most of the last decade, we are at least on the way back. However, there is still some uncertainty. That light at the end of the tunnel we have been seeing might just turn out to be the headlight of locomotive headed our way, pulling freight cars full of new foreclosures and an array of more banking troubles. But first the good news. Let me explain.
At the end of the third quarter of 2010, when compared with the same time period last year, the average sales price in Darien was up 11.89 percent and now stands at $1,644,679. The total number of sales was up 60 percent year to date, and the total dollar volume of all sales in Darien was up 81 percent over the same time period last year. It took 137 days on average to sell a house in this year vs. 131 days in 2009. During the past decade we got used to seeing 330-360 sales per year on average. With a 60 percent increase in unit sales for this year vs. last year, the total number of sales is still only 210; that is significantly better than the 131 sales reported in Darien for the first three quarters of 2009, but still a long way to go to get to the 330-360 units we used to see in any given year.
Rowayton market is even more dramatic. The average sales price for the first three quarters of 2010 is up 37.6 percent when compared to 2009. The average sales price in Rowayton is now $1,487,631. It has taken longer to sell a house as well, an average of 188 days in 2010 as compared to 158 days in 2009. There has been a 25 percent increase in the total number of sales in Rowayton this year when compared to 2009. While these numbers are encouraging, a closer look at the data reveals there are still challenges ahead. While the total unit sales numbers are up by double digits in Rowayton, we are, like in Darien, still a long way from the kind of market activity we were used to seeing. During the decade 2000-2008, there was an average of 90-100 sales per year recorded in Rowayton. While we are up 25 percent for this year when compared to last year, that 25 percent increase brings the total number of sales to 38. There are 11 houses currently under contract and expected to close by year end, which should push the total sales numbers up to around 50 sales for the year. That is still only about half the number we would hope to see in a healthier market.
Also of note, there were a significant number of high end sales in Darien and Rowayton this year. During the first three quarters of the year there were 11 sales in Darien reported by the MLS for $4,000,000 or more; the highest sales price in Darien so far in 2010 was $10,200,000. During the first three quarters of 2009 there were 6 sales reported at prices above $4,000,000; the highest sales price last year was $5,100,000 .In Rowayton, the highest sales price reported during the first three quarters of last year was $2,200,000, and there were only two sales reported over $2,000,000. In contrast, so far this year, there have been 12 sales reported at prices over $2,000,000 with four of these sales being for prices over $3,000,000 and the highest sales price being $4,825,000.
Now back to that light at the end of the tunnel. There is some concern that we are facing a new train wreck coming at us; a freight train full of faulty foreclosures. Let's hope it jumps the track before it spills its mountains of paperwork into our markets. We are relatively fortunate to have avoided much of the foreclosure and sub-prime housing catastrophe which has devastated so much of the nation. While we have not seen entire neighborhoods go under and whole communities get wiped out, we have seen some impact. As in the sub-prime mortgage mess, what happens elsewhere in the national Real Estate Market can have an impact here. Unraveling this mess could take months, even years, and could gum up the works for new mortgage underwriting, further tighten the rules for obtaining new mortgages, impact the availability of credit, and weaken the health of the financial institutions involved. And while we might not be in the thick of the legal wrangling and the weeping and wailing that will undoubtedly accompany the straightening out of this new mess, we will undoubtedly feel some the fallout from it. That light at the end of the tunnel? Let's send that train down a sidetrack to unload its cargo as quickly as possible, so that we can get back to the light which shines on the end of the housing slump. Here's hoping. Stay tuned.