The luxury market in Greenwich, Connecticut, an affluent town just one hour from Manhattan and home to many Wall Streeters, is showing signs of strengthening, as sharply reduced inventory pushed homes to sell faster and at higher prices in the third quarter, according to a Douglas Elliman report released Thursday.
During the last three months, the number of luxury homes sold—the top 10% most expensive homes in the market (including single-family homes and condos)—totaled 21, slightly down from last year’s 24. However, the median price for this category reached $6.5 million, a 34.4% increase from the third quarter last year, according to the quarterly report by Douglas Elliman.
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Other market metrics in the report, which is prepared by Jonathan Miller, chief executive of real estate appraiser and consultancy Miller Samuel, also point to an upward trend.
The average price for the 21 luxury sales in Greenwich was $7.3 million, up 29.1% year-over-year. The homes spent an average 189 days on the market before finding a buyer, 33 days shorter than the same period last year.
The tightening market condition is largely attributable to lower, better-priced inventory, the report said. During the third quarter, 180 luxury homes with a threshold of $4.48 million were on the market, falling 30.5% from last year’s 259. Luxury homeowners took an average 6.7% discount from their last asking prices, compared to 7.2% in the third quarter of 2016.
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"The luxury inventory is improving and we are finally seeing the listing prices in greater line with the market value," Mr. Miller told Mansion Global.
For the past several years, many luxury sellers in Greenwich were disconnected from the market and overpriced their homes, as was often the case in other suburban luxury markets, Mr. Miller said.
"They aren’t priced to sell, and those data point misled the market," he said, "A lot of that inventory is now off the market."
As a result, the absorption period—the time it takes for the listing inventory to dry up at current pace of sales—dropped from 32.4 months in the third quarter last year to 25.7 months.
The most expensive home sold during the third quarter was a seven-bedroom, 15,500-square-feet English limestone-and-brick mansion on North Street dubbed the "North Court." It fetched $20 million, according to Mr. Miller.
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Across Fairfield County, Connecticut, the market upswing is also noticeable but less accentuated than Greenwich, which accounts for about 60% of all luxury sales in the county.
The median sales prices of 341 luxury homes in Fairfield stood at $1.95 million by the end of September, representing a 6.8% increase from a year ago. There were 786 luxury homes for sale in the county, down 44.6% from the third quarter last year.
In terms of the overall market in Fairfield, sales activities logged the second strongest third quarter in the past 11 years. A total of 3,361 homes changed hands, up 1.2% from the same period last year. The median sales price was $410,000, a 0.6% increase year over year. Listing inventory was down 3.3% from 5,804 to 5,611, the lowest level in 12 years.