Real estate was off to a nice start when coronavirus hit
April shows the damage.
The real estate market in Ridgefield was shaping up pretty nicely in the first quarter of 2020. Then the coronavirus came to town.
And Ridgefield, along with the rest of Connecticut and most of the nation, went into lockdown mode.
“Offices have been closed to date, only open to agents for use of copy machines, etc,” said Lynne Boehm, president of the Ridgefield Board of Realtors. “Open houses and showings have been conducted virtually, although some showings have been in-person with everyone present practicing social distancing and wearing gloves and masks.”
And the changes to life that started happening in March show up in the Ridgefield Board of Realtors’ numbers for April — though the April market, while down, can’t be described as dead.
For April 2020, there were 22 closed sales on single-family houses, down 21.4 percent compared to 28 sales in April 2019.
Year to date— the whole first four months of the year — 92 single-family home sales were closed in 2020, up 21.1 percent from 76 closed sales in the first four months of 2019.
Trends in pending sales echo those in closed sales.
“Pending sales” were counted at 104 for the first four months of 2020, up 5.1 percent from 99 in that period of 2019. But April 2020 showed 31 pending sales, down 22.5 percent from 40 sales in April 2019.
What about prices?
The average sales price — all the sales added together and divided by the number of houses sold — was down 3 percent for the first four months of the year; $702,377 compared to $723,866 for January through April 2019.
With April compared alone, the average house sales price was $677,977 for April 2020, down 10 percent from an average price of $753,524 in April 2019.
The median sales price — the middle number, with half the sales higher and half the sales lower — was up 3.9 percent to $607,500 for the first four months of 2020, compared to $584,500 for that period in 2019.
The median house price was $637,250 for April 2020, up 2.4 percent from $622,500 in April 2019.
“The April year-to-date numbers indicate that the market, in the first quarter 2020, was off to a strong start prior to Covid-19. April numbers are a reflection of the pandemic lockdown,” said Boehm. “There are people still looking to buy and many looking to exit New York City to more spacious surroundings.
“The significant finding,” she said, “is the shortage of inventory.”
The number of new listings of houses for sale was down 65.1 percent, with 29 new listings in April 2020 compared to 83 houses entering the market in April 2019.
For the first four months of the year, new listings were down 25.7 percent with 197 in 2020 compared to 265 in 2019.
Boehm saw some cause for optimism.
“Pending and closed sales are up year to date,” she said. “Percentage of list price received is up slightly in both measures.”
The averaged “percentage of list price received” was up 0.4 percent to 97.3 percent for April 2020 compared to 96.9 percent in April 2019. For the first four months of 2020, sellers received 96.5 percent of their listing price, up 1.2 percent from the 95.4 percent average for the first four months of 2019.
“Overall, this may be a good time to list,” Boehm said. “With inventory low and the State of Connecticut opening up, buyers should be more robust.
“There are people still looking to buy and many looking to exit NYC to more spacious surroundings,” she said. “...we have seen a ‘flight from the city’ with many potential buyers/renters looking to move. Many are seeking rentals to ‘try out’ the area.
“With working from home as the ‘new normal,’ Fairfield County will become a more viable option if commuting to the city is no longer five days a week,” she said. “This should bring many future buyers into the state.”
At one of the selectmen’s recent budget meetings, Assessor Al Garzi surprised the board by saying real estate activity — and the revenue it generates for the town through conveyance taxes and recording fees — wasn’t as bad as might be expected with everything shut down.
“There is activity,” Garzi said later.
“I’ve been keeping track of the sales on a monthly basis, and I took a 15-year average for March and April,” he said. “The 15-year average was about $40 million for the two months. In 2020, we actually took in $35 million, so we’re not far from that 15-year average.”
The market for condominiums and townhouses experienced drops of both “closed sales” and “pending sales” — when April 2020 is compared to April 2019. But sales numbers looked better when the year-to-date numbers for the two years are looked at.
There were four closed condo sales in April 2020, down 55.6 percent from nine closed sales in April 2019.
But the year-to-date numbers showed closed condo sales up 10 percent, to 22 closed sales in the first four months of 2020, compared to 20 closed sales in that period of 2019.
Again, it suggests that 2020 was off to a promising start before the coronavirus started changing the way people live and work.
Pending condo sales in April were down 60 percent, to 4 in April 2020 from 10 in April 2019. They remained even when the year-to-date numbers are compared, with both 2020 and 2019 showing 22 pending sales.
Prices of condominium and townhouse units were up in 2020 compared to 2019, in both year-to-date and April comparisons.
The leap in median price sales for April is extraordinary, going up 125.3 percent to $416,750 in April 2020, from $185,000 in April 2019. It’s worth noting that the sample size was small, with just the four closed sales in April 2020 and nine in April 2019.
The year-to-date median price was up 26.7 percent to $239,750 in 2020 from $189,250 in 2019.
Average sales prices were also up, though by smaller percentages.
The average sales price for April 2020 was $360,361, up 1.1 percent from $356,444 in April 2019.
The average sales price for the first four months of the year rose 3.2 percent, to $318,277 for 2020 from $308,325 for 2019.
The percentage of list price that condo sellers are getting was 96.6 percent in April of both 2020 and 2019.
The year-to-date figure for the first four months of 2020 showed sellers were getting 96.7 percent of their listed price, down 0.6 percent from 97.3 percent in the first four months of 2019.
Boehm, the Board of Realtors president, was hopeful for a rebound in both single family and condominium markets.
“April is showing the average sales price -10 percent but year to date is only down slightly -3%,” she said. “If more buyers are seeking to live outside of cities, prices should hold steady as the increase in percentage of list price received indicates.”
Garzi, the town assessor, also expects the local market will benefit from people wanting to get out of the city after the coronavirus experience — much as they did after the 9/11 terrorist attacks.
“It is happening. It happened with 9-11, but it ended,” he said. “I think it’s going to be more — there’s going to be more than there was after 9-11.”
Boehm also said work has continued for the associates in Ridgiefield’s 18 real estate offices.
“Realtors have been considered essential during the Connecticut lockdown, and we have been showing properties as long as the sellers are OK with it,” she said.
“Social distancing, masks and gloves are the new normal when showing properties. Sellers are leaving lights on and interior doors open to help buyers/Realtors to not have to touch anything inside the home.”
She said there were reasons to be confident the real estate market will come back strong.
“Dr. Lawrence Yun, National Association of Realtors Chief Economist, recently reported on the national state of the real estate market. He and other economists report that this current COVID-19 market downturn is unlike 2008,” she said. “Currently, there is no subprime lending overstretching people’s budgets, and, there isn’t a glut of new building of homes as there was in 2008.
“The 2020 first and second quarter sales will be pushed out to third and fourth quarter with a rebound in first and second quarters 2021,” Boehem said.
“Home prices will remain steady with no ‘bargains’ in current market. Opening of economy and exit from big cities will bring many buyers and more listings.”