Greenwich’s hot real estate market could be cooling off

During his presentation Wednesday at the First Presbyterian Church, Michonski said he was offering facts — not his opinions — on the housing market.

The Greenwich market has experienced nearly two years of strong performance — with the high number of sales partially attributed to people moving out of New York City during the COVID-19 pandemic as well as to the strong national real estate market overall.

Also, the average price of a Greenwich home is now $3.1 million, which he said is a new record, up from slightly under $3 million in 2021. The median price for a Greenwich home is up 8 percent year to date over 2021, going up from $2.3 million to $2.5 million, he said.

“You can feel really good about that, but it masks some tremendous underlying weakness” in the real estate market, Michonski said.

Those weaknesses include a decline in sales contracts in the first six months of the year in addition to the downturn in the number of sales, he said, calling it “the most foreboding of the statistics.”

“It is down a whopping 52 percent year to date,” Michonski said. “That means the third quarter and possibly the fourth quarter, which is usually one of the weakest quarters of the year, is going to be down very dramatically” when it comes to sales.

A Stamford resident, Michonski is a former Greenwich homeowner and previously managed Coldwell Banker’s Greenwich office. He is the author of several books on the real estate market and is the founder and chair of Quigler Inc., a real estate app that provides information to potential homeowners.

Outside factors that he said will likely have an impact on Greenwich’s real estate market are centered around the national economy, specifically the national fund rate, which is rising in an attempt to slow inflation. Typically rates rise slowly, Michonski said, but when the pandemic began, the Federal Reserve cut it dramatically and now “with inflation roaring” the rate has increased at a quick pace.

“The Fed has decided to fight inflation by raising rates, even if that means a recession,” Michonski said. “What that tolerance risk is of recession is unknown at this point. … Nobody knows what this rapid rise (in the rate) means. We’ve never had this before. This is uncharted territory.”

Michonski pointed to national economic trends that can have an impact on housing sales: a lower demand for mortgages; an increase in mortgage bankruptcies; and layoffs at major mortgage and real estate firms. “Recessions in real estate have a ripple effect,” he said, because fewer home sales means a downturn in remodeling work, furniture purchases, pool installations and landscaping work.

“We have a slow, bumpy road in the immediate months ahead,” Michonski said.

But he was also quick to say that “this too will pass.” The economy could rev up with the upcoming midterm elections — because policy might change at the Fed and rates not continue to go up, Michonski said.

He found a silver lining in the Greenwich’s market, saying “Down isn’t always bad.”

“If you are a homeowner right now, if you wanted to sell your property, you’ve probably got a fantastic time. Prices are still up and the competition is down. New listings in Greenwich are down 68 percent. That’s the largest drop we’ve seen,” Michonski said.

But “many properties that had been on the market for many years were just swept up in 2021, which reduced inventory and means there’s very little competition out there,” he said.

And homes that are on the market are still moving quickly, Michonski said. Traditionally, it would take 120 to 150 days for a home to sell — and even longer during a slow market, he said. But with little available stock, he said it’s only taking an average of 91 days for a home to be sold.

“That’s remarkable that people are able to sell their homes that quickly,” Michonski said. “Don’t expect that to continue, but that is the current reality.”