By Amanda Bryan
In a recent conversation with an agent representing clients in Darien, he mentioned his client had just lost bidding wars on two different $7,000,000+ non-waterfront houses in Darien and I jokingly told him to start showing his client houses in New Canaan, since we have some beautiful listings for sale in New Canaan in that price range.
I said it anecdotally but when I went back to look at currently available options I noticed a startling statistic: the average list price in New Canaan is currently $4,138.774. Then I thought, ok fine, that’s the average and there will be outliers, let’s look at the median (if you put all of the house prices in a list and picked the one in the middle) because that’s a better representation of the overall picture. Even the median asking price in New Canaan is $3,875,000.
The Reason
At the moment, you’ll find zero houses for sale for under $1MM and zero under $1.1MM. The least expensive home for sale in New Canaan currently is $1,179,000. Based on our team’s buyer pool, many buyers fall into two categories: “up to 1.5MM” and “up to 2MM.” The conundrum for the up to 1.5 buyer is that the limited inventory available consists of under 2000 sq ft homes or larger homes that need considerable work, pushing them over their overall budget. And if you’re looking to spend “up to $2MM” right now there are only 3 homes on the market.
By contrast, of the 54 homes available in New Canaan, 32 of them are priced over $3,000,000. 7 of them are between $4-5MM and 10 are between $5-7MM. Many of these homes linger on the market longer because high end buyers have more choice and less urgency. Of the homes that have sold in the last 6 months, houses priced over $4mm have averaged 175 Days on Market (even after removing new construction which can skew the statistics) as opposed to 70 days for houses under $4MM.
The Solution – We need a rate drop
The scarcity of homes under $1MM and even under $1.1MM and the abundance of homes for over $3MM presents a real challenge for entry-level home buyers. Most current owners of $1mm-1.5mm homes, who want to trade up, are staying put until lower rates ease transitioning to a bigger house and mortgage. While Wall Street is still betting that the Fed’s first rate cut will come by its June meetings, the CME Group’s FedWatch tool (which calculates the odds of rate movement) shows that since February the odds of a rate cut have dropped from a 99.5% chance to 73.1%. The hope is that this rate drop will indeed come, and be enough to move the needle for would-be sellers to motivate and put their homes on the market to pursue more expensive homes. The risk of course is that a small rate drop will motivate new buyers to jump in an already oversaturated buyer pool but won’t be enough to prompt sellers to sell their houses which will exacerbate our current market imbalance.
So Darien buyers, take note: There are twice as many homes to choose from in New Canaan (25 in Darien, 54 in New Canaan) and if you’re looking to spend more than $3,000,000, we’ve got you covered.
Amanda Bryan is a native New Canaan resident and full-time realtor serving New Canaan, Darien and Rowayton. After receiving her MBA and beginning her career in financial services, Amanda pivoted to residential real estate 17 years ago. She is co-founder or Team Saxe + Bryan of Compass with business partner Christine Saxe. Amanda is the mother of 3 children, owner of too many pets and has a mild tennis addiction.
amandabryan@compass.com
