By John Engel
Homes for Sale. For the third month in a row the amount of inventory fell in New Canaan and continues to drop around Fairfield County. Darien and Wilton see single family home inventory consistently below 50 homes since late 2022 while New Canaan has been below 75 since that time (with the exception being last May).
Closed Sales. I would have thought a 14% decrease in inventory would mean fewer sales. Lessening inventory does not have an appreciable impact on the number of closed sales. Last June July and August New Canaan had 27, 30, and 28 sales whereas this June, July, August we saw 32, 29 and 24 closed sales.
New Listings. There were 18 new listings in New Canaan in August. Darien had 11, Wilton had 14 and Westport had 23, new listings in all 4 towns are down from a year ago. Typically, the number of new listings declines each month from August to only a handful in December. On the one hand, sellers do not want to carry an active listing through the winter and are motivated to make a deal. On the other hand, my buyers know that we are a long way from next May when new listings typically peak and some of them can’t wait that long to move.
Case Study 1. Yesterday we listed a $2.5 million house in New Canaan. 30 agents attended the broker open house this morning. There were two showings immediately following the broker open house and one of them will be returning for a second showing tomorrow. It is a good sign that agents are attending the broker tour. Lesson: summer vacation is over, it’s time to get back to work and put some deals together.
Case Study 2. We listed a house 6 weeks ago and were getting nervous when it did not sell right away. Buyers were probing with low offers. The presentation was A+, the price was in line with our comps; did we misjudge the market? Sometimes it just takes one interested party to make a deal. In this case more bidders emerged, the offers came up and we have an accepted offer and a backup. Lesson: not everything sells in the first two weeks. Sometimes it takes a second bidder to give confidence to the first bidder to come up.
Case Study 3. We listed another house a month ago and while we got offers, we could not make a deal. In these cases, agents always have our doubts, wondering if we had made a mistake. The presentation was solid, the price fair. Why low offers? In this case the seller heard what the market was telling him and capitulated in front of multiple offers because they were all fairly similar, none willing to budge. When faced with a choice: accept in the Fall or carry the house and take your chances in the Spring market many sellers want to move on at this time of the year. They will return to a previous offer. Curious, in a market that is seeing rising prices. Lesson: our initial asking price proved optimistic.
Rental Case Study 4. The rental market is different from the sale market. I don’t want to say it’s an inefficient market with only 16 houses for rent, but it defies some of the logic we have come to expect from a for-sale market of 75. First, it’s much more seasonal. Half of all rentals take place in the 3 summer months. If a landlord missed the window and the music has stopped, sometimes a price adjustment isn’t enough, there’s nobody to hear it, everyone has taken a seat. Second, renters faced with elevated prices are MUCH more likely to look at the nearby towns. The thinking is much more temporary: we can do this for a year and pounce quickly if our dream home comes available. In the current case study the landlord has missed the summer high season for rentals and is now getting unsolicited offers to sell. He doesn’t want to sell because he intends to live in the house when the current job assignment ends. Lesson: after Labor Day consider allowing pets, be more flexible on the lease terms and consider reducing the price.
Notes from the Monday meeting: What happens when the buyer, after making an as-is offer, decides they didn’t really mean as-is and they want deficiencies to be corrected? Usually, the window for asking is limited to that inspection window in the first 7 days after offer acceptance. At that time the contract has not been signed and unfortunately its part of the negotiation. But, once the contract has been signed is there still room for asking and getting? After all, it’s human nature to keep asking for things until someone tells you no. Sellers, don’t get mad. Just say no if it’s outside the spirit and letter of the contract. Usually, when the requests come in at closing the buyer is at risk of their rate-lock expiring, requiring them to re-sign all the paperwork with new dates if the closing is delayed. Standard practice is one walk-through within 24 hours of the closing, and the buyer should only identify only those deficiencies which have emerged since the deal was made and the contract signed. I experienced this last week: the buyer asked for things and suggested the seller put money in escrow until the punch list was completed. The seller’s attorney said “no escrow, it will delay the closing to address the new list”. The buyer decided it wasn’t worth the hassle and stuck to their original closing date.
John Engel is a broker on The Engel Team at Douglas Elliman and his daughter’s wedding-of-the-century is now over. New Canaan is a great town to get married in. Is there a better place for a reception than Waveny House? Did the Waveny Conservancy plant those stunning gardens just for us? It sure felt like it. Carriage House catering does the majority of wedding catering at Waveny and it’s easy to see why (it’s a well-oiled machine)
