4TH QUARTER 2017 GREENWICH BROKERAGE

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1 Market Report 4TH Q UA RTER G RE E NW I C H B ROK E R AGE

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4 EXECUTIVE SUMMARY FOURTH QUARTER 2017 We are thrilled to share the news that Houlihan Lawrence Greenwich finished its third consecutive year as the #1 brokerage firm in units and volume. We truly appreciate the community and are committed to continuing to deliver the value and innovation that has driven so many successful deals. Our team is also ready for new challenges ahead. We are expecting an emphasis on some new criteria for the housing market as we move into As in the past, we will analyze the numbers of homes for sale compared to buyers. We also will focus on how close a sale price is to the initial price, days on market, and price per square foot. The stock market, which charged ahead in 2017 will still be a key driver for the market. But for this coming year there will be a new set of numbers that will draw more attention than in the past. The recent tax reform passed just before the end of 2017 will be an increasingly important data point in our housing market. The full impact is not yet clear, but with price sensitive buyers, property tax, as well as state and local taxes will be a bigger part of the discussion in According to Taxrates.org, Connecticut ranked 7th highest in the United States for property taxes. Put simply, the math will change for buyers, and smart sellers will be sensitive to that when pricing property. Home owners will only be able to deduct $10,000 of their property tax from their Federal tax return. In the past, there was no limit. And they will lose their state and local deductions. Mortgage deductions will be limited to $750,000. That is down from $1,000,000 in the past. The deduction for home equity loans has been eliminated as well. Interest rates remain low. And as mentioned above the stock market, with the Dow up 25 percent in 2017, is also a support for the market. But the bottom line for many buyers is still: how much will my payments be, and, without the tax deductions, can I afford this property? Here are some trends that we are seeing for the new year: Our markets are starting 2018 with strong momentum. High end closings were prominent at the end of 2017, and we see few obstacles to the continuation of that trend. The financial markets remain on track to move higher with corporate profits expected to be supported by the new tax reforms. However, we are carefully watching the macro economic environment for speed bumps and potential setbacks. Interest rates are rising but very slowly. Rates remain at levels low enough to support affordable loans for buyers. The upward trend creates an incentive for hesitant buyers to get off the sidelines, ahead of potentially more dramatic rate increases further out. Buyers are still demanding value in both price and condition of properties, and the new tax laws will likely increase their focus on being financially prudent. Buyers may be turned off by needing to do work, forcing some sellers to focus not just on making sure the price is well thought out, but that the condition of the property is strong enough to make a sale in the first place. Sellers need to take a detached and honest look at their home s true condition. For sellers, mispricing at the start will have consequences that may not be easily reversible.

5 EXECUTIVE SUMMARY FOURTH QUARTER 2017 Some regional statistics we d like to share: The big standout in Greater Greenwich was the $3 million plus category with a phenomenal 4th quarter leap of 54 percent. The $4 million and above category also saw increases. Overall buying activity picked up in the 4th quarter with unit sales up nearly 19 percent. Median and average sales prices rose. But there was some disappointment in the price points below the $3 million and higher benchmarks, with declines in Buyers are still vigilant about not overpaying. Sellers remain slow to engage with market conditions. Sales nearly doubled in Greenwich North of the Parkway in the 4th quarter. This sets up the area for a solid 2018, despite a fall in sales for Sellers however should take into consideration that it takes longer to sell a home than in any other part of town: 454 days on average. That is the highest in a decade. Some notable waterfront sales helped to lift average prices in Greenwich South of Post Road. That helped to soften the blow of news that last year s top performing area retreated this year with a 21 percent sales decline. Cos Cob sales rocketed 217 percent in the 4th quarter, despite a tough year. Buyers were motivated, pushing the number of days on market down to an average of just 150. Days on market also fell in Riverside where prices moved higher. The area was another strong 4th quarter performer with a sales jump of nearly 20 percent. Sales were up 7.5 percent for the year. Old Greenwich sellers enjoyed a rise in prices, with an uptick in sales in the $4-6 million range. Overall sales however did take a step back. The condo market is well positioned for It had a strong year with prices moving higher and a sales increase of 14 percent. The bottom line: we like these numbers. There are a lot of metrics to support increased activity in our markets, and deals that we believe can continue to support a solid upswing in both sales and prices. We look forward to a great Stephen Meyers CEO Chris Meyers President

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