Be sure to check out the entire Second Quarter Market Watch report here for an in-depth look at the strength of our markets.
If the first quarter was consistently down, the second was more notable for its inconsistency from market to market. Certain areas remain behind the first half of 2017, while others are catching up or even exceeding the prior year. The drop off in unit sales in many markets was more a result of low inventory than low demand, and in several areas the high end is showing promising activity. Properties under contract overall, though not in every region, are increasing year over year, suggesting we will potentially recover some of the lost ground by year’s end. We may not finish 2018 ahead of 2017, given the slow start early in the year in the wake of the tax bill, but all signs suggest the market is starting to come back. This would make sense, given the current strength in the economy. By some estimates the second quarter GDP is forecast to hit 3.5%, unemployment currently stands at its lowest rate in 17 years, hiring is on the rise, interest rates are ticking up but still at historic lows, and consumer confidence, the key benchmark in analyzing the outlook on real estate, remains high. The Conference Board Consumer Confidence Index®’s most recent reading in June was 126.4 (1985=100), only a little lower than the record 18-year high of 130.0 from earlier this year.
The end of the second quarter found Westchester County with sales levels a little lower than this time last year, with unit sales overall declining by 5% and sales volume by 3% in comparing both the second quarter and the first half of 2018 and 2017. In Southern Westchester, unit sales decreased by 3% quarter over quarter as dollar volume was down just a slight 1%, while units decreased by 4% and volume by a small 2% year over year. In Northern Westchester, unit sales decreased by 10% and volume by 6% quarter over quarter, and for the year, unit sales and volume each dropped by 7%. Despite these numbers, in the southern county the entry price segments are performing well with declines mostly due to limited inventory, and in certain areas luxury properties are moving as well. Many of the core towns in the northern county are about even with last year.
In Fairfield County, unit sales in the second quarter this year versus the same period in 2017 dropped by 4% and dollar volume by 8%. Year to date, the county remains behind the first six months of 2017 by 4% in units and 6% in volume. Here, many of the key towns in the southern county are down for the year, though Greenwich has experienced an increase. The northern county’s decline is largely attributable to very limited inventory. The Shoreline, including New Haven, Middlesex and New London counties, saw second quarter 2018 unit sales slip behind the same period of 2017 by a small 2%, but dollar volume climbed ahead by 3%, and similarly, units year to date are behind the first half of 2017 by 4% with dollar volume up 1%. Limited inventory in the entry segments is holding back growth in units, while an increase in the high end is driving up volume and median sale prices.
Up in Litchfield County, the real estate market is trending just ahead of last year, picking up steam late in the second quarter after a slower start to the year. County-wide, unit sales this quarter compared to the same time in 2017 were ahead by a slight 1%, with dollar volume up by 5%, while year to date units have increased by 2% and volume by 1%. Across the state line in Berkshire County, unit sales and dollar volume caught up to the first half of 2017. For the second quarter, unit sales and dollar volume were a small 1% ahead of the same period in 2017, and year to date, unit sales stand 5% lower than the first half of 2017, with dollar volume up again by 1%.
New to our Market Watch this quarter is coverage of the Farmington Valley region of Hartford County, where we have just opened a new brokerage serving Avon, Canton, Farmington, Granby, Simsbury, Burlington, Hartland and West Hartford. Here, unit sales in the second quarter of 2018 versus the same period in 2017 increased by 8% and dollar volume by 9%, bringing sales almost even year to date. For the first half of 2018, unit sales are a slight 2% behind the same time in 2017, and dollar volume is ahead by 1%.
I hope you find this report informative on what’s happening in your market, and invite you to contact one of our sales associates if we can help you with any of your own real estate needs.
Paul E. Breunich
President and Chief Executive Officer
William Pitt • Julia B. Fee Sotheby’s International Realty
