The year started on a high note, with Westport single-family home sales surging 44% in January, compared with January 2011. While February and March unit sales held even with 2011, March statistics showed improved activity in the upper end of the market. One-third of the homes sold, closed above $2 million. However, the promise of a strong spring market quickly disappeared, as each successive month posted disappointing sales results. Year-to-date (6/20/12,) single-family homes sales were down 11.5% vs. the corresponding period, a year ago.
At the same time, inventory at the high end of the market continued to grow. This resulted in the current price distribution of homes available for sale, appearing to be out of synch with what the market will support.
Through the first half of the year, only one home sold above $5 million, closing at $5,250,000. Eighteen (18) homes are currently listed for $5 million or more. Based on the past twelve months, that would reflect six years of inventory in this price point. Expanding the high end to include homes priced at $3.5 million or more, just over twelve percent of the inventory is in that range, while only five percent of 2012 sales matched that price point. At the same time, twenty-two percent of new construction listings are priced above $3.5 million. Builders continue to build at the top end, but where are the buyers? Perhaps it's time to rethink the McMansion.