Our 2019 First Quarter Market Watch is now live. The first quarter of 2019 saw a general decline in real estate sales across most of the markets we serve, similar to the phenomenon we observed at this time last year. The picture varied across regions, with Westchester and Fairfield Counties witnessing the most significant decreases in single family home sales versus the first quarter of 2018. Litchfield County and the Farmington Valley area of Hartford County also experienced decreases in volume and unit sales. Unit sales ticked up slightly in the Berkshires as volume dropped, and the opposite was true in the Connecticut Shoreline region, where unit sales dipped alongside an increase in volume as more properties transacted at the higher end. This increase at the upper end was not the trend in most areas, however. In fact, the luxury market was notably quiet.
In Westchester County, sales over $2.5 million account for just 8% of the total market in dollar volume and 2% in unit sales, yet most of the overall market decline here occurred above $2.5 million. Below that price point, where we see the vast majority of sales, decreases in volume and unit sales were more modest. Likewise, in Fairfield County sales over $2 million represent 8% of the market in volume and 2% in units, and again, volume and unit sales in this range decreased at a much higher rate than they did below $2 million. It appears the uppermost end of the market, which makes up just a small percentage of sales, is having an unusually significant impact on the numbers as a whole. Although we have previously observed diminished activity at the high end, this is the first time we have seen such sharp declines compared to the lower price points. For a deeper analysis, please turn to the Westchester and Fairfield County sections of this report.
Uncertainty surrounding the tax reform bill is playing a role in negatively impacting the market, yet property taxes represent just one consideration that must go into the purchaser’s decision process. The key economic indicators that continually serve as our guidepost provide reason for optimism as we head into the second quarter. The Labor Department jobs report in March demonstrated strong job growth with an exceptionally low unemployment rate of 3.8%, even as wages were reportedly on the rise. Mortgage rates have continued to drop, averaging 4.06% on the last day of March, while the Federal Reserve recently decided that interest rates, which still stand at historic lows, will not increase for the remainder of this year. The stock market surged in the first quarter, and GDP rose by a higher than expected 2.6% in the fourth. Finally, the Conference Board Consumer Confidence Index for several months now has reported consistently elevated levels of consumer confidence, a critical benchmark in gauging the health of the real estate market. In March, consumer confidence stood at 124.1 (1985=100). We will continue to watch these factors closely, but when consumer confidence is this healthy, we typically see demand in the real estate buyer pool follow suit.MarketWatch1q2019