Home sales in Fairfield continue to ride the real estate roller coaster. In 2016 demand for waterfront property soared and sprawling acreage sales dropped. The average home price rose, but the number of sales fell. Seven-figure home sales lagged—just three homes sold for more than $2 million—but those priced near the $650,000 sweet spot were snatched in an instant. The most expensive sale ($4.9 million) was a four-bedroom, six-bath French manor house on Sasco Hill Road. The least expensive ($125,000), on Bronson Road, featured two bedrooms, one bathroom and the train tracks in back.
In between, prices zigged and zagged, and so did buyers’ interest. “I cannot give you an overall assessment in Fairfield right now. It completely depends on the neighborhood and price point,” says Pam Foarde, with Al Fillipone Associates/William Raveis.
In addition to beach property, the area around Fairfield University is hot, as is the center of town, the Stratfield neighborhood and most anything requiring little maintenance and priced from $500,000 to $700,000. “You put a house on the market in the sixes or sevens,” says Pam Foarde, “and it’s in great shape in one of these areas, it’ll be bindered within a month.”
Rick Higgins, chairman of the Higgins Group, adds, “The cheaper, the better. What you get for $500,000 here, Westport and New Canaan can’t compete with.”
Buyers these days come armed “with a full dossier, and they say, ‘These are the six I want to see.’ There are buyers out there, but they want value. Without it, they’re willing to wait,” says Andrew Whiteley, president of the premier homes division of Al Fillipone Associates/William Raveis.
Their skittishness is not unfounded. Whiteley says that Millennials are the first generation in recent memory whose parents lost money in the housing market, adding that about 12 percent of mortgages nationwide remain underwater. While that situation has stabilized in Fairfield, it hasn’t disappeared. The third highest sale in town, a Georgian Colonial on Meeting House Lane, was a short sale at $3.2 million.
Buyers and sellers seem to be coming to terms with how much a house is worth. “There were two years when sellers felt like they were giving houses away and buyers felt they were overpaying,” says Whiteley.
“They’re more on the same page now,” adds Victoria Fingelly of William Pitt/Sotheby’s, “and that’s encouraging.” For example, “Southport Green did so well when it came into proper pricing.”
MORTGAGES & TAXES
Taxes, mortgages and a new variable—the presidential election—affected the real estate market’s health in 2016. “It was very quiet leading up to the election. People were in a funk because it was so nasty,” Fingelly reports.
Wall Street liked the results, apparently, because “the morning after the election, [mortgage interest] rates started going up and haven’t stopped,” says Michael Daversa, president and founder of Atlantic Residential Mortgage. The day before the election, the thirty-year fixed mortgage rate was 3.5 percent. By the new year, rates had already climbed to 4¼ and 4½ percent. “Wall Street figured out they like the new presidency, and when the stock market hits all-time highs that spells bad news for interest rates.” Higher rates halted the 2016 refinance boom and, in many cases, spurred buyers to act. “People who were just on the sidelines thinking rates would come down more jumped and ran real fast to buy and close,” Daversa says.
In Fairfield County, any mortgage that exceeds $601,450 is a jumbo. Traditionally the jumbo rate exceeds the conventional rate, but these days many banks are getting competitive with their financing because they want those $1 million or $2 million loans. Some even offer a lower jumbo rate if the homeowner kicks in a cash deposit. “A lot of banks are saying, ‘We’ll give you this rate if you give us $100,000 or $250,000.’ That’s to gain a mortgage client and to gain a client in assets,” Daversa says.
Fairfield’s tax rate, which, at 25.45, is among the highest of shoreline towns in lower Fairfield County, continues to effect home sales. “A beautiful house in Fairfield is worth only $3 million if it’s $6 million in Greenwich. Greenwich has lower taxes, and it’s a half-hour closer to New York,” Whiteley reasons. He and Higgins agree that the high tax rate has hurt sales, especially in the Sasco Hill Road neighborhood, but the pair notes that more house can be purchased for the same price in Fairfield than in Greenwich, Westport or Darien.
And compared to the tax rate of many towns in Westchester, Fairfield seems like a bargain. “Thank God New York is more expensive. It makes us look good,” says Foarde. “I just sold to a couple living in a two-bedroom apartment in Queens, and they wanted a yard. They didn’t even think of Westchester because of the taxes. But people coming in from Atlanta, from Texas—they’re shocked at the taxes.”
TWO LETTERS: GE
Some are still smarting from the loss of GE to Boston. “I’m really upset with GE,” Higgins says. “They hit us twice.” First, by leaving town, and second, by selling to Sacred Heart University (SHU), which will not pay property taxes because of its nonprofit status. “That was just twisting the knife. It’s just a real shame.” Some homeowners who worked at GE “cut the prices to the bone, relatively speaking. Their houses are empty or being staged, and they’re gone. In some cases GE bought the house and cut the price. It’s not going to help values.”
Fortunately, the move did not create a glut of empty homes. “Because GE was such an anchor, I think it was a more psychological loss than a monetary one,” Fingelly says.
Economic Development Director Mark Barnhart says SHU’s expansion could actually enhance the market. “Sacred Heart and Fairfield University are significant employers. They provide a tremendous economic impact. The students, faculty, support staff, parents who come in to visit their kids all have a tremendous effect on the region.”
ON THE HORIZON
Just like the height of those stilts under new beach houses, the upside is evident on the waterfront. Victoria Fingelly and Helene Salerno, who is with William Raveis in Southport, agree that new construction by the beach just might be the hottest area in town. Buyers there are informed. “When they come to you,” Salerno says, “they’ve already done the research” about neighborhoods, schools, taxes and proximity to Manhattan. “Now they come with questions about engineering, compliance, flood zones. They have questions about the house itself and the lot and the runoff calculations.” Buyers want to know about energy efficiency, the toxicity of insulation, paint, furnishings and counters, as well as radon and the lead content in nails and roof tiles. “The buyers have higher expectations. They want a healthier home.”
The desire for a healthier lifestyle is increasing downtown’s desirability as well. “Young couples want to walk or take their bikes. They would like to walk to school, walk to the library,” Salerno says. “I had a buyer last summer who could have afforded anything she wanted and she wanted to be able to walk with her kindergartner and third-grader to school.”
Whiteley had a similar experience with a buyer who purchased a weekend home on Sasco Hill Road in 2015. “He lives on Central Park West and said, ‘I can be here in an hour.’ There are beautiful golf courses here. The family can be ensconced in the summer and you can commute each day. You can’t commute from [a summer home on] Long Island.”
Foarde says many new buyers in Greenfield Hill are also seeking community. “They don’t seem to want big chunks of land. They want to be closer to their neighbors. They’re used to living like that in these little brownstones, and they like that family feel.” She says the number of homes sold in this area eeked up, to 92 in 2016, and there are deals to be had.
Higgins agrees. “Greenfield Hill is coming back in a big way. It’s an alternative to Litchfield County.” He says it offers big lots and the draws of Fairfield: “a large collection of stores, it’s on the water, and an hour and ten minutes from New York City.” Higgins markets the town’s attributes. “You’re not just selling a house, you’re selling the town. There’s no town around here like this.”
Mixed-use development to open in Fairfield
This spring 108 apartments will come on the market at 665 Commerce Drive. The units at the Trademark atop 14,000 square feet of retail space. Penny Wickey, principal of Saugatuck Commercial Real Estate, says the five-story project will attract “actively engaged” tenants who appreciate the pool, deck, clubhouse, fitness center, high-end appliances, oversized windows and proximity to the Fairfield Metro train station.
Instead of one large retail tenant anchoring the site, developers Abbey Road Advisors aim for a “small-market concept,” which includes several tenants, such as a bakery, florist, cheese-and-wine boutique, gift shop and clothing store, that serve residents. A subsequent phase will add more mixed-use buildings, creating an integrated “campus,” where people live, work and play. “This will be a real transportation-oriented development,” says Wickey, who cites the universities and food and entertainment scenes as major draws.
Near Fairfield center, a different hundred-unit rental project is in the pipeline for three acres on Unquowa Road. The development offers mostly one- and two-bedroom units. “There is a strong demand for different housing options,” says Fairfield Economic Development Director Mark Barnhart. “People want smaller unit sizes and rental options.”