Well, it's safe to say the housing frenzy has subsided. But don't believe everything you read in the news about declining prices across the country...real estate in Greenwich, CT is still holding strong.

Rumblings of an imminent recession have us concerned that we’re about to relive the horrors of 2008 all over again. But if we take a step back, we’ll see that the economy is in a completely different place now than it was 15 years ago.

Households are not over-levered, banks are not overexposed, and the government doesn’t have to bail out the entire financial system. Rather, the post-pandemic economy is in too good of shape – the 3.5% unemployment rate is near all-time lows, and consumers continue to spend despite higher prices for just about everything they want to buy. It’s in such good shape, in fact, that the Fed had to come in and break up the party to stop inflation from spiraling out of control.

Yes, the rate moves have hurt – but that was the point. Someone had to put an end to the runaway home prices so the average Millennial could afford to finally move out of their parents’ home. While the current ~6% mortgage rate seems unfathomable compared to the 2% we all got used to, it’s still attractive when we remember that our parents paid upwards of 15% to borrow money back in their day.

So, has the Fed’s plan to curb inflation worked? With demand for housing pulling back and prices starting to come off their highs, it appears it has…in most of the country at least.

Greenwich, however, is a different animal. Home prices remain elevated because of a lack of inventory. Sellers don’t want to swap their 2% mortgage for a 6% one, and building activity has been muted as the costs of materials, labor, and money have all risen substantially. So, with less people moving and less people building, supply has remained stagnant.

Despite higher mortgage rates, an abundance of buyers remains, causing a problematic imbalance in supply and demand. With inventory down 20% year-over-year and average days on market down 38%, more buyers are fighting over fewer homes, which has pushed prices up 8% from last year’s levels.

These supply and demand dynamics are what have kept Greenwich property values elevated while other markets have started to decline. But when you compare how Greenwich has fared since the Global Financial Crisis versus the rest of Connecticut, there’s still some value left in the popular suburb compared to its neighbors.

Let’s dig into the numbers to prove it. When the housing market crashed in 2008, home values plummeted throughout Connecticut until they ultimately hit a low in 2016. Greenwich was no exception. But how much did Greenwich recover from its lows versus the rest of Connecticut? Greenwich’s 41% increase from trough to peak falls short of Connecticut’s 51% move from the lows to today. While Greenwich has recovered some of its lost value since the crash, it still has more room to run relative to the appreciation its neighbors experienced.

On the flip side, let’s look how each market has moved from the last peak to the current one. In Connecticut, home values are 17% higher today than they were at the height of the market in 2007. But in Greenwich, they’re only 3% higher…which means we’re basically back to where we were before the 2008 crash. Ironically, it took a new crisis to finally recover from the last one.

Let’s put all this data into context. The Greenwich real estate market went sideways from 2008 to 2019 as buyers had PTSD from the housing crisis and Millennials postponed homeownership in favor of focusing on their careers, waiting longer to have kids, and investing their money in other assets.

Then the pandemic hit, causing an unprecedented appreciation in an incredibly short period of time as city-dwellers sprinted for the suburbs in search of more space and safety. For those of us who have tried to buy a home during Covid, it’s been almost paralyzing watching prices skyrocket 30% in just 3 years. But while Greenwich’s 30% move is undoubtedly hard to digest, it’s a little easier to stomach when you realize prices throughout Connecticut are up 45% over that same period.

In looking at the bigger picture, the economy is in better shape now than it was before the crash, but Greenwich home prices have hardly moved since then. While home values throughout Connecticut have surged past their previous peak to make new highs, Greenwich has merely come full circle.

If that analysis doesn’t convince you that Greenwich is still attractive, just take a look at the taxes. This may come as a surprise, but Greenwich has the lowest property taxes out of all the New York City suburbs in both Connecticut and New York, thanks to the big businesses in town that help subsidize the cost.

To calculate its property taxes, Connecticut uses a “mill rate”, which equates to $1 dollar of tax for each $1,000 of assessed value, or 0.1%. In Greenwich, the mill rate is 11.53, meaning the tax for a property assessed at $1 million will be 1.153% of that value, or $11,530. When compared to the 27.17 mill rate in Stamford, 17.23 in Darien, and 18.37 in New Canaan, Greenwich is the clear winner.

If you think those numbers sound high, beware venturing over the border into Westchester County as the taxes start to multiply, both in how much you pay in taxes and how many taxes you pay. While Greenwich has just one property tax, certain towns in Westchester County have multiple that are split between city, town, village, school, and special district taxes – and they are not mutually exclusive. Depending on the town, you might have to pay two or three of these taxes. After adding them all up, the total amount you pay could be double or even triple what it is in Greenwich.

While you may be tempted by the lower price tags in Westchester County, you’ll have to evaluate whether the higher tax payment is worth it. Remember, your home is an asset that can hold value, but taxes are a cost that you can never recoup.

To bring it all home: with its unique combination of low taxes and proximity to New York City, Greenwich will always be an attractive suburb. While prices remain elevated due to a lack of inventory, Greenwich hasn’t experienced as much appreciation as the rest of its neighbors in Connecticut, which tells us there’s still some value there.

So, if you’re looking to move to the suburbs, don’t skip over Greenwich. Despite the average $2.5 million price tag, with home prices starting at $400,000, there’s something for everyone here.