While the current outlook for the Connecticut housing market is mixed--according to the Warren Group, single-family home sales for the first quarter of 2007 were down 2.2% and the median sale price dropped 0.7%--there are local markets that have done extremely well. According to a new study, real estate investments in Greenwich, Conn. in Fairfield County have not only outperformed real estate investments elsewhere in the state, New England and the nation as a whole, but also outperformed traditional stock market investing.

The "Greenwich Residential Housing Value Study," commissioned by the Greenwich Association of Realtors and authored by Ray Kehrhahn, assistant director of the Center for Real Estate & Urban Economic Studies at the University of Connecticut School of Business, found that those who invested in this Connecticut community’s real estate in the last 20 years were rewarded with a 600% return on equity. This surpasses the performance of any of the three major financial indices, including the Dow Jones Industrial Average, the Standard & Poor’s 500 and the Russell 2000. The study also demonstrated a dramatically favorable equity return index for Greenwich real estate as compared to the rest of the state (approximately 300%), New England (approximately 400%) and the country (approximately 500%) over the same time period.

"Throughout national recessions and down real estate markets, Greenwich real estate has remained strong and vibrant," says GAR President Carolyn Anderson, who is also president of Anderson Associates Ltd. "This vibrancy can be attributed to an amazing combination of a unique community that has high standards, a beautiful coastal location 45 minutes from New York City, strong zoning, great schools, and representative town meeting government."

Mr. Kehrhahn added that home values in Greenwich are significantly higher than the rest of the state. The first quarter 2007 median sale price for a single-family home in Greenwich is $1.9 million as compared to $268,000 for Connecticut as a whole. "Not only do you have expensive homes, but you also have expensive homes out-appreciating the rest of Connecticut. That’s a unique combination," he said.

Mr. Kehrhahn pointed out that in contrast to the price appreciation seen in some markets such as Las Vegas and Florida, which have appreciated rapidly in a short period of time, his study showed that much of the Greenwich area has enjoyed sustained growth in housing valuations since 1994. He also noted that the overwhelming majority of homeowners in Greenwich are owner-occupants whereas up to 35% of the Florida and Las Vegas markets were investor-driven, which as we can currently see puts those markets at risk during a downturn. He said that while his analysis will show periods when home price appreciation in Greenwich slowed; there weren’t any periods when price depreciation occurred

The "Greenwich Residential Housing Value Study" examined and produced a trend/valuation growth analysis of homeowners’ equity based on the sale price of residentially zoned single-family homes in Greenwich, Conn. The valuation analysis included all market transactions of single family and residential condominiums and produced an index that trends year over year the valuation of residential real estate equity within the town of Greenwich. In addition, the study examined the relationship of the equity return index to the Dow Jones Industrial Average, the Standard & Poor 500 and the Russell 2000.

"The study clearly makes the point that investing in Greenwich residential real estate provides homeowners with significant opportunities for investment returns that rival or exceed traditional stock market investing," said Mr. Kehrhahn. "Bottom line, Greenwich real estate should be a portion of your investment portfolio if you live in the Greenwich [area]."
Information collected for the "Greenwich Residential Housing Value Study" included: physical property’s street address, owner’s address, month and year of sale, sale price, lot size, number of rooms, number of bedrooms, number of bathrooms, mortgage amount at time of purchase, year home was built, census tract I.D. and Zip code. The study required utilization of all market transactions associated with the transfer of ownership for residential real estate. The data aggregated in the study was collected by a team of University of Connecticut graduate students from land sales records available through the town of Greenwich for the years 1956 to 2006.