Despite the talk of urbanization drawing the millennial generation to the cities, the Fairfield County and regional residential housing markets are showing significant growth with records being broken quarterly, bucking the trend of suburban flight to the cities.
“Sales activity in outlying suburbs is rising rapidly to unusually high levels,” said Jonathan Miller, president and CEO of the Manhattan real estate consulting and appraisal firm Miller Samuel, Inc.
“We had the most sales in Fairfield County in a decade for the first quarter,” said Miller, who authored the recent first-quarter market report issued by the Manhattan-based real estate firm Douglas Elliman Real Estate.
According to the report, first-quarter sales of single family homes and condominiums in Fairfield County were at 1,961, an 8.7 percent increase over the 1,804 homes sold in the same period in 2015.
The average sale price also was up, rising 4 percent from an average of $649,085 in Q1 2015 to $675,198  in the first quarter this year. The median sales price in Q1 2016 was $382,000 ”” a 6.5 percent increase over the Q1 2015 median of $358,750
The city, especially the rental market, has hit some sort of affordability threshold where the rental market is starting to level off at very high levels and many of those would-be renters are becoming first- time buyers or just buyers in Westchester and Fairfield” counties, said Miller.
Miller described New York City as a bowl of water spilling over its edges. Population growth is five years ahead of census projections and employment levels are growing at a record pace with the highest number of employees currently working in New York City in its history, he said.
Rents and housing prices are at record or near-record levels. And housing being built for rent or for sale is aimed at the luxury end of the market due to high land prices, he said.
“The term luxury has now been replaced with super luxury,” Miller said.
The trend is running contrary to widely held views that a new wave of urbanism is replacing a preference for suburban living.
“After the financial crisis, it was all about new urbanism and the city, and the suburbs were sort of left over from a different era, when in fact the suburbs are competition for the city and what we are seeing now are the early stages of the suburbs taking some of the demand from the city,” Miller said. “This is the suburban moment.”
It is not that the 20- and 30-year-olds of the millennial generation don”™t want to live in the city; they just can”™t afford it in today”™s economy, he said.
“Millennial wages are falling because their jobs are less about careers and more about retail and other lower-paying service jobs,” he said. “Intentions or hopes are one thing, but affordability is quite another thing. We need to see a shift in the wages they are being paid for them to make a big impact.”
The new economic and housing paradigm is having a significant impact on the Fairfield County housing market, according to a first-quarter market report by William Pitt and Julia B. Fee Sotheby”™s International Realty.
Overcrowding in New York City schools is also driving families from Manhattan and Brooklyn into Fairfield, said William Larkin, a brokerage sales manager in New Canaan for William Pitt Sotheby”™s International, in the report. Those buyers are looking for “the perfect package” home that”™s competitively priced and move-in ready.
“Today”™s buyer is well-educated on the dynamics of the market, and highly concerned about overspending, especially when considering a home”™s future resale value,” Larkin said in the report. “The hottest price range tends to be around $1.25 million to $2 million, where properties are experiencing multiple bids. As in the top end, if that price is perceived to be even a little off, the property won”™t sell.”
High-end sellers in towns such as New Canaan, Greenwich, Darien, Fairfield, Southport and Westport have become highly tuned to properly pricing their homes and this has had a trickle-down effect on the lower end of the Fairfield County market, Larkin said.
The first-quarter housing market in the northern part of the county was strongest in the lowest price categories, according to the Sotheby”™s report. In Ridgefield, for example, 63 percent of all sales in the first quarter were for properties priced under $599,000. Data on pending sales, however, suggest that the second quarter will see more activity in higher price ranges.
Among single-family homes priced up to $799,000, there was a 6 percent increase in sales in this year’s frist quarter compared with  Q1 2015, from 937 homes sold to 995. In the price range of $800,000 to just under $1.5 million, 189 homes sold in the first three months this year, a 10 percent increase from the same period last year.
Bidding wars are frequent, particularly in the lower end of the housing market in close proximity to New York City, said Roberto Vannucchi, Douglas Elliman executive vice president for Connecticut and Westchester County.
With more inventory than there are buyers and New York City parents about to find out whether their children were accepted into their desired schools for the fall, brokers at Sotheby”™s expect more buyers to enter the Fairfield County market as the spring house-shopping season hits full swing and drive an overall softening of prices.
“It”™s a great time to be a buyer,” Vannucchi said.
why would more buyers soften prices?