September Market Research Note

The Market Had Inventory. Buyers Had Fewer Choices.

Executive Take: What the latest evidence suggests

By nearly every conventional measure, Westport delivered an exceptionally strong third quarter.

New listings declined 32.5% compared with last year, yet closed sales declined only 4.1%. Homes sold nearly 24% faster. Buyers paid an average of 103.7% of asking price. The quarterly average of monthly median sale prices increased 6.1%.

Those statistics describe a remarkably resilient market.

They do not fully describe the market buyers encountered as the quarter progressed.

Throughout Q3, some homes generated extraordinary competition, selling for 120%, 130%, and even 135% of asking price. Others sold below asking, expired, or were withdrawn despite competing within the same inventory-constrained market.

By the end of the quarter, another distinction had emerged.

The median asking price of Westport's active inventory had climbed to approximately $5.7 million, while the median price of homes that sold during Q3 was $2.55 million. Seven listings expired during the quarter with a median asking price of $5.5 million. Seven more were withdrawn with a median asking price of $4.25 million.

That does not mean buyers stopped purchasing expensive homes.

They didn't.

Westport recorded multiple successful transactions above $5 million during the quarter, including sales at $5.7 million, $6.55 million, $7.3 million, and nearly $9 million.

The distinction was not simply price.

It was whether buyers continued to view the homes available to them as compelling opportunities at the terms being offered.

September made that distinction harder to ignore.

Closed sales fell 50% compared with last September, yet the homes that did sell continued performing well. They sold 17% faster than a year ago and averaged 101.5% of asking price.

The market did not simply become weak.

Something more nuanced was happening.

The number of homes available and the number of homes buyers considered viable choices were beginning to look like two different things.

Interpretation: Why we believe the market is behaving this way

Westport's third quarter completes a progression our research has been following throughout the summer.

In July, we observed that Westport homes were competing for preference.

Buyers had meaningful alternatives, and the strongest outcomes occurred when a property distinguished itself from every credible substitute.

August tested that principle under different conditions.

New inventory fell dramatically, yet buyers did not respond by lowering their standards.

Scarcity reduced choice.

It did not reduce judgment.

Q3 now reveals the consequence of those two behaviors operating together over time.

Buyers compare.

They exercise judgment.

They purchase the opportunities that survive that comparison.

And gradually, that process changes the composition of what remains.

This is an important distinction because conventional inventory statistics treat every available property equally.

Buyers do not.

A newly listed home priced appropriately for its condition, location, and competitive set may represent a meaningful new opportunity.

A home that buyers have repeatedly passed over at its existing price may technically add to inventory without adding much to effective buyer choice.

Both count as one listing.

They do not function as the same supply.

That helps explain one of the apparent contradictions of Q3.

Westport entered the quarter with extraordinarily limited new supply. Yet buyers absorbed enough of it to produce almost as many transactions as the prior year.

At the same time, the inventory remaining became increasingly concentrated at prices well above where most transactions were occurring.

This does not suggest an absence of high-end demand.

Several of the quarter's strongest outcomes occurred at the upper end.

It suggests something more consequential:

Scarcity is property specific.

A market can have relatively few homes available while still having an abundance of properties buyers have already decided don’t justify action on their current terms.

Conversely, a single compelling new listing can enter that same market and immediately feel scarce because several buyers independently reach the same conclusion at once.

That is why extraordinary bidding wars, full-price transactions, negotiated purchases, expirations, and withdrawals can coexist within the same town and the same quarter.

They are not contradictory outcomes.

They are evidence of a market continuously sorting between what is available and what buyers perceive as opportunity.

Implications: How intelligent buyers and sellers should think about this

For sellers, Q3 challenges one of the most comforting assumptions in a low-inventory market:

There aren't many homes for sale, so buyers will eventually come to mine.

Westport's experience suggests otherwise.

Low inventory can create attention.

It cannot create conviction.

The relevant competition is not simply the number of homes listed for sale. It is the number of credible alternatives a buyer believes are preferable to yours - including the alternative of waiting.

That places greater importance on pricing, preparation, presentation, condition, positioning, and timing.

Each influences whether a property becomes part of the buyer's serious consideration set or merely part of the inventory count.

Our own Westport experience during Q3 illustrated the distinction from both sides.

We represented the sellers of 18 Vani Court, which sold above asking after one weekend on the market, as well as the sellers of 5 Drumlin Road, which also sold above asking.

During the same quarter, we represented buyers purchasing 22 Sturges Common for $3.0 million after the property had originally entered the market near $4.0 million.

The difference was not whether Westport had demand.

It was how buyers evaluated each opportunity at the moment a decision had to be made.

For buyers, the lesson is equally important.

Limited inventory does not mean every available home deserves urgency.

But it also does not mean patience is always rewarded.

When a property clearly distinguishes itself within a market offering relatively few credible substitutes, other buyers may reach the same conclusion quickly.

That is when decisiveness matters.

When a property has remained available because buyers have repeatedly questioned its value at the terms offered, patience and disciplined negotiation may create opportunity.

The advantage is not simply moving quickly or waiting patiently.

It is knowing which situation you are in.

The Principle We're Watching

Throughout 2026, our research has steadily refined what scarcity means.

First, inventory declined faster than demand.

Then buyers became increasingly selective.

July demonstrated that Westport homes compete for preference.

August demonstrated that scarcity does not replace judgment.

Q3 adds another dimension:

Supply and opportunity are not the same thing.

Inventory tells us how many homes are available for purchase.

Buyer behavior tells us how many of those homes function as meaningful choices.

That distinction may become increasingly important as we move into Q4.

If new listings replenish the portions of the market buyers have been absorbing, transaction activity may remain remarkably resilient.

If inventory grows primarily because homes buyers have already rejected remain available longer, the number of active listings could rise without buyers experiencing materially more choice.

That is what we will be watching.

Not simply whether Westport has more inventory.

But whether it has more inventory buyers want to buy.

Closing Thought

Westport's third quarter was strong.

That should not be lost in the analysis.

Despite receiving nearly one-third fewer new listings than last year, the market produced almost the same number of sales. Homes sold faster. Sale-to-list performance strengthened. Exceptional properties continued attracting exceptional competition.

September introduced a reason to look beneath those results.

Not because the market suddenly became weak.

Because the composition of opportunity was becoming more important than the quantity of inventory.

July taught us that buyers compare.

August taught us that scarcity does not stop them from exercising judgment.

Q3 showed us what happens next.

The market begins sorting the inventory itself.

Some homes disappear almost immediately because buyers recognize an opportunity and act.

Others remain, even in a market defined by scarcity, because availability alone is not enough to create conviction.

That distinction changes how we should think about supply.

The question is no longer simply:

How many homes are available?

Increasingly, the better question is:

How many of them do buyers still want to choose?

Because in Westport, inventory measures what buyers can buy.

It does not necessarily measure what they believe is worth buying.