Monday, July 24, 2017

What Makes a Neighborhood?

We recently talked at a meeting about trends in neighborhood preferences among buyers.  The average first-time homebuyer is a millennial, and the average buyer is a Gen Xer.  For a long time, people thought that those groups would only live in cities, and only commute on foot, by bike, or by public transportation.  It seems now that that's not entirely true, but there are some real differences that our agents are seeing in Greater New Haven.

Once younger buyers have children, they care a great deal, as did their parents and grandparents, about school quality.  They also tend to prefer more space, both inside and out.  Unlike their parents, however, they want to spend less time commuting, maintain less in the way of house and grounds, and live in a setting with shops, restaurants, and parks.  That's what is meant by the new "walkability" scores that show up on real estate websites.  People want to be able to get milk, see a neighbor, or arrange a play date without getting into a car. 

We are seeing this show up in New Haven, for instance, where East Rock now seems almost suburban to buyers, but has sidewalks and foot traffic everywhere, with coffee shops and other neighborhood attractions and institutions.  Most people drive many places, but want the freedom to walk children to school, or sit on a front porch and converse with passersby.  It's a feeling of safety in numbers, but also of community.  Bigger homes on bigger lots that are farther apart appeal to a different group, smaller in number, that want to entertain, love the spacious feeling of older homes built in a bygone era of grandeur, and want backyards and big gardens.  They also like walking places, but crave more privacy. 

In the suburbs, we see the same trends playing out. Spring Glen, with its high walkability score, is selling quickly.  On the Shoreline, houses and condos near the Guilford Green are at an all-time premium.  There is a second reason for this, which is that older buyers also care about walkability and convenience, and they also want less space and smaller lots to maintain.  The two groups compete for the closer-in properties along the Shoreline, although the smaller homes in East Rock are still large, and attract mostly growing families. 

This means that there is a large supply, almost everywhere, of the biggest homes in a town.  Some of that relates to taxes, but just as much to lifestyle.  Whether busy with young children, or free to travel more, buyers are choosing smaller, sometimes cheaper, and always as walkable as possible.  So, if that's the type of home you own, think about now as a good time to sell!

Thursday, July 13, 2017

Southwestern CT housing prices strain owners and renters (from CT Mirror)

The following article is from the CT Mirror and was written by Schae Beaudoin, please click here to visit CT Mirror online

Almost half of Americans pay too much for their rent, and in southwestern Connecticut those numbers are even higher, says a national study.
Harvard University’s annual State of the Nation’s Housing report says 18 million renters across the nation are burdened by their housing prices. Homeowners and renters are considered “burdened” if they spend more than 30 percent of their income on rent.
In Fairfield and New Haven counties, about 55 percent of renters are considered burdened. Both counties are in the top ten in the nation for percentage of burdened renters. The national average is about 48 percent.
Additionally, over 11 million renters in the U.S. were considered “severely burdened” in 2015 because they paid at least half of their income for housing. The number of homeowners considered severely burdened was at its lowest since 2004, but there still were more than 7.5 million Americans in that category.
In their proportion of burdened homeowners, Fairfield County is behind only the New York City and Los Angeles metro areas. The Hartford metro area, which includes Hartford, Middlesex and Tolland counties; the New Haven metro area; and the Worcester, Mass., metro area, which includes Windham county, also are above the national average for burdened homeowners, which is 24 percent. About one out of every three homeowners in Fairfield and New Haven counties are burdened, according to the report.
Burdened renters and homeowners
Percentage of burdened renters and homeowners in CT, surrounding metro areas and the national average
AreaPercent of burdened rentersPercent of burdened homeowners
Fairfield County metro55%35%
New Haven metro55%31%
Hartford metro47%27%
Worcester metro46%27%
New York metro53%36%
Boston metro49%28%
National average48%24%
Rents in Fairfield County are among the highest in the nation, with median rents higher than those in the New York and Boston metro areas.
Pete Gioia, economist at the Connecticut Business and Industry Association, said Fairfield County’s high prices aren’t new, and Connecticut is relatively affordable compared to the larger surrounding cities. In Boston and New York City, housing prices are growing faster than they are in Connecticut. Affordability problems arise when houses in buyers’ desired price range aren’t available.
“Is the housing stock that’s available comparable to what purchasers are looking for? That’s where you get into some affordability issues,” Gioia said. “This is not just true of Connecticut. This is true of other areas. There’s a lot of buyers out there for reasonably priced housing. There’s fewer buyers out there for very high-end, expensive and large properties.”
While median income for renters in New York, Boston and Fairfield County are similar, the median rent in Fairfield County is about $100 higher per month than in Boston and New York, suggesting higher rents, not lower incomes, are behind the burdens on renters in Connecticut.
Fairfield and New Haven counties have some of the lowest percentages of 18- to 24-year-olds heading households. About 10 percent of 18- 24-year-olds are independent heads of households in those counties. The national average is closer to 20 percent.
Gioia said affordability probably keeps some younger millennials from moving out on their own in Connecticut, and many who do leave for other places. Gioia said students who leave the state for college are more likely to stay out of state. Larger metro areas also appeal more to younger people, he said.
“If you’re an unmarried 23-year-old, you want to be where the action is, and there’s a heck of a lot more action in New York City or downtown Boston than there is in Connecticut,” Gioia said, adding many young people come back to Connecticut later in life when they begin families.
However, Gioia said there is economic opportunity here. “If you’ve got the skills, you can make a pretty darn good income in Connecticut, even if you’re fairly young,” Gioia said.
The report found that nationally, higher rents may become a norm. The number of rental units costing less than $800 per month has decreased between 2005 and 2015. In the same decade, units with monthly rents over $2,000 increased by 1.5 million.

Wednesday, July 12, 2017

Be Open to Listening to Your Realtor

We all know that lots of people don't listen very well.  It's also true that sometimes others talk about things without knowing much about the subject.  And sometimes, you may know more about something than the person who is trying to educate you.  However, most of the time when you hire an expert, you do so because you are interested in what they have to say about their field of expertise.  Part of why you have engaged them is so that you can benefit from their knowledge, even if all you are doing is confirming your own hypotheses.

As Realtors, our job is to give people the best advice and information we have about how to sell or buy a property.  What we tell others comes from experience, from "inside" information from within our companies or our industry, and from the collective wisdom of those in our firms and contacts.  It may not always be correct, but it usually has some data points behind it, and it is gathered and disseminated with the best of intentions.  Often it is more up to date than what is available through public records, or even appraisal firms.

Therefore, it's always surprising to us that people who come to us for help then ignore advice, or even argue with us.  I've been working in real estate for a long time, and the following have all been said to me within the fairly recent past:
"I'm going to tell you what we should do, that I heard from a person next to me on a plane yesterday, but I don't have time to listen to your answer";
"You might learn something about your field from me";
"Do you have anything to say that is worth my listening to?  I'm busy doing something else right now." (This from a person who picked the time of the call).
"I hear you, but I'm depending upon the statue of St. Joseph that I buried in my backyard". (This house did sell.)
And the most common:  "This isn't what happens in Austin/Boston/Charlotte/Denver...." or "I've done this before, and you need to ask more and leave room to bargain" or "offer less, and leave room to bargain".

You get the idea. One of our key tasks is to listen closely to your wants and needs, so we aren't asking you to do anything we shouldn't also be doing ourselves. We don't claim that we are infallible or that we have all the answers, but it's usually worth listening to your Realtor, and being sure that you heard what he/she said, and not what you wanted to hear, before you decide that you know better.  We do have recent market data and statistics, lots of experience, and are clearly vested in the success of the transaction, since that's how we get paid.  The final decision is always yours, but it's best to make it with the most professional input at your disposal.

Wednesday, July 5, 2017

Current Absorption Rates

Explanation of absorption rate: The rate at which available homes are sold in a specific real estate market during a given time period. If you look at the number for Branford you can say “If market conditions do not change and if no new listings come on the market it will take 5.3 months for the current inventory to sell at the current pace of the market. A balanced market’s absorption rate is typically between 5 - 7 months.”

Wednesday, June 28, 2017

Conflicting News

When people ask us how the market is, it's very tempting just to say that it's great.  However, it's more complicated than that.  I usually respond with some variation of an answer that includes the problems of Connecticut, which cause our market to lag behind the rest of the country, the bifurcated distribution of listings into those that get multiple offers and those that don't even get shown, the lack of price appreciation in most parts of our region, and the beginnings of demand outstripping supply.  It's actually hard just to figure out whether we are in a buyer's market or a seller's market.

So, as with many things, it depends.  Yes, you could be in a state that has greater fiscal health, but we are not.  Given where we are, are conditions better than a few years ago?  Certainly.  Since very little has been built, and many properties have sold over the past few years, is supply lower?  Of course.  Does that increase the likelihood that there will be more demand for the choices currently on the market?  For sure.  Are mortgage rates helping?  Without a doubt. 

And on the other hand?  Connecticut is one of the few places where the recession has never entirely ended.  We haven't gained back all of the jobs we lost, we are losing population, and we have many properties that are still worth less than they were when they were purchased, particularly if they were purchased before the big decline in 2008 and the years following.  Does this mean that pricing is still an issue, since sellers feel that they "need" to get more than buyers are often willing to pay?  I think that question answers itself.  Realism is still in short supply in some areas, especially since the rise in prices has been spotty, with some towns and neighborhoods far outstripping others. 

My advice?  Consult a Realtor before making a judgment about your property, if you are a seller.  If you are a buyer, get qualified and get educated, and then buy while the prices still seem low to most of us.