Friday, September 8, 2017

Silver Lining

Often it's hard to be one of the only places in the country where appreciation is lagging, and more people move out of, rather than into, our state.  However, there is one big advantage to having the rest of the country on a different time schedule for the real estate cycle:  A rising tide lifts all boats.

For several years following the downturn ten years ago, people moving for jobs had trouble buying in the new locations, because they couldn't sell their homes in the places they were leaving.  Often they ended up renting when they moved here, in part for that reason, and in part to make sure that their jobs here worked out.  In a way, the whole national market got stuck, since people were renting out their old homes, and therefore renting their new ones by necessity.  In fact, our relocation department found that the old numbers just switched; instead of 80% of transferees buying, and 20% renting, we went to 80% renting and 20% buying.  That was obviously not good for absorption in our market area of Greater New Haven.

Now, however, transferees coming in are mostly coming from places with markets that are fully recovered--in some cases, declines from the post-recession peak have already occurred.  Those     people are coming with equity to put into homes here, and a positive attitude acquired from their latest real estate transaction.  While it doesn't mean that they will overpay here, and that values are still well below their peaks in many towns and neighborhoods, it does mean that there are new buyers out there.  And that's good news for all of us!

Thursday, September 7, 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 Madison you can say “If market conditions do not change and if no new listings come on the market it will take 6.6 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.”


Monday, August 28, 2017

120 Days Left in 2017

If you leave out Thanksgiving and Christmas, there are 120 days between September 1st and the end of the year.  But rest assured, this is not an ad for shopping days before Christmas!  It is, however, a wake up call to action, for people who plan to move before 2018 comes along, or for people who want to move when the timing is best.

Every year, I remind agents and clients that the best time to buy a house is between Halloween and Thanksgiving.  That's when the deals are, because sellers want to close before winter, and before another tax year begins.  But what does that say about the timing?

The average residential transaction lasts, give or take, 120 days from start to finish.  Therefore, if you are planning to buy this year, you need to start looking this week.  It takes about 16 or 18 weeks to train for a marathon, so it makes sense that it would take as long to buy and move.  Luckily, mortgage rates are almost always at their yearly low around Election Day, so that works out perfectly, if you find a home to buy around that time.

For sellers, this is a reminder that New Haven is a university town.  We still do things by the school year calendar, and that includes real estate.  Late August sees a big increase in activity and traffic. If you've been planning to sell next spring, you might think again--this can be a really good time, since the end of the year provides a nice ending point for buyers to aim for, and that tends to make things move more quickly. That tends to cut down on the random lookers, too.  Mortgages also tend to have a way of going through the system faster when the holidays are coming.

So are you listening?  This is your moment.  Fall is here, and it's time to act!

Thursday, August 10, 2017

What Makes a Good Real Estate Agent Great?

I've spent several hours over the past few days talking to past Pearce clients about their real estate buying or selling experiences.  It was so useful, and so gratifying, that I've decided that I need to do it on a regular basis!  I asked each of them to tell me what qualities s/he found most important in the agent used in a particular transaction, and which services offered were most appreciated.  And here are the results:

1.  Overwhelmingly, the number one factor that made agents great was communication.  Clients were happiest when agents kept in touch regularly, yet this simple fact was not taken for granted, as many agents don't do that.  People I contacted told me over and over again that it was really important to their selling or buying process that they be kept informed, and that their agents were excellent at living up to this need.  It was mentioned so often that it should be the first thing buyers and sellers ask about in an interview.  However, the fact that you ask about it and someone says that they will communicate often, does not guarantee that s/he will.  Tip for clients:  Make your expectations clear upfront.  Tip for agents:  Don't prejudge what a client will want to hear.  Tell him/her everything.

2.  The second point that arose again and again was that great agents control the process.  They serve as backups for clients, who may be buying or selling from far away, who may never have bought or sold a property before, and who almost always have a lot going in, in addition to the transaction in question.  Many people mentioned that their agents kept track of dates and deadlines, always reminding them not to drop the ball or let an important clause lapse.  Great agents anticipate the next need, and regularly remind clients to stay ahead of the curve.

3.  Great agents are knowledgeable about local customs.  They can explain mill rates and closing practices.  They can talk about differences from town to town.  They serve as sources for questions and research help.

4.  It was surprising how many people mentioned that their agents went above and beyond.  We don't always know that clients recognize what is part of the job, and what qualifies as doing "extra".  I heard of an agent getting the mail, checking the property often, taking care of repairs that needed to be done before the closing, and other tasks big and small.  It was gratifying to know that clients do appreciate that such service is more than the basic representation.

5.  Flexibility was a key trait mentioned.  Buying and selling are activities often done outside of the regular working day, and clients were impressed that agents rolled with the punches.  Also, great agents accepted that needs ebb and flow, and that sometimes searches would get back burnered, while at other times people were ready to move quickly.

What did they not tell me?  I was a little surprised that they didn't mention help with pricing or offers, or advice on choosing among properties.  That doesn't necessarily mean that clients don't look to agents for actual real estate advice, but it does seem to indicate that all the points above are what made the difference.  That suggests that there could be less emphasis on how long an agent has been in business, and more on service.  One seller used a questionnaire to choose an agent, and got pushback from those who didn't want to answer questions formally.  From everything I heard, great agents have no reason not to make promises upfront, because they really deliver down the line!  In fact, I should close by quoting one client:  "She really became a friend".  That's right, everybody.  While you are buying or selling, you may talk to your agent more than anyone else in your life, for that period of time.  Choose someone you like!

Tuesday, August 1, 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 Hamden you can say “If market conditions do not change and if no new listings come on the market it will take 5.4 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.”