Tuesday, July 10, 2018

Use the "Off" Season

Every summer, the real estate market slows down for a period of time, but it's a different few weeks every year.  Some years, the lull is after commencements, sometimes it hits with the Fourth of July, and, if not, there's usually a slowdown in August.  If you are a buyer, and willing to search for property in the heat of summer, you can do well.

Many listings sell in the spring and close in June or July.  What's left may not even get shown very often, since vacation schedules and outdoor plans stop people from looking , and even thinking, about real estate.  That doesn't change a seller's desire to sell, however, and he/she may be more flexible as a result.  Even though there is almost always an autumn pick-up in the market, that can start after Labor Day, or after Election Day, so sellers get impatient waiting.

That's where a smart buyer comes in.  Be prepared to be accommodating on a closing date, especially with a summer-oriented property. Be ready to have vacancies, if you are looking at investment properties with school-year leases. New choices are still appearing on the hot sheets and the internet.   When the spring is late in coming, and this season it certainly was, there are often delays in getting things onto the market, and so good houses and buildings can still be available well into the dog days of summer.  In either case, they are still for sale now.

Take a beach day, and convert it into a real estate tour instead.  You will be glad that you did when fall rolls around, and you have closed already!

Monday, July 2, 2018

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 North Branford you can say “If market conditions do not change and if no new listings come on the market it will take 4.5 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, June 25, 2018

What’s Causing the Current Housing Market Uptick?

It seemed for some years that Connecticut, alone among almost all the states, would never see the benefits of a better residential real estate market.  While recovery is spotty, both in terms of price and number of units, there has definitely been a feeling of optimism all year.  Despite a bitter winter, sales began early and continued strong.  Despite talk of fiscal woes, and estate taxes especially, in Connecticut, people were looking.  And, despite the recent Federal tax act, with its threat of limiting property tax deductions for blue states, they are buying.

The strongest correlation between the housing market and the economy has always been, for us, the consumer confidence index.  When people feel bullish about the future, the real estate sector gets stronger.  Consumer confidence has jumped this year, and we can tell.  Even though many uncertainties exist for taxpayers, employers and employees, and all Americans, homeowners and would-be homeowners are apparently responding to a few clear points:  We can see upward pressure on wages, in part because unemployment is low; interest rates, although there has been some movement, remain very favorable, and mortgage availability has eased in some areas; and, perhaps most importantly, the stock market has created a great deal of new wealth, and many stockholders think that they should cash out, at least partially, while their gains are still high, and that money has to go somewhere.  Real estate, with its versatility of use (investment, vacation, or primary residence), its tangibility, its prominent place in the defining of the American dream, and its centrality in life passages and aspirations, fits the that bill for many.

Don’t think that real estate professionals are crying wolf when we urge fiscal prudence in State and local spending, or when we call for repeal of onerous provisions in Connecticut’s estate tax, because the tide could turn again, if consumers once again switch to pessimism about the future.  For now, though, it appears that buyers are planning to “seize the day” and diversify into property.  And that’s good news for sellers, and all of us.

Thursday, June 7, 2018

We're Turning 60!

This week is Pearce Real Estate's 60th anniversary, and we're celebrating!  My father founded the company in 1958, after a 20-plus year career at the A.C. Gilbert toy company (now turned into artists' studios on Peck Street in New Haven).  Perhaps selling erector sets made him long to sell real buildings, and, early in his career, he actually sold the Gilbert building, after the company was downsized and sold.

Our original location, on State Street in North Haven, has been doubled twice, and we are still headquartered in that building today.  Over the years, we spread our territory, first to the Shoreline, and then to other commercial locations in Greater Hartford and in Milford, but we always have maintained our core principles of local independent real estate expertise and community service.  All eight offices today are filled with dedicated professionals who pride themselves on knowledge and integrity.

We'd like to think that we have indeed made Connecticut better over our 60 years in business.  In addition to providing thousands of hours of human service, and millions of dollars, to all kinds of non-profit organizations around the State, we have changed its landscape.  We have developed housing around the Greater New Haven region for most of that period.  With Don Lippincott, my father developed first an industrial park at Exit 10, and then what became in effect a regional mall at Exit 9.  The latter involved building a road and bridge, which is now called the Herbert H. Pearce and Donald B. Lippincott Commemorative Bridge, and leads to Home Depot, Target, and many other destinations.

His capstone project was New Haven's first mixed-use development, known as Whitney Grove Square.  It has shopping, office, residential, and parking at one location, with a bigger garage across the street. It was instrumental in moving people up from the Green to Whitney Avenue and Grove Street.  Buyers lined up through the night to buy the condos when they went on sale in 1986.  Many residents of the region now live in the heart of downtown New Haven, but it was unusual at the time.

We're proud of history, and of the perseverance that it has taken to survive and thrive for all of those 60 years.  We're prouder still of our associates, current and retired, who allowed us to do so.  And we are grateful most of all to the thousands of clients who have entrusted us with their sales, purchases, and rentals, for decades, and often for generations of the same families and corporations.  We look forward to the future, and know that it will be bright.

Monday, June 4, 2018

Bidding in a Market with Tight Inventory

Currently, the Greater New Haven market is experiencing a shortage of inventory in some price ranges.  Although most of the country has been like this for a while, it has been a long time since it has occurred in Connecticut.  Many local buyers are not accustomed to needing to, or may not even believe that they need to, compete with other offers.  Some people that real estate agents mislead potential buyers about other buyers, in order to encourage interested parties to act quickly, or bid higher.  We are amazed now at how often a house that has been on the market for months, without any interest, suddenly may have two or even three parties competing to buy it.  Once a certain point in the spring has been reached, people feel that they have seen most of what might be coming on, so that they no longer feel that they should wait. Of course, homes that are well-priced and desirable attract interest, and usually these days multiple offers, almost right away.

So my advice to buyers is simple, and fairly obvious.  First, make a list of what you require in a house.  Keep a running preference order for what you’ve already seen, with your first three choices clear.  If those choices don’t change every time you go out, it’s probably time to stop looking. Be honest with yourself, and your agent, about your limits.  It’s amazing how often people tell us their upper price range, and then exceed it. Then, make the cleanest offer you can, with the fewest contingencies and for the shortest amount of time.  Assume that there is other interest in the property,  and follow this important rule:  Bid the highest amount that you would be sorry to hear that someone else paid.  If your reaction to a later record of the sales price is that you couldn’t, or wouldn’t, have matched it, then you did the right thing.  If your immediate thought (never mind what you told your agent about the highest you would go) is that you would have paid that price, then you should have bid more.