Wednesday, February 3, 2016

New Haven is Finally Normal!

Every month, we post the absorption rates for our region, and compare them to last month, and last year.  What we don't do is compare them to everywhere else.  Around the country, most areas have inventories far too small for the demand they see.  A healthy inventory would be considered 3 to 6 months' supply.  We haven't been seeing those numbers in years, for the most part. 

If you check this week's posting, you will see that New Haven clocks in at a very respectable 4.4 months of supply, meaning that it would take 4.4 months to sell all of the current houses on the market at current sales levels.  That's pretty much dead center in the "healthy" category, and is promising for 2016 sales.  Of course, inventory levels are always lowest at the start of the year, and can go up if people start listing before others start buying, but, for now, let's just rejoice that we are again normal!

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 New Haven you can say “If market conditions do not change and if no new listings come on the market it will take 4.4 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.”

Thursday, January 21, 2016

Connecticut is Out of Sync with the US as a Whole

We have posted charts this week, showing the increase or decrease in sales from 2014 to 2015 at different price points, both in CT and across the country.  You can see that sales here are higher on the lower end of the price spectrum, while higher-priced homes have increased more in other parts of the country.  This means that we are still, relatively, a buyers' market, whereas lack of inventory, combined with greater price increases, have combined to give sellers the edge in many other places. 

What does this mean for buyers and sellers?  If you are a first-time homebuyer, or a buyer moving into our region, you can buy more for your money than you could before, and more than in places that used to be equivalent in price to Connecticut.  If you are trading up or down, it shouldn't matter; you will sell for less than you hoped, but will buy again at the same lower prices.  If you are selling only, you may find that you cannot achieve the net price you wished, and that your asking price may have to be lower, or that you need to lower it now, if it has been on the market for some time. 

Wednesday, January 13, 2016

Expecting an Early Start to the Year

The traditional wisdom in real estate has people talking about the "spring market".  Prices are higher, attendance at open houses goes up, and contracts proliferate.  Sometimes the spring market even becomes the summer market, especially when the winter is lengthy and snowy, as happened last year.

There is another pattern in south central Connecticut, however, that happens for a couple of reasons. One is that we have an unusually high number of colleges and universities, which operate on a July to June calendar (as do most nonprofits, which also exist in large quantities in our region).  That means that offers of employment go out early in the calendar year, with July 1st starting dates. 

Also influencing our timing are the demographics we see.  Our average age in the State tilts high, and our birth rate tilts low (obviously, those two things are related).  That means that relatively fewer households have school-age children, causing their moves to take place according to other factors.  Although we do see many sales occurring in the spring, with closings taking place in the summer, we see lots of people buying at other times of the year.  People buying toward the close of the year are often investors, who are looking at tax considerations.  People buying early are coming into academic jobs or hospital positions.  This is especially true in the city of New Haven.

What that translates to is a paucity of listings in the winter, when the job offers starting coming in.  We are scrounging for homes to show in January and February, especially when we don't have snow on the ground.  We are expecting that to be true this year in spades, since we had activity straight through the holiday season, as well as increased hits to our website. 

We hope that sellers and potential sellers take this information and rush to get their homes ready to show as soon as possible.  While there may be more buyers in the spring, there are very motivated ones now, and the competition is less.  Try it and see for yourself!