Up or Down?

Don Klepper-Smith, our local economist, recently published a press release, quoting the Register, which was quoting the Commercial Record (yes, I know, therein most likely lies the problem).  Anyway, by the time Don repeated this chain of statistics, he reported that the health of the economy in Greater New Haven had gone drastically south in the month of March (of course, most people here wanted to go south last month, but I'm talking numbers now).  He picked out the trends in consumer confidence and job loss as being particularly problematic, and causing our region to buck the national positive trend line.  He went on to say that housing was the single bright spot in the figures, and that the median price for single-family homes had risen by $45,000 last month.  That seemed so improbable to me that I called the Commercial Record to check.

According to them, February's numbers showed a huge increase in the median sales price, combined with a steep decline in the number of sales, so the particular mix of the lesser number of sales seems to have affected the price for that month.  For the year so far, total sales are down, unlike most parts of the country.  When I had them check March, the median sales price had evened out, and was almost the same as it had been in 2012, but the number of sales was again way down. When I asked the reporter what she made of these numbers, she said that most places in the country are now reporting that sales are not increasing as rapidly as they had been, nor are prices rising as rapidly, but she said that Connecticut clearly is lagging behind other states.  She attributed that to state budget woes.

So, to recap this confusing report:  The recovery appears to be sputtering in our region, although it is not as robust in other places as it has been for the past few months.  Here, we are seeing prices that are flat to slightly down, which puts us behind everywhere else, with 2013 numbers that are far below 2012's.  I'm going with weather as the cause of that, although state problems and consumer confidence are quite possible alternative explanations.  Let's hope it gets better soon, and I'm betting that the weather improves before the State solves its fiscal issues!

Sales Around the Country This Spring

It's always interesting for me to visit with my friends from other large independent companies around the country, especially when the market is changing rapidly.  I just got back last night from Charlotte, and the mood from other places is almost giddy.  The feeling nationally is that market activity will be back within 10% of normal levels by the end of this year.  That's a big improvement from the projections we heard only last fall, when most experts thought that historical norms of housing turnover would not return before 2015.

Now the commonly heard complaint is lack of inventory.  There simply aren't enough properties for sale to meet the demand. The average number of months of inventory seems to be about three.  Well-priced, well-maintained homes in many areas get multiple offers--sometimes dozens--within a few days or weeks of being listed.  Once they go under contract, the problem that arises is that appraisals have been lagging, as they always do, so there are issues with mortgages.  In some cases, sellers and their agents are going back to the highest bidder and telling them that they need to release all the contingencies, including mortgage, or they will proceed to the next offer. New construction is hot everywhere.

Here in Connecticut, we're recovering slowly.  (Maybe that's why they call us the Land of Steady Habits?)  We have just over eight months of inventory overall in our county, with some towns much higher than that.  Guilford, for example, has 17 months' supply.  Our supply of million dollar homes will last several years.  So, for us, the report from other places tells us what the future will be like.  And it will be great.  However, if you are a buyer, my advice is to buy right now!