Thursday, February 26, 2015

Renting vs. Buying

By now, many people know that New Haven has the lowest apartment vacancy rate in the country.  What people may not realize is that, consequently, rents have gone up faster than they have in most other places.  So, rents in our area have risen over 50% in the past ten years, while home prices are still 20% lower than they were in 2007. 


When experts talk about the benefits of homeownership, most people assume that tax benefits, forced savings, appreciation, etc. that are being discussed.  What is now also true is that renting can now be so costly that the price of an apartment has become a deterrent to saving for home purchase. In fact, it can almost seem as though there are two divergent paths, where renters must stay renting, and purchasers are better off if they keep buying. 


We shouldn't give out the same old advice, without looking at the updated case for buying now, if you can.  There was always an argument that went something like "you  have to get on the merry-go-round, so that you can take advantage of the ride up in prices".  It may now go more like this:  "You need to get on the ride before the cost of sitting on the sidelines becomes prohibitive, preventing you from ever being able to buy a ticket for the ride."


All renters should carefully do the math, and make the appropriate decision for their circumstances, but that decision may not be the obvious one.

Monday, February 9, 2015

What the Data Tells Us about Real Estate Sales

We've been experiencing higher than normal volume on our website lately.  I know that's a message that you are used to hearing when you call in for customer service almost anywhere, but here it means something different.  It means that we can tell, from the analytics provided to us by our web provider and our Search Engine Management provider, that the usual uptick in site visits and searches began right after the holidays this year.  Usually we would see that rise begin in February or so, and that would translate into more traffic at open houses and more showings by the end of March. 


This year, all indications are that the spring market has already started.  And this despite all the snow!  While you might think (as I did) that bad weather and dark, cold nights would have people rushing to their computers to search for property, we can tell that the visits are coming during the day, and during the week, more than on the bitterly cold and messy weekends we've been having.  That would suggest that the traffic is normal, but early, as opposed to caused by boredom.


Our agents are reporting that showings are surprisingly robust for this time of year, and that open houses were strong, even on the traditionally slow Super Bowl Sunday (I've never understood why it takes all day, if you're not hosting a party, to get ready to watch a football game, but that's another blog topic...).  Inventory is down, and buyers are clearly eager to see new listings.  Many of the listings that have been on the market for a long time have been judged by buyers to be overpriced, or compromised in some way, so new offerings are highly prized.  Sellers take note!



Tuesday, February 3, 2015

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 New Haven you can say “If market conditions do not change and if no new listings come on the market it will take 9.3 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.”