Mixed Signals

The latest issue of the Commercial Record illustrates our current problem for sellers and buyers.  If you look at New Haven county for June, the most recent month available, compared to the same month last year, sales are down by 12% and prices for the whole county are up by almost 6%.  If you look just at the shoreline towns and add Woodbridge, to try to capture the higher end of the market, sales are slightly up and prices are down.  Go figure. 

I guess the lesson as a whole is that we can't pay too much attention to what we read in the national press.  Connecticut is following its own, slower, path to recovery.  Our listors at the high end of the market are beginning to accept that there seems to be a ceiling on prices for luxury homes, and that no one can say what a given home is "worth".  We can predict that it won't sell for what the seller thinks it should, given what money is in the house and what the condition is, but we can't find examples that will pinpoint the exact price.  We can't even promise that it will sell at a lower price, nor can we swear that we're not "making a market" by lowering prices, causing low prices to slip lower.  What can we say?  We can tell buyers that it's a great time to buy direct waterfront, or properties over a million dollars.

In other submarkets, the picture is murkier.  The numbers of months of supply in houses has declined, and is now in the range of a balanced market.  That should mean that neither seller or buyer has an advantage.  But, depending upon where you are, and the type of house you have, you could find a bidding war or few showings, with maybe a lowball offer.  However, the only way to test the market is to put the property on at a "fair" price and see. 

There is a bump every fall, when buyers try to close and move before the end of the year, and, this season, it may tell the final tale of 2013.  Let's see what happens.  We do know this--mortgage rates, over the long run, matter much more than a few thousand dollars here or there in the sales price.  So buyers should definitely act, because interest rates have already gone up about 15% from their lowest point, and will likely rise further after the elections.  Time is fleeting--carpe diem!

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!