Pearce RE Selected to Join CT’s Tribal Nations’ Push to Save Jobs

At a press conference held Thursday afternoon at the Connecticut Capitol, the Mashantucket Pequots and the Mohegans, Connecticut’s two sovereign tribal nations, joined forces to save jobs in the State by creating a new gaming facility to be built north of Hartford. I am delighted to announce that Pearce Real Estate has been selected by MM4CT Venture, their joint enterprise, to administer the Request for Proposals from towns and municipalities that are interested in being home to the new facility. We are honored to be part of their important efforts to save and grow jobs here, and for citing Pearce as a woman-owned business with outstanding credentials, superb knowledge and experience in the Connecticut landscape, and a stellar reputation.  Importantly, they appreciate that we are a Connecticut company, that we all live and spend our money here, and have a vested interest in the economic health of our State.   

Thanks to Chris Nolan, Carl Russell, Virginia Vinci and Lyndsay Cuomo for working with me to respond to MM4CT’s request for a proposal in such a quick, positive and professional way. 

Additional details about timing and the process moving forward will be released in the coming weeks.

Barbara

 

Why National Forecasts Don't Always Help Local Sellers and Buyers

It can be very difficult to tell what the market for your own property or potential property might be, if you are reading national news about real estate and the economy.  When you turn to the local news, it can be jarring, to say the least.  Even within a market area, one part or one town can be outperforming or underperforming the others.  What can I tell you?  It confuses us also.

For the past 25 years, the Connecticut market has not matched the national market more often than not.  However, there are two Connecticut markets--all of Connecticut, which includes Fairfield County, which is heavily influenced by metro NYC; and the "real" Connecticut, which is the rest of the state.  Of the top 100 metro markets in the country, only 4 have declined in prices in the past 12 months, and two are here:  Hartford and New Haven.  You may read statistics that don't mirror what you are seeing only in your area, because Fairfield prices did not decline, and this year's Wall Street performance meant that serious money was available to throw at real estate in that region.  The state as a whole was 50th out of 50 states and the District of Columbia in price appreciation (we beat Mississippi) for the prior year, but the entire state was positive for price growth, albeit slightly.

Although mortgage rates, which have a big influence on prices, are largely national, energy prices vary, because of tax rates, and tax rates vary a lot. In addition, we have tax policies here (especially our estate tax and our highly inclusive income tax) which put us at a disadvantage to other states, when people are choosing.  Property taxes directly affect real estate prices, and we are more dependent upon them than are some other states.

 Another factor is our legal system, requiring court involvement in foreclosures.  Connecticut is not alone in being like this, but the states that have lengthy legal foreclosure processes are lagging behind in price appreciation, because those properties have not yet all turned over, and that is holding prices down.  There can be real differences between average prices counting foreclosed properties and short sales, and those which only measure MLS sales, for instance.

Is there an upside, you might ask?  In addition to the recent news that Greater New Haven will be the first part of the state to regain all the jobs lost in the recessions (another factor in the state's lagging performance), there is the obvious:  Since we  haven't seen the rise in prices yet, or the end of short sales and foreclosures, the big bump up that is likely to come is still ahead of us.  That means that, if you are buying now, you will be buying somewhere else at likely a higher price point than you will be buying in Connecticut.  Unless you believe that there will be permanent stagnation in prices here, and we know that all markets in the past have been cyclical, the next part of our cycle is statistically likely to outperform the areas that have already recovered fully.

You are not alone if all of this seems confusing, or complicated. The advice for sellers is to be cautious, and not be greedy about asking price. And, at the end of the day, if you live here, and you like it here, lifestyle would suggest that you should buy.  And soon, before rates rise.

Hartford's Buyers' Market

Hartford is currently listed number 9 in the list of the best markets in the country for buyers.  To put that in perspective, Phoenix is listed as one of the hottest sellers' markets.  So what do they really mean?

The people who compile these lists rate as a buyers' market anywhere where prices are not rising, where homes sell below the asking price, and where the median home in on the market longer before selling.  Now think about what that could mean.  In Phoenix, where everyone knows that there are tons of short sales and there was a huge oversupply of homes built, with declining values and high rates of foreclosure, sellers are very realistic.  They may even expect to lose money.  Also, many people have seasonal homes there, in which they are less emotionally invested, and may just be willing to dump them to be done with things.  They may rate outside advice more strongly, since they may not be Phoenix natives.  And they know that they are competing with banks and corporations as non-emotional sellers.

Now compare that to the Hartford area.  Most homes are primary homes, with owners living in them and feeling strongly about their value.  There was not a great deal of building down in the prior decade, nor were there daily articles in national news media about the poor market and the high foreclosure rate.  Most foreclosures, since Connecticut is a law state (meaning that you must go through the legal system to foreclose), are still in the works.  Finally, prices went up in the past decade and a half, but not like they did in the Sunbelt, where jobs were growing and the economy was expanding.

Then, add in the factor that every home is different, so its value is subjective, and it is not a commodity (although it may have gotten close in the Southwest).  It's not like buying a Honda here versus in Arizona; you are not comparing apples to apples.

However, numbers don't lie.  Sellers here have not been as willing to drop prices or make concessions, so their homes have not sold.  Buyers have chosen to rent and wait for values to bottom out.  Also, they have probably been less inclined to put their homes on the market for what they are truly worth, since they are still hoping to get out whole, and, often, to buy another home.

When will things change?  Either the market will get much better, and, like a rising tide, raise all boats, or prices will come down until those homes that have rusty For Sale signs out front are all gone.  But it does seem like a stretch to say that sellers are better off in Phoenix than in Hartford, overall.  Like much of life, it's just not black and white.

Is Madison, Wisconsin Leading the Way for Us?

As most of you know by now, I belong to a group of large independent real estate companies around the country. Some are in big cities, but most are in smaller cities (although bigger than New Haven or Hartford). For some reason, Madison, Wisconsin seems to be the most like our region. Dave Stark, the owner of Stark Real Estate there, and I have discussed this, and it's likely to have a lot to do with the employment base. They have both the state capitol in Madison, and the University of Wisconsin, and those are the two biggest employers. If you didn't know that before, you weren't watching the state workers picketing the Madison capitol!

Having a lot of non-profit and government workers in a region usually makes the employment situation steadier, as well as the use of commercial space. Universities and governmental bodies think in terms of decades, not months. Also, you don't often have the boom times that you would find in Silicon Valley, say, or Wall Street, or even a smaller place where a large manufacturer might open or expand a facility.

Therefore, I thought it was very good news last week when I received Stark's quarterly mailing. While they had the same horrible first quarter that seemed to prevail everywhere, the recent signs have been encouraging. They see lots of pending activity, and increased interest in real estate. I hope it gets here as fast as a big storm seems to do!