For Real Estate in Greater New Haven, March is the New June

 For the past couple of years at least, March has been the biggest sales month for our New Haven office.  Yale University, Yale New Haven Health System, and other educational institutions have the greatest impact on this result.  Academic and medical positions usually begin on July 1st, and the offers for those jobs typically start coming at the beginning of the calendar year.

Every year, we say that we need to try to get listings on the  market sooner.  And, every year, we end up with buyers who don't have enough property to view when they come to search.  Some of that is due to weather, which can cause deferral of repairs and improvements that many sellers make before putting a home on the market.  Some of it is the just the normal slippage of chores that don't get done when they should, or jobs that take longer than expected.

A big part, however, is that people think of May as the time to list, and June and July as the time for closings.  We need to be clear that the sales season is now year round, and that early spring is the best opportunity for a seller to list, in our opinion.  In the way that the first offer is usually the best offer, an early buyer is often the most motivated.  Spring brings lookers, and nice Sundays are great for open houses, but those who need to be settled by July want to get the move done early.

One of the best things about that for sellers is that there will be more product to choose from when they have sold their current homes, since many people still wait to list, for all the reasons stated.  This year is shaping up to be a great year for real estate, but that doesn't always mean that all buyers and sellers will be happy.  Time is of the essence, and product is needed to sell before buyers can buy. 

Let's get this show on the road!  List now, and reap the rewards.

Statistics Can Go Either Way

We all have to be careful not to take statistics too seriously, because we can find ones that support more than one point of view about the market.  In fact, we can support opposing points of view with available data.  One side argues that the residential market is pretty good—low supply, low mortgage rates, eager millennials, influx from NY, and improving job reports.  The other shows a bleaker picture—prices still 10% below 2006, job growth in lower level jobs, outmigration to other states among the wealthier boomers, a lagging economy over 20 years, and high State debt.  What’s a person to think?

 

The answer is, as it always seems to be, it depends.  If you are a seller, this is a good time to sell, given low supply, new household formation, low interest rates, and a mild winter.  If you are a buyer, this is a good time to buy, because of those same low interest rates, the improving position of the State, high quality of life, and room for appreciation, with good prices to be had.  When you take those two things together, you see a fairly balanced market, with both buyers and sellers finding points in their favor, and points against.  At the end of the day, the purchase of a home is about your life, and not just your money. Lower interest rates, over time, make much more difference than the price, within some range. The sale of a home involves being ready for next steps, and wanting to reinvest in smaller houses, perhaps in different places.  Those factors very often outweigh strictly economic concerns.  Like any lawyer, I could make an argument for either side.  Instead, I’ll content myself with saying that cognitive dissonance means that, whatever you do, you can convince yourself that you did the right thing.  And there’s evidence to support that idea, no matter what you do this year.  So follow your instincts, and do what’s best for you and your family.

Where are the Luxury Buyers?

I thought I should write a little bit more about the information on market inventories that I described last time. As I stated, there is a direct correlation between the price and the amount of months of inventory on the market. So, for properties under $200,000, there is a 1.7 month supply. For each increasing value bracket, that supply goes to between 2 and 3 months, between 3 and 4 months, between 4 and 5 months, and then goes to over a year above $700,000. Only 2.7% of the sales now are above $700,000, and there are more homes on the market in that price range than in either of the two price ranges below that.

This surprises me in some ways. While I know that consumers are cautious, and I realize that the governmental incentives are aimed at a lower price point, one would still think that the combination of low interest rates and a skittish stock market would drive people to spend their savings on real estate. In addition, there are still those who could be downsizing and yet be spending above that amount for a property. Since investing one's assets is so problematic these days, real estate stands out as a tangible asset that is currently selling at bargain prices.

We bought our home at what turned out to be the bottom of the last market cycle, and it has turned out to be our best investment. While you cannot pick the bottom of the cycle without luck, this clearly has to be a time that will turn out to be good, considering the interest rates and prices. Why not take advantage of that, and look back years later with great satisfaction on your best investment?