We all know that lots of people don't listen very well. It's also true that sometimes others talk about things without knowing much about the subject. And sometimes, you may know more about something than the person who is trying to educate you. However, most of the time when you hire an expert, you do so because you are interested in what they have to say about their field of expertise. Part of why you have engaged them is so that you can benefit from their knowledge, even if all you are doing is confirming your own hypotheses.
As Realtors, our job is to give people the best advice and information we have about how to sell or buy a property. What we tell others comes from experience, from "inside" information from within our companies or our industry, and from the collective wisdom of those in our firms and contacts. It may not always be correct, but it usually has some data points behind it, and it is gathered and disseminated with the best of intentions. Often it is more up to date than what is available through public records, or even appraisal firms.
Therefore, it's always surprising to us that people who come to us for help then ignore advice, or even argue with us. I've been working in real estate for a long time, and the following have all been said to me within the fairly recent past:
"I'm going to tell you what we should do, that I heard from a person next to me on a plane yesterday, but I don't have time to listen to your answer";
"You might learn something about your field from me";
"Do you have anything to say that is worth my listening to? I'm busy doing something else right now." (This from a person who picked the time of the call).
"I hear you, but I'm depending upon the statue of St. Joseph that I buried in my backyard". (This house did sell.)
And the most common: "This isn't what happens in Austin/Boston/Charlotte/Denver...." or "I've done this before, and you need to ask more and leave room to bargain" or "offer less, and leave room to bargain".
You get the idea. One of our key tasks is to listen closely to your wants and needs, so we aren't asking you to do anything we shouldn't also be doing ourselves. We don't claim that we are infallible or that we have all the answers, but it's usually worth listening to your Realtor, and being sure that you heard what he/she said, and not what you wanted to hear, before you decide that you know better. We do have recent market data and statistics, lots of experience, and are clearly vested in the success of the transaction, since that's how we get paid. The final decision is always yours, but it's best to make it with the most professional input at your disposal.
Showing posts with label market statistics. Show all posts
Showing posts with label market statistics. Show all posts
Wednesday, July 12, 2017
Thursday, April 27, 2017
Signs of a Changing Market
Finally, finally, Connecticut is beginning to see the indicators of at least a balanced real estate market! This comes so long after other places in the country that some of them have already passed their peaks, and have stalled or declined (e.g., San Francisco). We are most likely entering a mixed market, as we have some positive signs and some negative signs.
The "seller's market" side of the equation is showing, for the first time, absorption rates just under 6 months for the region as a whole. Healthy markets have between 3 and 6 months' supply. Our region varies, with some towns higher, and some around the 3-month mark, but the overall picture shows that demand and supply are in reasonable synchronicity. If the time gets too long (Denver at 48 hours!), buyers can't find homes and prices start to spike. If the supply increases to over a year (where we still are in the highest price ranges), sellers can't find buyers for their homes.
Lower supply leads to higher prices, and then to multiple offers, which we are seeing in some neighborhoods and price ranges. While it's not uncommon to have some variation, we do have a very bifurcated market, since we have slow price ranges and overheated ones. In other words, either your home is going to sell right away, or maybe not at all, at least at its current price.
Multiple offers also lead to the problem of sales not "appraising out", meaning that lenders cannot support in some cases the prices buyers are agreeing to pay. This issue, stemming from the fact that appraisers can't talk to the brokers, and must use recent sales within a very tight radius of the given property, so that their valuations tend to lag market forces, usually only occurs as prices start to rise. What's odd about our current situation is that we still, on a statewide basis, have declining prices overall, for the most recent periods reported. That indicates a very quickly changing scenario.
On the other hand, we are still seeing sales falling apart over inspection issues, prices being renegotiated after the initial contract, and buyers looking at many, many homes over a long period of time, all signs of a typical "buyer's market". So what's the consensus? We'll know more when the spring market wraps up, but that may not be at the traditional Fourth of July time. It looks as though we'll see surging sales through the summer, pointing to an improving forecast for the year. We certainly hope so!
The "seller's market" side of the equation is showing, for the first time, absorption rates just under 6 months for the region as a whole. Healthy markets have between 3 and 6 months' supply. Our region varies, with some towns higher, and some around the 3-month mark, but the overall picture shows that demand and supply are in reasonable synchronicity. If the time gets too long (Denver at 48 hours!), buyers can't find homes and prices start to spike. If the supply increases to over a year (where we still are in the highest price ranges), sellers can't find buyers for their homes.
Lower supply leads to higher prices, and then to multiple offers, which we are seeing in some neighborhoods and price ranges. While it's not uncommon to have some variation, we do have a very bifurcated market, since we have slow price ranges and overheated ones. In other words, either your home is going to sell right away, or maybe not at all, at least at its current price.
Multiple offers also lead to the problem of sales not "appraising out", meaning that lenders cannot support in some cases the prices buyers are agreeing to pay. This issue, stemming from the fact that appraisers can't talk to the brokers, and must use recent sales within a very tight radius of the given property, so that their valuations tend to lag market forces, usually only occurs as prices start to rise. What's odd about our current situation is that we still, on a statewide basis, have declining prices overall, for the most recent periods reported. That indicates a very quickly changing scenario.
On the other hand, we are still seeing sales falling apart over inspection issues, prices being renegotiated after the initial contract, and buyers looking at many, many homes over a long period of time, all signs of a typical "buyer's market". So what's the consensus? We'll know more when the spring market wraps up, but that may not be at the traditional Fourth of July time. It looks as though we'll see surging sales through the summer, pointing to an improving forecast for the year. We certainly hope so!
Thursday, December 8, 2016
Dynamic Pricing
One of the tools we acquired when we all took Ninja Training was the ability to help sellers by showing them "dynamic pricing", which graphs sales and listings in a town or neighborhood. It shows, in some cases, a clear advantage for one season over another. It also allows agents to help owners price correctly, by judging the market as it moves, and putting new listings on at competitive and compelling prices.
This information can be helpful to buyers, too, as there are times when offers will not have much competition, and prices may be lower. Whether you are a buyer or a seller, we know that the process for deciding to purchase or sell is longer than the lead times for most other consumer transactions. Our website visits, in fact, peak in the winter months, when people begin to look at possibilities and market trends.
Therefore, it can make a lot of sense to bring in a professional advisor earlier in the process--in fact, it's one of the data points associated with better real estate transaction results. So don't feel that you have to wait until you are ready to look or list--we are here year round, and we prefer to gather information over time. Sellers often need to do work, and consultation ahead of time lets them show their homes to best advantage. Buyers often need to be qualified, and can come out of that process with a to do list for improving credit scores, or avoiding drops.
So don't let the winter season pass you by! As I've written before, our selling season starts earlier in many parts of our market than most realize, and the early bird can catch those sales. If you are a buyer, you shouldn't even wait that long--rates have already begun to rise. Should you have a lull in this busy season, give us a call. If not, then make a note to do so as soon in the New Year as you get the chance. We're ready to assist you.
This information can be helpful to buyers, too, as there are times when offers will not have much competition, and prices may be lower. Whether you are a buyer or a seller, we know that the process for deciding to purchase or sell is longer than the lead times for most other consumer transactions. Our website visits, in fact, peak in the winter months, when people begin to look at possibilities and market trends.
Therefore, it can make a lot of sense to bring in a professional advisor earlier in the process--in fact, it's one of the data points associated with better real estate transaction results. So don't feel that you have to wait until you are ready to look or list--we are here year round, and we prefer to gather information over time. Sellers often need to do work, and consultation ahead of time lets them show their homes to best advantage. Buyers often need to be qualified, and can come out of that process with a to do list for improving credit scores, or avoiding drops.
So don't let the winter season pass you by! As I've written before, our selling season starts earlier in many parts of our market than most realize, and the early bird can catch those sales. If you are a buyer, you shouldn't even wait that long--rates have already begun to rise. Should you have a lull in this busy season, give us a call. If not, then make a note to do so as soon in the New Year as you get the chance. We're ready to assist you.
Tuesday, August 2, 2016
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 Milford you can
say “If market conditions do not change and if no new listings come on the
market it will take 6.4 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.”
Tuesday, July 12, 2016
Friday, July 1, 2016
Interpreting Statistics
Yesterday's news for real estate in Connecticut was that unit sales for residential properties rose by 23.9%. That's the biggest single increase in a few years. However, the median price of a home dropped by 7.2%, which was also the biggest change in several months. What can we learn from that, and what are they measuring?
First of all, they aren't usually,in reports like this, looking at the same property being sold and resold. Some, like the Case-Shiller index, take the value of all of the real estate together in one city, and compare it to the total value in another period. Others aggregate lots of individual sale prices, but it still isn't apples to apples; that is, it's not the same house being sold at the first period mentioned, and again at the second.
Therefore, most such data can be skewed by the type of properties sold in the greatest amount. In this case, it's most likely because first-time homebuyers, lured by low interest rates and family formation, are out in greater numbers than high-end buyers. We know that this is true in general, because the loss of GE alone is causing very high inventory over a million dollars in Fairfield County. We also would suspect this explanation, due to the constant news about the weakness of Connecticut's economy, and the flight of older, wealthy taxpayers to states with estate tax rates that mirror the Federal ones (which is almost everywhere else). We also would think this distribution is likely because the first-time homebuyers are driving the market in other states as well.
So what does this mean for the value of an individual home? Well, it's good news in the sense that demand for homes in general will drive up prices over the long run. In the short run, it's anecdotally true that most homes purchased within the past ten years are selling for the same or less than they were bought for then. However, many factors could influence this. How much work has been done to the home? Exactly what micromarket is it in, and what's the supply there? How has the neighborhood changed over the past decade? Where's the buyer coming from, and how quickly does she/he need to move? How quickly does the seller need to move, and how much equity does he/she have? What are the other terms of the sale?
So, as with most things, the final answer is "it depends". However, the robust demand is cause for celebration!
First of all, they aren't usually,in reports like this, looking at the same property being sold and resold. Some, like the Case-Shiller index, take the value of all of the real estate together in one city, and compare it to the total value in another period. Others aggregate lots of individual sale prices, but it still isn't apples to apples; that is, it's not the same house being sold at the first period mentioned, and again at the second.
Therefore, most such data can be skewed by the type of properties sold in the greatest amount. In this case, it's most likely because first-time homebuyers, lured by low interest rates and family formation, are out in greater numbers than high-end buyers. We know that this is true in general, because the loss of GE alone is causing very high inventory over a million dollars in Fairfield County. We also would suspect this explanation, due to the constant news about the weakness of Connecticut's economy, and the flight of older, wealthy taxpayers to states with estate tax rates that mirror the Federal ones (which is almost everywhere else). We also would think this distribution is likely because the first-time homebuyers are driving the market in other states as well.
So what does this mean for the value of an individual home? Well, it's good news in the sense that demand for homes in general will drive up prices over the long run. In the short run, it's anecdotally true that most homes purchased within the past ten years are selling for the same or less than they were bought for then. However, many factors could influence this. How much work has been done to the home? Exactly what micromarket is it in, and what's the supply there? How has the neighborhood changed over the past decade? Where's the buyer coming from, and how quickly does she/he need to move? How quickly does the seller need to move, and how much equity does he/she have? What are the other terms of the sale?
So, as with most things, the final answer is "it depends". However, the robust demand is cause for celebration!
Wednesday, July 15, 2015
Friday, March 28, 2014
Recent Statistics
There have been new indications that shed some light on what we may expect for a spring market in residential real estate. It's been a brutal winter, but the February job numbers, which just came out, were not as bad as they might have been, and put Connecticut at 50% of its jobs regained from the lowest recessionary level. This, of course, compares with 92% of jobs regained nationwide, after awful weather everywhere, but we welcome any good news.
Other recent studies predict that the Northeast is the likeliest region to see multiple bids on property this spring, suggesting that demand has been postponed due to winter storms, and will "pop" when spring arrives (will it ever come??). Rates are edging up, which is another indication that time is of the essence for buyers, since monthly payments matter more than total cost for most people.
Another report from Zillow suggests that the West Coast is best for sellers, and the East Coast for buyers. That's not surprising, since prices in Connecticut are still 23% below their peak in June of 2006. It is yet another indication that our region will see strong buyer demand. Since the listing inventory is delayed, again by weather, supply may be tight.
In our office, we've been getting reports of greatly increased web traffic to our site, with strong demand for certain types of searches by buyers. Again, that would seem to indicate pent-up demand.
My crystal ball is a little cloudy, but my outlook, based on all of the above, is positive!
Other recent studies predict that the Northeast is the likeliest region to see multiple bids on property this spring, suggesting that demand has been postponed due to winter storms, and will "pop" when spring arrives (will it ever come??). Rates are edging up, which is another indication that time is of the essence for buyers, since monthly payments matter more than total cost for most people.
Another report from Zillow suggests that the West Coast is best for sellers, and the East Coast for buyers. That's not surprising, since prices in Connecticut are still 23% below their peak in June of 2006. It is yet another indication that our region will see strong buyer demand. Since the listing inventory is delayed, again by weather, supply may be tight.
In our office, we've been getting reports of greatly increased web traffic to our site, with strong demand for certain types of searches by buyers. Again, that would seem to indicate pent-up demand.
My crystal ball is a little cloudy, but my outlook, based on all of the above, is positive!
Monday, February 24, 2014
Tuesday, January 21, 2014
2013 Year End Market Statistics
The Following are New Haven and Shoreline County Market Statistics for 2013. Please click on the images below to view or click this link for previous market stats
Residential / Condominiums / Multi-Family
Residential Single-Family
Condominiums
2013 vs 2014
Residential / Condominiums / Multi-Family
2013 vs 2014
Residential Single Family Homes
2013 vs 2014
Condominiums
Thursday, February 10, 2011
Prices Holding Steady
When we look at the real estate market statistics from last year in Greater New Haven, we don't have much to crow about. All around, it was a blah year, made that way mainly after the tax credits expired in June. However, one thing that is surprising is that the prices didn't go down as much as you might think. Our Guilford office had a mean sales price only 1% or so down from 2009. Our market as a whole was down about 2.9%.
Those figures don't jibe with what the average person on the street thinks. Why is perception so different? One reason is that many things didn't sell at all, and, if they did, they had been reduced one or more times before they went under contract. Also, as we must always point out, these statistics are not the same as in other industries, because the same homes aren't selling every year. Therefore, the particular mix of homes could change, although that is less true when you look at numbers over a whole year. So it could have been that the home that sold for $330,000 in 2010 was as good or better than the average $340,000 one from the year before.
What the numbers do show is that people went for value. Properties that sold were in good to excellent condition, in established neighborhoods, and were priced to sell. Buyers tended to feel that they were in the driver's seat, and could choose among a broad range of options (which, as I've discussed before, was less true than they thought--another example of mistaken perceptions trumping reality).
What does it bode for this year? Value is still important. Basic conservatism will still prevail. Sellers who don't have to sell will still not sell unless and until they can avoid steep cuts. Buyers will continue to be fussy. But, finally, the market will improve. Maybe slowly, but clearly. And we can't wait!
Those figures don't jibe with what the average person on the street thinks. Why is perception so different? One reason is that many things didn't sell at all, and, if they did, they had been reduced one or more times before they went under contract. Also, as we must always point out, these statistics are not the same as in other industries, because the same homes aren't selling every year. Therefore, the particular mix of homes could change, although that is less true when you look at numbers over a whole year. So it could have been that the home that sold for $330,000 in 2010 was as good or better than the average $340,000 one from the year before.
What the numbers do show is that people went for value. Properties that sold were in good to excellent condition, in established neighborhoods, and were priced to sell. Buyers tended to feel that they were in the driver's seat, and could choose among a broad range of options (which, as I've discussed before, was less true than they thought--another example of mistaken perceptions trumping reality).
What does it bode for this year? Value is still important. Basic conservatism will still prevail. Sellers who don't have to sell will still not sell unless and until they can avoid steep cuts. Buyers will continue to be fussy. But, finally, the market will improve. Maybe slowly, but clearly. And we can't wait!
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