Saturday, May 8, 2021

Greater New Haven is Poised for Liftoff (Literally)

For decades, Greater New Haven business leaders have been pointing to the dwindling fortunes of Tweed New Haven Airport as a major barrier to economic development in the region.  This week's announcement that the airport will be privatized for at least the next 43 years, with a longer runway and a new carrier offering flights to several cities, is a huge boon to our area.  

Connecticut has spent most of its air transportation money on Bradley, which is now offers international, as well as domestic, flights, and is the biggest of the State's three airports.  There has been a great deal of rivalry between Sikorsky in Stratford and Tweed in East Haven.  Neither one has made much, if any, progress.  Both have been hampered by surrounding residential developments, short runways, and poor prospects for big carriers.  Nor has either location garnered steady support from its legislative delegation.  

It's a new day now for Tweed. By inking a private deal, public sector funds are no longer necessary.  The powers that be in Hartford don't need to be courted, and they should be nothing but enthusiastic about this outcome.  Both New Haven and East Haven, whose borders it straddles, will see upsides from this arrangement, apart from a boost to the region as a whole.  The terminal will be moved, which will ease the traffic burden on the Morris Cove neighborhood.  Jobs will be created for both municipalities, and other development should spring up on the terminal side.  

Once we can offer residents convenient flights to hubs or favored destinations, within minutes of their homes, people who travel regularly on business, or even for pleasure, will reap major benefits.  Whether they park at the airport, get dropped off, or take a short Uber ride, they will save hours of time now taken up with congestion leading to the NYC airports.  The certainty of the amount of lead time required to get to Tweed, and the small size of the TSA line, will outweigh in many cases the need for stopover plane changes to many cities.  

Regional business leaders have long known the untapped demand for a viable local air transportation option.  With the huge increase in remote work possibilities brought on by the pandemic, many more people are likely to choose to live in Greater New Haven.  We have recreation, schools, health care, and the arts, all in abundance.  Now we will have commutability as well.  Let the commercial expansion begin!

Monday, May 3, 2021

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 Branford you can say “If market conditions do not change and if no new listings come on the market it will take 2.0 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”.





Saturday, April 24, 2021

Are We in a Real Estate Bubble in Connecticut? Tips for Deciding

Real estate cycles are inevitable.  No matter what happens, there are always economists around on both sides of the bubble question.  Every hot market is described by some of them as being fundamentally different, and therefore not likely to go down.

Market always go up and down.  Economic cycles always occur.  There are several factors to consider when you are a buyer or a seller in a market that is changing rapidly:

1--Where in the cycle are we?  Are there reasons to believe that there is more growth to come?

2--How does the local market compare?  Have we been ahead of the national curve, or lagged behind?

3--What are interest rates doing, and how is that likely to change over the next couple of years?

4--Will the transactions being considered balance out?  If there is both a buy and a sell contemplated, are they in equivalent markets, so that the "buy low, sell low" or "sell high, buy high" rules apply?

5--Are there reasons to believe that this part of this economic cycle might truly have any unique factors?

6--Do other life or work considerations come into play?   (Hint:  Other considerations always come into play!)


When considering our particular Connecticut market, it is important to note that we have lagged behind the rest of the country in price appreciation, and this has gone on for a couple of decades, at least.  That would suggest that there is more room for growth in this area than in some others.  

Interest rates are not likely to be this low for a very long time, even though they have already begun to rise.  Even in a "sell high, buy high" market, and even if only the "buy high" applies, interest rates will make a huge difference over the life of a mortgage.

There really are some unique factors in this economy at this time.  People have extra cash, in many cases, because they may have gotten stimulus checks, they haven't traveled, they haven't been able to dine out, and they haven't bought anything but garden tools, athleisure clothes, and liquor for a year.  So the pent-up demand isn't just for housing--it's for everything.  Spending more on a house can be a better plan than eating out every night, and with a longer-lasting benefit.  Working at home may not go away for many people, so extra space is important.  Our region is well-positioned to see an influx of residents from big urban areas.  Some of our drawbacks in transportation and infrastructure are being addressed nationally, with funds for improvement.  These points can possibly tip the scales on the question of this market really being different from other hot markets.

So, we are down to the last question--are there other considerations?  Whether buying or selling, it's time to weigh the options, and act quickly.


Thursday, April 15, 2021

Tips for Buying a Home in a Wild Market

OK, so you've decided to buy a house.  You aren't sure what you want exactly, but think you will know it when you see it.  There are some strong preferences, and a price range--actually two, one if you buy finished, and one if you need to do a lot of renovation.  Where should you start?

1--Develop a good relationship with a real estate agent.  Much of what comes onto the market now is spoken for ahead of time, if people know it is about to be listed.  You need to have a professional ear to the ground, as well as your own.

2--Get prequalified.  You may want a loan, even if you don't want a mortgage contingency.  Be sure you are right about how much you can borrow.

3--Sign up for an automated search.  This seems obvious, but don't wait until the weekend to look at everything at once.  Check your results every day.  

4--Be flexible about traveling to visit listings.  Try to be available on relatively short notice, so that you will look at homes before they are gone.  Even if the house isn't for you, you are developing a better sense of what you want.

5--Keep a running ranked list in your head.  Every time you see a house, slot it into your ranked list.  If it wouldn't make the top three, you may not even need to see it.

6--Don't get seduced by details.  Don't ignore number of bedrooms, neighborhood, or price, just because it has a nice hot tub.  Stick with what you need.

7--Have a mental budget for repairs.  Know what certain things will cost, at least in ballpark terms.  You don't want to have to put in contingencies, or run around getting quotes, if you could do that ahead of time.

8--Be prepared to act quickly.  In this market, speed counts.  Have your limits firmly in mind.

9--Don't play games. A couple of thousand here or there won't matter as much as the interest rate.  Offer what you would be sorry to hear that someone else bought it for, if you could have afforded that amount.

10--And, last but not least, keep a sense of humor and perspective.  Roll with the punches.  You will get a home eventually.  Sometimes you avoid a mistake, or gain new knowledge.  Try to have patience--you will probably need it!

Tuesday, April 6, 2021

Inventory is the Key to the Housing Market

Everywhere in the country, there is talk of a red hot housing market, for many reasons.  Low interest rates, pent up spending and demand, and pandemic desire for more space.  Supply and demand, therefore, have gotten way out of  whack.  Today, we circulated an article featuring 76 full-price offers on one home.  

That's true in many regions, but what is happening in Connecticut?  Even that needs to be broken down by county.  Fairfield County is booming, and is absorbing many of the 24,000 people that have moved to Connecticut in the past year.  New Haven County is seeing some of that movement.  West Hartford, one of the most popular towns in Hartford County, is actually down 8% in the first quarter.  Of course, this can all be explained by the old adage:  Location, location, location.  The closer to NYC, the higher the price, and, now, the hotter the market. 

Many families moving here are counting on working from home for at least some of the time going forward, but they want to be close enough to commute when necessary. For now, many are avoiding public transportation, but that number will diminish as vaccinations increase.  Prices are rising rapidly in many towns near the NY border.

Despite all the reasons for the increase in prices listed at the beginning of this post, the real driver is inventory.  Many sellers were burned in earlier attempts to sell, or haven't found a place that they can go.  They are tempted by the demand by buyers, knowing that they may get more than they expected.  However, they also know that when you sell high, you usually turn around and purchase high as well.  

That shouldn't matter.  People should make decisions based on lifestyle, personal preferences, and proximity to friends and family, and let the investment side of the equation take a back seat.  Since selling and buying in the same market is a wash as far as prices go, it should come down to individual choice.  And, if you want to choose a new home, this is certainly the time to do so.  The rapidity of the selling cycle may make life intense for a while, but the uncertainty is short lived, and the benefits of moving last as long as you are in the new property.

So the market comes down to the sellers--will they provide a spring season supply?  We very much hope so.  Sales depend on it.