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 Hamden you can say “If market conditions do not change and if no new listings come on the market it will take 6.9 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.”



Report from NYC

Once again, I've met with colleagues from around the country, this time in New York City.  That market is much softer than in the past few years, especially at the upper end (although their upper end is so high that we can't even imagine sales at those prices!).  In fact, the upper end everywhere, whatever that means in a particular market, has slowed down considerably.  Supply exceeds demand, and is often over a year or more in quantity; here, that supply is much higher.  In Middlesex and New Haven counties, 5 homes over $2 million had sold by July, and there were 87 active listings in that price range on the market.  Just do the math.

On the lower end of price ranges, almost every company reported that sales were being affected by lack of inventory.  In some places, that meant that the supply of homes could be measured in days.  Again, we have more supply in our market, but even we feel that there are not enough homes in very good condition and under $300,000 in some places.

When you go to a meeting that has national representation, you can really see how far behind Connecticut lags, in almost every category--job growth, population, birth rate, home prices, and home sales.  We need to get our act together, and sooner rather than later.  Having said that, NYC is not the boom town of the past few years, and agents there complained that sellers wanted last year's prices, while buyers wanted next year's prices.  That's food for thought for sellers here, as well.

Showings and Sales

One of our colleagues has determined a linear relationship between showings in the first week of a listing, and eventual sales price.  While we all know that overpriced listings eventually sell for less than properties priced "correctly", we know now that you can tell that right away, by the interest at the very start of the listing period.  When a listing goes live, it needs to start having showings right away, in order to be statistically likely to sell quickly and at a good price.  If people notified or searching see something that they believe is uncompetitive, relative to other listings that they've seen, they won't rush to see it.  And it won't sell for as much, then or ever.  So pay lots of attention to what you list your property at, and be very wary of the argument that "it's worth trying it first, at the higher price".  You may regret it later.

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 Hamden you can say “If market conditions do not change and if no new listings come on the market it will take 5.6 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.”



Labor Day is Around the Corner

Even though the weekend traffic indicated that many people are headed home after the summer, and that most schools are starting this week, we've always considered Labor Day to be the kickoff for the fall real estate season.  And, even though most people think of spring as the primary buying and selling season, that is less true than it used to be, particularly in Connecticut.  We have an older population and a lower birth rate than other states, so we are less driven by the school year, and maybe more by taxes.  Many people want to buy or sell before the end of a calendar year, to deduct expenses sooner.  If that applies to you, it's time to get moving.

Fall is an excellent time for buyers in particular, since the expenses of heating and plowing start when the temperature drops.  And, given the aforementioned interest in the tax consequences of real estate, autumn is when sellers strongly consider offers that they might not accept earlier in the year.  I say every year, so I'm saying it again now:  The best time to buy real estate is between Halloween and Thanksgiving.  Prices are low, and motivation is high.

Sellers also should pay attention to the fall boomlet, since it's often a new pool of buyers that are beginning to look now.  Properties, especially those new to the market, have fresh eyes to consider them, especially since people spend more time on the internet and with newspapers when they have less daylight to use for other pursuits.  Homes also show well in crisp, clean air and changing leaves.  New England is at its best! 

So during the last picnics of summer, think about your own real estate goals for 2016.  Have you achieved them yet?  If not, the big push toward the close of the year starts now.

Real Estate Trend Indicator



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 New Haven you can say “If market conditions do not change and if no new listings come on the market it will take 5.6 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.”



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 North Haven you can say “If market conditions do not change and if no new listings come on the market it will take 4.2 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.”



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 New Haven you can say “If market conditions do not change and if no new listings come on the market it will take 5.0 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.”
 

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 Middletown you can say “If market conditions do not change and if no new listings come on the market it will take 7.4 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.”

Connecticut Home Prices and Home Values

Image Reproduced from Zillow.com