Spring was very late in coming this year, and it's been raining every morning this week when I went out to get my paper, so summer is late as well. All around the country, real estate professionals were complaining about the effect weather was having on home sales. We all expected that May and June would be crazy, and would make up for the lost winter, as happened last year after the blizzard in February.
We're still waiting. Yes, we're busy, but no more so than in the spring and early summer that follows a normal winter. We are missing that catch-up phase, where buyers and sellers come out of the woodwork when the weather improves. This part of the year has also been the same in many parts of the country, albeit the worst area has been the Northeast.
In other places, it could be that anemic sales relate more to lack of supply than to lack of demand. It could be that Connecticut, with its 50% recovery rate from the recession is lagging for economic reasons, while others tell a different tale. We're not sure. But we are waiting for more activity, and keeping our eyes and ears open for the cause of the delay.
Action step for buyers and sellers: Treat June as though it were April. Make plans to list, which we see happening, and buy, which we're hoping will follow!
Showing posts with label Northeast. Show all posts
Showing posts with label Northeast. Show all posts
Friday, June 13, 2014
Tuesday, July 14, 2009
Second Quarter Results
A little silver lining to the real estate cloud--our second quarter results show definite improvement over the statistics of the first quarter. It's still bad, but getting better. The whole Northeast is down about 13%, and this area is about the same. If you multiply that times the decrease in the average price, you get a decline of about 23% from last year. That number includes a lot of foreclosure real estate, which usually transfers at lower prices, so the H. Pearce numbers look better. Our second quarter was less than 10% off from the year before. It tells you something about the past couple of years that such a result would make us happy!
When asked what I thought would happen in the last half of the year, I predicted a further narrowing of the decline. Although prices may fall more in some areas, it looks as though activity will not go down further, due to a combination of consumer confidence and government support.
The numbers also seem to show that people who use a Realtor get more for their homes than people who do not. While this can be explained in a number of ways, I have little incentive to argue with it!
When asked what I thought would happen in the last half of the year, I predicted a further narrowing of the decline. Although prices may fall more in some areas, it looks as though activity will not go down further, due to a combination of consumer confidence and government support.
The numbers also seem to show that people who use a Realtor get more for their homes than people who do not. While this can be explained in a number of ways, I have little incentive to argue with it!
Wednesday, March 11, 2009
Declining Markets
We recently received a list of "declining markets", as defined by AIG (some irony there, huh?) for appraisal purposes. Some states--Arizona, California, Florida, Michigan, and Nevada--are considered Severely Declining in their entireties. Our county has a list of declining markets, defined by zip codes, which appears to cover almost every town in our region. Hartford's noted zip codes are listed as Moderately Declining.
What this means is that, when you go to get a mortgage in an area marked as Declining, you are subject to certain restrictions or rate adjustments, in order to protect the lender. Therefore, since a town like Guilford is on this list, everything in Guilford will be subject to a higher rate for the same LTV (loan-to-value) ratio than a property listed in, say, Cambridge, Massachusetts.
I chose Cambridge for several reasons: it's like New Haven in some obvious ways; it's still in the Northeast, where real estate sales are broadly down; and, finally, I knew the zip code. In case you thought New Haven might be spared, 06511 through 06515 are all there as well.
This may make it easier to understand why so many sales are falling apart after the contracts are signed, since people may not be aware of these rules before they actually sign a sales agreement on a particular house. They may have been counting on getting a higher LTV, or a lower rate, both of which may have been advertised, but then are not applicable in the zip code in which they are buying.
It's hard to know how to fix this problem, but it needs to be addressed if we are going to break the cycle of lagging real estate transactions. This rule is not only arbitrary, since there are submarkets within these areas which are selling well and where prices are not declining, but lags in time as well, being based on prior sales. In addition, it punishes those who most need to sell, but throwing another roadblock in the way of their attempts to find buyers.
What this means is that, when you go to get a mortgage in an area marked as Declining, you are subject to certain restrictions or rate adjustments, in order to protect the lender. Therefore, since a town like Guilford is on this list, everything in Guilford will be subject to a higher rate for the same LTV (loan-to-value) ratio than a property listed in, say, Cambridge, Massachusetts.
I chose Cambridge for several reasons: it's like New Haven in some obvious ways; it's still in the Northeast, where real estate sales are broadly down; and, finally, I knew the zip code. In case you thought New Haven might be spared, 06511 through 06515 are all there as well.
This may make it easier to understand why so many sales are falling apart after the contracts are signed, since people may not be aware of these rules before they actually sign a sales agreement on a particular house. They may have been counting on getting a higher LTV, or a lower rate, both of which may have been advertised, but then are not applicable in the zip code in which they are buying.
It's hard to know how to fix this problem, but it needs to be addressed if we are going to break the cycle of lagging real estate transactions. This rule is not only arbitrary, since there are submarkets within these areas which are selling well and where prices are not declining, but lags in time as well, being based on prior sales. In addition, it punishes those who most need to sell, but throwing another roadblock in the way of their attempts to find buyers.
Wednesday, January 21, 2009
Back to the Cold
Today is my first day back from vacation. I just finished going through my 600 emails and dozen papers, and tomorrow I will start writing articles that I've promised to people. Like a lot of people, I hope that the new President and his administration will bring a new beginning for our industry and others. The government is certainly pumping money into the economy--it just has to find its way down to the real estate market. And, in the Northeast, the weather isn't helping! Every day seems to bring snow, ice, or freezing temperatures. We know from other years that people don't look at property under those conditions. We also know that it can lead to a nice pop as the spring market blooms (pun intended), and never before have we needed that so much.
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