Your New Neighbor May Be from New York

 My new next-door neighbors are from New York.  They just moved in, and they are planning to telecommute from the shoreline. They have high-level jobs that can be done remotely, for the most part. They have little children, and no idea what schooling will be like in the near future.  They have bicycles, a boat, a pool, and a new second car.

My husband and I also have one adult child (accompanied by a boyfriend) sheltering with us.  They are also telecommuting from New York, with good jobs, now being performed remotely.  They aren't sure when their offices will reopen, nor whether they will soon--or ever--have to be physically present in those locations.  They have new exercise routines, new athleisure wear, new cooking accessories, and new disposable income from no rents, no bars and restaurants, and no travel.  They have started looking at houses online, and near us.  Many people we know have similar stories.

Our friends, many of whom are retired or working remotely, are planning ahead to spend time in another part of the country this winter, if they haven't already decamped to a vacation home.  They are renting for months at a time, and testing out possible retirement locations. Rather than use hotels, or try to travel, they are opting for staying put elsewhere, to have a change of venue safely.

You may have relatives, friends, and neighbors like this as well.  Over 10,000 New Yorkers changed their addresses to Connecticut in the second quarter of this year alone.  Anecdotally, we are seeing lots of real estate activity from out of state, and many NY license plates on the roads.  We all know that the pandemic is current, but it's somewhat of a surprise that more permanent choices are being made so quickly.  It's been great for our business, and it will be good for Greater New Haven as well. New Haven proper, although a city, is low in density compared to other places, and remains very attractive for those who want both proximity and outdoor space. After long years of population decline, it's nice to be trendy again!

What does this mean for the real estate market in our region?  Supply, which was already slim, is even tighter.  Prices, which were inching up, are moving more quickly in that direction.  Time on the market is declining.  All of this puts sellers in the driver's seat, and advocates for selling--or even renting for a season or a year--soon.  

Multiple Offers

I just got off the phone with a disappointed buyer, who thought he had bought a property, and just learned that a higher offer came along before it was signed, and he lost out.  These situations vary, in that some sellers continue to work with the first offer, some let everyone rebid, and some set a firm deadline to decide and sign. What is the same is that there is always at least one unhappy person, who didn't get a property.  In this case, it had been less than 24 hours, but sometimes it can go on for several days or even more.  

There are ways to prevent disappointment.  First of all, don't hesitate.  If you see a great property, make an offer quickly.  Try to make the offer as clean as possible--assume that, in this market, there may be other contenders.  Don't put in contingencies that you can live without having.  Match the seller's dates where you can.  We see so often that people insist on things, and then don't get the property, after which they say that they would have given in.  

I always tell people to make the offer that they would be unhappy to hear that someone else got the property by making.  If you are going to say later that you would have gone higher, then do it upfront.  If you have other access to cash, to make a better offer, don't wait to pull that out.  Go all in.  When listings are in short supply, and they are in Connecticut, that's called a seller's market.  If you are the buyer, that means that you are not driving the bus.  Accept that and act accordingly.  You can even consider writing a letter about why you would be the perfect buyer, and how much you love the home.  It has been known to do the trick on occasion, and it can't hurt.

Don't offer what you can't afford, because you are wasting everyone's time, including your own, but be realistic.  Your parents, or other sources of advice, probably bought their first homes when interest rates were very high, and they may not be accurate on the cost of money now.  Be sure to get preapproved, so that you can react quickly if necessary.  If there is a counteroffer, be prepared to answer almost immediately.  You need to know your top price, just the way you would if you were bidding for art at an auction.

And, if you still don't get the property after following the advice above, don't waste time on regrets.  You did your best, and it is what it is.  Move on, and find the home of your dreams next time.

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 Madison you can say “If market conditions do not change and if no new listings come on the market it will take 8.2 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.”



Todays Price Compared to the Peak

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East Rock, Downtown, Edgehill, St Ronan areas of New Haven and Hamden trends

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Current Absorption Rates: Single-Family Residential Homes

Connecticut Home Prices and Home Values

Image Reproduced from Zillow.com

Absorption Rates - Single Family Residential Homes as of July 1st