Sales Around the Country This Spring

It's always interesting for me to visit with my friends from other large independent companies around the country, especially when the market is changing rapidly.  I just got back last night from Charlotte, and the mood from other places is almost giddy.  The feeling nationally is that market activity will be back within 10% of normal levels by the end of this year.  That's a big improvement from the projections we heard only last fall, when most experts thought that historical norms of housing turnover would not return before 2015.

Now the commonly heard complaint is lack of inventory.  There simply aren't enough properties for sale to meet the demand. The average number of months of inventory seems to be about three.  Well-priced, well-maintained homes in many areas get multiple offers--sometimes dozens--within a few days or weeks of being listed.  Once they go under contract, the problem that arises is that appraisals have been lagging, as they always do, so there are issues with mortgages.  In some cases, sellers and their agents are going back to the highest bidder and telling them that they need to release all the contingencies, including mortgage, or they will proceed to the next offer. New construction is hot everywhere.

Here in Connecticut, we're recovering slowly.  (Maybe that's why they call us the Land of Steady Habits?)  We have just over eight months of inventory overall in our county, with some towns much higher than that.  Guilford, for example, has 17 months' supply.  Our supply of million dollar homes will last several years.  So, for us, the report from other places tells us what the future will be like.  And it will be great.  However, if you are a buyer, my advice is to buy right now!

Mortgage Changes

We've talked about mortgages before, but it's always worth pointing out when things change. The appraisal issues--time to get one and values obtained--were front and center near the end of last year. Now it's the paperwork and length of time involved in processing an approved loan. I'm not sure that most buyers realize how much documentation is involved in getting a loan from approval to closing. Almost all loans now come approved with contingencies--various types of proof that are needed to substantiate the loan or the loan amount. To many people who have been through the process in the past, what gets requested now can seem absurd. Even to those of us who have been steeped in the industry, the constant changes in RESPA requirements seem bewildering and onerous. There is even a three-day period now between the closing statement production and the closing.

For buyers in a hurry, these rules can be infuriating. Perhaps even more so, sellers--who may not have gotten a loan recently, and may vastly underestimate what's involved today--are often unsympathetic and extremely annoyed. Even attorneys weigh in on the difficulty of scheduling a closing these days.

A good analogy might be the security checkpoints now present at every airport. Comparing them to what was necessary 20 years ago is almost impossible--it would be like comparing a stagecoach journey to a space trip! In addition, many of us feel that we're just trying to avoid a repeat of the last disaster; in one case, 9/11, and, in the other case, the financial meltdown of 2008. Whatever the reason, and whatever you may privately believe about how much the new regulations will prevent similar problems, many of these procedures are here to stay. So pull up a chair, and wait patiently for the closing.