Buying in Connecticut May Be the Better Option Over Renting

 In many parts of the country, renting is cheaper than buying.  Connecticut, especially Greater New Haven, is not typical.  Thanks to years--decades--of languishing prices, we are no longer an expensive place to buy a house.  On the other hand, given our student population, and our arts/culture hub, we are one of the hottest rental markets across the United States.  In fact, the last survey we saw showed us as second!

What does that mean for buyers?  It still is affordable for many to purchase, especially given the interest rates.  Although there is a lot of competition, it is largely local, except for maybe the Shoreline.  The rental market, thanks to Yale, is international.  Listings are creeping up, and offers have been slightly slower to come in.  Competitively, then, it's a little easier to buy.

Will there still be appreciation?  It appears that millennials will be forming households at a rapid rate going forward.  Even though we have been told how different they are than their parents and grandparents, they seem to want many of the same things in a home, especially during the pandemic.  So the supply going forward should keep prices up for years to come.  There hasn't been much home construction for a long time, and that, right now at least, is backed up with regard to both supplies and labor.  

What should sellers do?  There is still a need for more product, so keep those listings coming.  Don't be greedy, and don't count your chickens before they hatch--a lot can happen before a closing takes place.  You will, however, be in a great position to buy when prices are lowest, at the end of the year, if you sell now.  

And Labor Day, the start of the fall market, is just around the corner for everyone!

Tips for Deciding Whether to Buy a House Now

 With all the activity around the country in residential sales, many buyers and potential buyers are wondering whether it's time to sit out the rush to ownership.  Even without the emotional turmoil caused by frantic bidding followed by disappointment, they are nervous about the economics of buying.  Here are some tips to consider:

1--Most importantly, what you pay every month is the key factor in deciding what you can afford.  Although home prices have risen rapidly in many price ranges, interest rates are still low.  Once you know the monthly payment associated with a given purchase, you can compare that to your total earnings.  Interest, over the life of a mortgage, makes more difference than a few thousand dollars in cost, so keep that in mind;

2--Buying at higher prices is not as risky if you plan to stay for awhile.  Americans in general are staying in their homes longer than they used to do, and most price rises even out over time.  Just as you are unlikely to buy at the very bottom of a market, you are statistically unlikely to be purchasing at the very top;

3--With that in mind, consider the likelihood of having to sell quickly for some reason.  If you are prone to be transferred often, are looking to change jobs, careers, or location, you might decide to wait.  Real estate, although it is a great investment, is illiquid, meaning that you can't just take your money out whenever you need it.  If there's a high probability that you might have to do that, you should probably wait;

4---Next think about whether you might decide to move again within the area.  If so, that's less risky, because it's fine to buy high if you are also selling high.  If all the homes go up in a region, and you are planning to remain, you will just conduct that next sell/buy at a higher price point.  You will have more equity, and you will pay more for the next property, in an inflationary scenario;

5--Inflation figures into the equation in another way.  If you have basic living expenses that will be disproportionately affected by inflation, and you do not expect your income to match the rise, then you should be more conservative.  For instance, your grocery bill and your income will likely rise or fall together, and eating out is not a requirement, so doesn't have to stay constant. Suppose, however, that you drive for a living, and gas prices take a big chunk of your monthly income--that might be a reason to worry more about inflation.  It all depends upon whether you are more or less impacted by generally higher prices;

6--We are heading into the fall bumper season for real estate. If you've been shut out in the spring market, more houses will be coming on the market right after Labor Day.  Sellers are at their most flexible in the late fall (actually, between Halloween and Thanksgiving), so you just might get a better deal soon.  That should give you hope that you can be in your new home for the new year!  Whatever you decide, we are here to help you.

Will Seller Financing Return to Residential Real Estate?

 During prior periods where it was difficult to sell property, many owners agreed to take back mortgages, so that buyers could afford to purchase.  We are almost in a reverse of that situation now, because there are lots of buyers and not enough sellers.  However, there is one similarity, which is that some people who want to buy cannot get financing through traditional sources, although they may be good credit risks for other purposes. 

 In addition, there are sellers out there who are not selling due to the need to move, but who may be downsizing now, given the sellers' market we are now experiencing.  If they do not wish to invest the proceeds in the stock market, and they are not  buying another house right away, or for the same amount of money, lending to the buyers could make sense.

Interest rates are incredibly low right now, and people putting their funds into cash accounts are getting almost no return on that investment.  If, instead, they lent some of the money for the sale as a second mortgage to the buyers, they could potentially end up with far higher returns.  Buyers might be willing to bid a little more, if the sellers were taking back paper for the additional amount.

Not much has been written about this avenue in this most recent market upturn.  However, it's an option for both parties, and might be considered as an alternative for willing buyers and sellers out there in the current interest rate climate.

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!

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.  

Are We Headed for the Roaring Twenties Again?

 Residential real estate is booming right now, with only supply as a limiting factor on sales.  Now that the vaccines are in play, and 2020 is behind us, what's ahead of us?  I read one commentator's prognostication that we may repeat what happened after The Great Influenza 100 years ago.  And that turned out to be the Roaring Twenties.

We aren't likely to see Prohibition again, or probably flappers, but we may be in for the dizzy partying and mad optimism that characterized that decade.  I think all of us expect that we will be headed for distant places, or sports arenas, or at least crowds somewhere.  While old traditions never come back exactly in the same way, commercial real estate, and even office space, may enjoy a revival.  

All of that points to using the last few months of winter, and isolation, to plan, and execute, your real estate activity for 2021.  You may be able to attend open houses by this summer, but will you want to do so then?  Won't you want to be on vacation, or at the beach?  This is the time of year when people search for real estate on line, which makes sense.  Now that we've figured out the logistics of buying and selling with little or  no personal contact, it can also become the season for transacting.  

The desire for outside space, home offices, personal gyms, and kitchens made for cooking won't disappear.  All of us plan to hang on to some habits from the pandemic.  Here's our chance to set ourselves up for the best summer/fall ever!  You can buy now and renovate, renovate now and sell in the spring, finance a second home that can be a retreat or a refuge, or even build your dream house.  

This is a very special time in the economy, where the stock market is high, as is real estate, while people lucky enough to be employed have disposable income from activities they cannot pursue in isolation, and interest rates are historically low.  All of these factors add up to the perfect time to upsize, downsize, expand, acquire, and enjoy your living space.  As we head into the last few months of being so careful, let's use them productively.  A bright future can be seen at the end of the tunnel.  Act now, and enjoy for years to come!

Don't Let These Interest Rates Go To Waste!

One client we know is refinancing this month, at a rate of 2.34% on a jumbo mortgage. That's hard to believe, but it's important not only to believe it, but to act on it. Rates will most likely go up next year, and they typically go up seasonally as well, with this being the lowest point of the year. Another client, whose primary house we just sold, is going to fix up her second home with a line of credit at these rates. You don't have to refinance, though. We have another client who called about refinancing, and we asked if he had the home of his dreams. When he answered that he would move to the immediate shoreline, if properties in his price range were available, we encouraged him to pursue his dream now. Prices are less important, as we all know, than monthly payments, and it may make a stretch purchase into a doable one. It can also make sense to purchase a home that already has the features you may be lacking, as opposed to doing work on an existing property. Renovations are always cheaper than moving. Another client was thinking about a second home, and this is certainly a great time to acquire one. We advised him to think about a second home as a gathering place for family, and compare it to family travel. Since the latter isn't possible right now, it makes even more sense to invest in property nearby. In fact, a vacation home in Connecticut has never been so appealing, for all kinds of reasons. No testing necessary to visit there! Finally, do you want to buy another pair of leggings, novelty pajamas, or gadget over the Internet? Or would you rather spend your holiday funds on a lasting investment--your dream home? The choice is yours, and the time is now.

Still Time to Be Home for the Holidays

 Today is Veterans Day, and that marks, for us in real estate, the beginning of the rush toward the end of the calendar year.  There are about seven weeks left, and that's just enough time to buy before December 31st.  But not with too much time to spare!

As we've often posted, transactions can proceed more quickly in this season.  The holidays won't be the same this year, but that means that more people can move, because they won't be giving or attending so many parties--hopefully not any.  Days off at this juncture--and many people saved vacation days and then couldn't use them, so need to take them now--can be devoted to packing and unpacking.  Long weekend days, that used to be full of errands, brunch, gyms, and shopping, can now be used getting a house ready for inspection, or for decorating your new home.

This year in particular, buyers who have been waiting should be motivated to act now, since restrictions on activities have been increasing, not loosening.  If you are going to be in lockdown, or working/studying from home, don't you want it to be in the home you've been craving?  Get the space you need soon, so that you can enjoy it in the months ahead.  

Real estate is almost alone among industries (except, of course, for delivery services) in having a boom year.  Don't expect that you will get a bargain, even as the traditional selling season wanes.  Supply is very short--about one month in most of our New Haven/Middlesex region.  That means that you should jump on anything you see that meets your needs.  Consider not just what you think the "market price" should be, but what it's worth to you.  With all those extra hours at home, you can amortize the cost of your new home easily.  In addition, with such low interest rates, you will be able to buy more at the same monthly payment amount.

Many people sat on the sidelines for the past few weeks, mesmerized by the election.  It's over, and the year is almost over also.  It's time to find, if not your forever home, your pandemic place.  It's out there, waiting for you to make it your home for the holidays. 

Don't Discard the First Offer

 In this current market of low inventory and motivated buyers, many properties have been going on deposit quickly.  The national average, I read recently, is 22 days from listing to contract. In that kind of environment, even in the traditional "off" season of the late fall, people can wonder about whether to take the first offer they get.  They often think that they either listed the property for too little, didn't get enough exposure to the market to turn up the most avid bidders, or should wait for more offers, to stimulate a bidding war.

The answers to those potential strategies would be no, no, and no.  The first offer is often the best one.  That's because people are very well versed in the inventory available when they are looking.  They know when the right property comes along, and they frequently jump at the chance to take it off the block with a good offer out of the box.  Secondly, the information flow now, between search parameter feeds and instant posting of new listings, means that the time to get something fully exposed to potential buyers has dropped dramatically.  Those most interested in buying soon are watching closely.  Sometimes, I'm surprised that they may tell me about a new listing Pearce has!  Finally, bidding wars are great, but we should always remember what people say about the stock market:  Bears do well.  Bulls do well.  Pigs get slaughtered.  Don't be greedy.  If an early offer meets or exceeds what you expected to get for your property, grab it.  It's time to sell and move on.  Bidding wars may, in fact, result in a higher price if they occur.  However, they can also turn buyers off, who can feel they are being used, and drop out. The chance of losing everyone isn't worth the chance of finding someone who will overpay to beat out others.  

At this time of year especially, time is fleeting, and taking an early offer means that sellers can turn around and buy something else before the end of the year.  Supply gets thinner as the holidays approach, for many reasons--weather, time, difficulty of showings, and the inevitable decisions to wait until spring.  The sooner you buy, the more choice you have.

This is not an equivocal message.  If you have a number in mind, and it's a rational one, don't ignore an offer that comes close to meeting it, or meets it.  Moving forward when interest rates are this low makes more difference than the last couple of thousand in the price could ever do.  

Halloween is the Witching Hour for Real Estate Sales

 Every year at this time I repost the same advice:  If you are looking to buy real estate, we are now approaching the very best time of the year to do so.  Buyers will get the lowest prices, and the lowest interest rates, between Halloween and Thanksgiving.

It's not rocket science.  Sellers who have had their homes on the market are more likely to do the expedient thing and accept an offer before the holiday season.  Often, that offer is lower than it would have been in the spring, where there is more competition for buyers.  When considering that lower offer, people who already have another home, be it a vacation/winter home or a relocation move, start factoring in the cost of keeping their current house through the winter.  Heating and plowing are two big concerns, and they both can take mental energy as well.  With the end of the tax year looming, they may also decide to take either their gains or their losses; as we know, any deadline will do, when someone is making a decision they find difficult.  December 31st is a clear finish line for many things, and home sales are no different.

Because the volume of unit sales is lower, and because most businesses plan for down time at the holidays, the closing process can progress more quickly at the end of the year, so don't be discouraged if you haven't bought yet.  There is still time!  But don't delay--not every offer goes through, not every inspection turns out well, and other obstacles can arise.  It helps to think of early November as the deadline for signing a contract.

Will COVID change this traditional pattern?  I doubt it.  With more time this year, due to fewer family gatherings and virtually no parties (that aren't virtual--pun intended), sellers can do what's necessary to close, more easily than in prior years. There are even homeowners who have used this pandemic to do major clearing out and decluttering--sadly for me, I am not among them, but I do have clean house envy.  In a telecommuting world, it's important to be able to work from your home, and you are certainly spending more time in it. 

And that's the final factor for this year's prediction--people will be willing to do more work on purchased homes, so that they can nest comfortably going forward.  Their biggest selection criterion will remain location, but that will include open space and distancing.  If a home has those elements, potential drawbacks may matter less. Plus, supply is lower, increasing the likelihood that inspections may loosen up.  All of this should convince possible sellers to go for it.  There's no time like the present!  

Elections and Real Estate

 Elections, especially presidential elections, are good for real estate.  It's clear how having the economy strong helps the incumbent to stay in office.  It's not always clear how that can be done, although lowering interest rates is always helpful.

This year, interest rates are already very low.  It's still true, we think, that this time of year is when they are lowest, so it's rarely a mistake to buy or refinance now.  The uncertainty of an election also can make it easier to buy when others are not taking chances.  During this particular season, the stock market has been volatile, meaning that real estate looks safer in comparison.

In Connecticut, we have always associated fall with beautiful colors and changing leaves, but we also see it as a time of renewal.  Crisp air brings the return to school, and often gives people a spring in their steps, after a summer of humidity and heat.  That can be a spur to increased activity, and a return to normal days and weekends at home, perfect for looking at real estate.  

We find that very early morning is a busy time on our website, and cool, dark mornings are perfect for surfing the web.  Why not curl up with an iPad, a cup of coffee, and some new listings?  Then arrange to see them this weekend!

For sellers, we would again remind you that this fall is not like others--the market is still busy.  Just blow those leaves off the driveway, put some pumpkins on the doorstep and some cookies in the oven, and open your doors for buyers to visit.  You can still be in your new dream home by the end of the year!

Millennials Should All Be Buying Houses Now

 Although the rate of homeownership for people 25 to 34 is lower than in previous generations, 1 in 3 millennials owned homes as of the end of 2018.  Many more of them are looking and buying today, in a market with interest rates that should make everyone look up and take notice.  Some rates are now as low as 2.5%, and we all know that what your interest rate is matters more than the price of the home, within reason.  Over the life of a mortgage, you will be saving tens of thousands of dollars by buying when rates are so low.

Even if the economy during a pandemic weren't enough to drive rates down, the presidential election would be.  Every four years, there is a downward spike before Election Day, which gives you six weeks or so to capitalize on that trend and buy.  As our agents know, I remind buyers every year at this time that it's the best time of the year to buy a house, and, every four years, it's slightly better.  My running friend Ray Fair, a Yale professor who predicts presidential elections, has a model that favors an incumbent with a low unemployment rate and a high growth rate.  Presidents instinctively know this, and do their best to improve re-election chances by boosting the economy wherever possible.  This year is no exception, and, if you are in the market to move, it's a great chance for you to do so.

Greater New Haven has also been featured as a region where renting is more expensive than owning, so there's another reason to become a homeowner.  Why pay rents that are higher than in some other places, due to the number of students on top of regular demand, when you could own for a lower monthly outlay?

Not convinced yet?  If you think you might be working from home in the foreseeable future, this is the time to make sure that you have a comfortable place to live and to work.  Demand is high, and supply is low, but our prices are still lower than many other metro areas, and have not really gone up in many years.  While they are rising now, you still can get into the market before you get priced out.

You don't have to be a millennial to buy, and to buy now, so the reasons above apply to all age groups.  While younger buyers are looking to leave cities, start families, and build equity, there are plenty of factors to cause everyone to start searching.  Happy hunting!

Move Up and On

Recently, we sent out a chart to our agents of interest rates by the decade.  Rounding off, they are now about half of what they were in the 70s and 90s, and a third of what was common in the 80s.  Given another chart, showing how long people have stayed in their homes before moving, it's worth pointing out again how much of a difference in the true cost of a home the mortgage rate can make.

Many boomers I know are chagrined to find that, even if their downsized home is actually smaller than the home they left (and you would be surprised to find how often it is not!), they almost always spend just as much buying the new home.  However, rates are still so low that we should think of it as buying "up" at a great cost, in much the same way that we might spring for Premium Economy or Business Class on a plane, if the differential is very reasonable.

While spending more on finishes and extras is a luxury, it will eventually increase the resale value if you make a home modern in the way that buyers down the road will expect.  That won't work if it's too personalized, but many currently trending add ons are well worth the price, and, at these interest rates, may not cost as much as they would have cost in a different decade.

So, the message?  Move up and move on.  Buy what you can afford, and don't forget what you are saving in interest costs, as well as common savings on landscaping, gas (being closer in toward a town center saves money and time), and utilities (modern appliances save energy).  Think of it as Business Class at a Premium Economy fare rate, and go for it!

No More Seasonal Rules

I've blogged before about how similar the Madison, Wisconsin market often seems to be to the Greater New Haven area, and so I await with interest my friend Dave Stark's musings on his region. Like those of us in other places, he seems to have given up on predicting using the usual rules.  He's been up and down, month by month, and not following the seasonal patterns we've all come to expect.  Although our months don't track exactly with his, we also have seen several years of ups and downs that don't seem to match the weather, the school calendar, or the interest rates.  Our summer has been busier, but who knows what fall will bring?

That leads me to Dave's advice to buyers and sellers, which I heartily endorse.  He points out that sellers, just as they have here, have been getting very high ratios of listing to sales prices.  However, we should consider that many people are more reasonable than they once were, so prices are higher in some areas, but not climbing in many parts of our market.  Therefore, with low inventories, sellers are doing well, but only with good prices, as seen by buyers.  They are additionally helped by more millennial buyers coming into homeownership for the first time.

Buyers have been helped by interest rates that keep failing to climb as we all expected.  Even normal seasonal shifts have not been easy to predict.  It does keep us all saying, though, that buying while rates are low--and who knows how long that will be--is key to getting the home you want at the monthly payment you can afford.  Therefore, we would all advise buyers to get into the game, as soon as is possible.

Whether it's Wisconsin or Connecticut, you'll have to check back to see whether things turned out the way we expected.  We can all agree that predictions are harder to make than ever!

Why Are We Seeing These Market Conditions?

It's always dangerous to postulate about why certain market conditions exist, but I think I'll take a crack at it, since it's been going on for some months now.  To begin with, our market has been lagging behind nearly every other market in the country, and that's been happening for years.  At some point, we all knew that Connecticut would get lifted, at least to some extent, by the rising tide that's been lifting other boats, so to speak.

We also know from history that activity ramps up when interest rates rise.  Although this seems counter-intuitive, it occurs because people don't believe that rates will ever rise until they start doing so.  It's probably really more like a hope that they will continue to go down, than the real sense that buyers are ignoring the bottom of the curve.  Plus, they think, and they are correct, that 4% on the way up is the same as 4% on the way down, so it won't matter if they wait.  We in the industry put this more in the category of bottom-fishing:  Everyone is hoping to be the one who got a mortgage for the lowest interest rate possible.

Experts have been talking about the lack of supply for a few years now, which is what has caused spikes in prices and decreases in days on the market in other places.  Part of that is because of the lack of new supply, and that was more acute in Connecticut, because of our poorer economy.  Now it's true here as well.  The years of a bad market have caused sellers to hesitate before selling, and buyers now face a dearth of choices in many areas and price ranges.  This is particularly true at the lowest price points, where first-time homebuyers are competing with each other for the homes that have come on the market.  Many sellers also wait for spring before listing, and this year's snow (even today's snow!) made that more likely.  Buyers in our region tend to want to buy sooner than sellers want to sell.

Employment is also tightening, which is driving up wages.  That means that more people can afford to buy a home, and that those who already own homes can afford to trade up more easily.  Rising wages also increase the consumer confidence index, which I have long found to be a very important predictor of real estate activity.  In turn, that makes buyers think that they can stretch further to purchase, because they believe that their wages will continue to rise.  They may be right about that, and there are many reasons for that to be so--one is that there are fewer undocumented aliens and immigrants filling those jobs out there.  Another is that the baby boomers are hitting retirement age.

The new tax rules are so complicated for many taxpayers that, in a funny way, they may be helping also.  Since it's hard to know what effect the new provisions will have on any given individual or family, some are choosing to buy now, especially since this year's taxes were not affected.

Other reasons may also exist, but the ones above seem to be driving the market, despite the old saws of bad weather and wrong season, which have not held true this winter in our area.  Let's hope that the standard spring market kicks in anyway, and that our good fortune will continue throughout 2018!

Be Prepared to Jump

One of the toughest things for us to combat over the past few years has been the sense that buyers have had, that they can take all the time they want to, while making decisions.  It seemed to many that, not only would the same property be available, but that others that might be as good or better would come along all the time.  That made it difficult to put transactions together.

Now we seem to be joining the rest of the country in having low inventory.  In many price ranges, there simply isn't enough available to satisfy the demand.  This is particularly true at the first-time homebuyer price points.  In some places around the country, time on the market is measured in hours, or perhaps in days.  We're not used to that here, to say the least.

Buyers need to get ready to make decisions on homes that they see, before others make offers, or at the same time.  It helps to have a list of things that must be true about a new home you would buy, in order of how important each item is.  It's also really useful to rank each home as you see it, and, while remembering that nothing is perfect, to eliminate any that do not bump off any of your current top three choices.

Sometimes, it can be crucial to have someone on hand to evaluate changes or additions that you would require, and get a price right away.  Arranging inspections quickly can also give you an advantage, as well of course as a prequalification.  The most important factor, however, is your own willingness to pull the trigger.  More people regret not making an offer in time, than they do those that they make.

This is the point at which I come back to one of my favorite pieces of advice:  Bid the amount that you would be unhappy to hear that it sold for, to someone else.  That's your true estimate of the property's value to you.  And be prepared to come to that number in relatively short order.  That's becoming more important every day in our current market.

Should I Wait Until Next Year To Buy? Or Buy Now?

Article is from the KCM Blog, click here to view on their website

 



 

 

Some Highlights:

• The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
• Freddie Mac predicts interest rates to rise to 5.1% by 2019.
• CoreLogic predicts home prices to appreciate by 4.3% over the next 12 months.
• If you are ready and willing to buy your dream home, find out if you are able to!





Connecticut vs.the Country

Reading the national news, we get a lot of news about real estate in other places, where the biggest obstacle is lack of inventory.  That, obviously, pushes prices up, since demand then exceeds supply. This has now been going on for so long that the market has begun to cool off in some of the places that were strongest, including metro NYC.

Despite our proximity to New York, we in Connecticut have fallen way behind the curve. We're not growing, in jobs, in income, in housing, or in really anything much these days.  Therefore, our demand is lower, so our supply is higher, and prices have been going down for the past year; there's almost nowhere else in the country where this is true.

Good news, however, came yesterday!  Our prices for housing went up last month, after twelve straight months of decline.  Sometimes it's good to be behind the curve, because the curve can bend, and we are still catching up. Some of this is household formation, which is bound to occur as the millennials settle down.  Some of it is pent-up demand, from renters who are seeing their rental costs rising quickly (and more quickly than in most states, since our supply has been very low, and we have lots of students to use it up), and from investors, who see this region as affordable, compared particularly to New York and Boston.

Let's expect that our growth will continue for some time to come, since rates are still low, and prices have a long way to rise.  Our building permits are down, so the supply of housing (except on the rental side), shouldn't be increasing much in the near future.  It's time for us to join the party!

Sometimes It's Good to Lag the Market

In many parts of the country, real estate has fully recovered from the Great Recession, has increased in price, and is levelling off.  Inventory is a problem, because demand in many areas has been greater than supply.

 Not so for Connecticut.  Our poor business climate and high taxes has caused us to underperform everywhere else.  That means that we have yet to see any price increases, and our inventory remains higher than in other places.  And what does that mean?  It means that buying here makes more sense than it does in almost anyplace else in the country, because we share the same low interest rates, without the appreciation that would make housing prices higher than they were a few years ago.  We are still recovering from the downturn, and our jobs did not return in the same categories nor at the same rate as in other states.  That puts us in a different phase of the housing cycle, and makes us expect that this year will be strong. 

Certainly the weather is helping!  It's over 60 degrees today, and it already feels like spring.  So what does spring mean to us?  It's time to buy!

Happy New Year!

We in real estate are looking forward to a very happy 2016, for several reasons. First of all, it may sound counterintuitive, but having the Fed raise rates slightly is almost always good for business. People just don't seem to take the threat of higher mortgage rates seriously, until they actually begin to go up. That tends to make buyers much more motivated to buy in the short run, as opposed to what they have been doing, which is a lot of looking, waiting, and looking some more.

Another sign of hope is the lack of inventory in some price ranges, and the number of first-time homebuyers out there. As millennials marry and have children, they (often with the help of their parents) will buy homes. Up until now, they've been happy renters. In our area, the math clearly suggests that buying is better. Soon, a new generation will agree.

Locally, we can probably thank GE, but the Governor has definitely gotten the message that residents have choices about where to live, and they have been voting with their feet. The attention on our loss of population, jobs, and allure is getting our state to the point where it feels it needs to respond. And, if it does, more renters who own property elsewhere may buy here, also or instead.

All of these factors make me optimistic for 2016, but, in order for me to be correct, many of you have to agree. Here's hoping that you do!