10,000 People Change Their Addresses to Connecticut

It's so nice to be popular!  Poor Connecticut, which has been lagging in most economic measures over the past decade, has now come out on top in two recent metrics:  It's the most improved state for COVID in a recent statistical analysis; and its population is on the way up, with 10,000 New Yorkers joining the ranks of the Nutmeg State.  

Our little state packs a big wallop, when it comes to outdoor space, forested land, beaches, and low density in most places.  We also enjoy, of course, easy access to the greater NYC metro area.  Those factors have combined to make this at least a temporary home to many displaced New Yorkers.  They are looking at, renting, and buying property in most counties.  All of us in real estate can feel the activity, and we are also noticing all the New York license plates on the roads.  Inventory of listed properties is very low, and multiple offers are evident at many price points.

Not only is this a great place to live, but we also seem to have done an excellent job in bringing down the rate of infection for the coronavirus.  This adds to the feeling of safety and serenity that is making people snap up our property.  After a long, quarantined spring, it's nice to think that all the hibernating paid off.  

And brought us an economic boost as well.  Every real estate transaction has a multiplier effect on the economy, and will help to make up for the slow second quarter.  In fact, although we are expecting a slow summer for tourism, maybe that's because the tourists have decided to move here,  instead of just visiting.  That bodes well for the value of our homes, our commercial property, and our tax base. So, whether you are thinking about becoming a Nutmegger, or just renting a place for the season, welcome!

Calling All Investors

Last week, I was in D.C. for the National Association of Realtors meeting, and there was a lot of talk about millennials and what they want and value.  What they want are dwellings that are open floor plan and completely updated--no fixer-uppers for this generation!  What they don't value like their parents and grandparents did is home ownership, although that could change, as they (belatedly) form households and have children.

That leads us to examine another growing trend across the country--single family homes as real estate investments.  Millions of homes are now owned by individuals, not institutions, for investment purposes, and are rented out.  Millennials are a prime target group for this activity.  It's not enough to buy the home, however; you need to update it, and make it into something that a renter wants to pay to live in.  

Where in our market do such opportunities exist?  Ahh, that's where you need to call a Realtor, since we know the latest sales, and which neighborhoods are hot and which are not, what features need to be added, and where renters want to live.  Flippers, give us a call.  We'll be waiting with advice.  

Don't Just Invest, Enjoy Your Investment

Many of you have probably been reading all the dire news about the real estate market lately. It was the worst July in 15 years, and the outlook for the rest of the year isn't great. I think we can safely say that those of us in the business already knew that, just by the lack of calls, sales, and closings. The articles in the papers aren't helping, either. They keep telling people that houses are no longer safe investments, guaranteed to go up each year and to outpace inflation.

But, really, what's so bad about that? Your home should be a place that you enjoy living in, and where you are happy to be without regard to appreciation. Over time, no investment goes up steadily; even ones which are extremely risk-averse do poorly when inflation is high. I recently had a friend tell me about his fancy new wine cellar. He is building it to display his 297 bottles of wine, most of which were bought as investments, after careful research. My friend knows exactly what they are now worth--just over double what he paid for them. As we laughed about his knowledge of the wine collection's appreciation, he downplayed the investment value. After all, he told us, even if their value goes to zero, they will still be available to drink and enjoy!

And what about a similar view for real estate? It's always been true that homes should be bought for more than their investment value, and buyers have always been aware that they shouldn't buy if they might have to sell right away. Although it's not quite the same as the fact that a new car loses its greatest amount of value just as it's driven off the lot, the costs of reselling property mean that there has to be some increase in price just in order to break even on a resale. What it seems that we've all been forgetting lately is the consumption value of living in your investment, and enjoying it in the short run. So try to think of real estate as a consumer good, which you can enjoy and use; while you are at it, maybe you should lay away some bottles of wine as a hedge for your bet!