Real Estate Closings in Greater New Haven vs. Last Year

We are in uncharted territory, as commentators remind us every day on every subject.  None of us knew what would happen to the real estate market during the pandemic.  At the beginning in Connecticut, the visits and offers really slowed down, but closings sped up--there was a big effort on the part of all parties to get things closed before the State shut down.  March was very busy on that metric, compared to other years.

When closings are charted week by week, results are only so useful, because one week versus another can be very random.  However, we can tell over the past four months that people adapted to the new normal.  After the initial bump, there was a big dip, which was followed by ups and downs throughout the period.  In general, the higher the price range, the better the closings held up. At most of the higher price levels, this year's closings exceeded those of last year during the past four months.That would be consistent with the observations and speculations that suggest that great numbers of NewYorkers are buying residential property in Connecticut, as our real estate seems very inexpensive to them.

While overall that is true, New Haven County supposedly did not get a bump from New York, nor did New London.  Anecdotally, we do believe that people are looking in our area.  If that's combined with the very short supply of listings, it makes for a vibrant market, and one far better than we expected for this spring.  And we expect that to continue, at least until (and unless) there is a second wave in the fall.  Anything that creates a sense of time pressure, be it weather, interest rates, or the possibility of further lockdown, will improve the market in the short run.  One of the biggest problems of the past decade was the sense on the part of buyers that they could take all the time that they wanted to decide, and that, as on Tinder, new choices would continue to appear, while previous ones would remain available.

Now that we know that's not true anymore, buyers are more serious.  When you add the fact that looking today is not without risk to health, there are many fewer idle lookers.  That has turned out to be a big boon for our industry; since we don't get paid for our time, we love any reason for buyers to be driven to contract faster.  Some want to sell and move while they can, while others are motivated to be in someplace where they can nest and telecommute in any future virus waves.  Those buyers also seek lower density, and value outside space, which helps us here as well.

So, in the main, we have adjusted to a new way of doing business quite well.  Market conditions were favorable for keeping sales up, and our region, with its concentration in higher ed and medicine, is fairly protected from the broader economic issues facing the whole country. Those relocating here from other parts of the world had already accepted offers, which were honored, so they needed to move. Our low prices attracted investors, too.  All in all, a good report for real estate prices and activity in Greater New Haven.



We're Turning 60!

This week is Pearce Real Estate's 60th anniversary, and we're celebrating!  My father founded the company in 1958, after a 20-plus year career at the A.C. Gilbert toy company (now turned into artists' studios on Peck Street in New Haven).  Perhaps selling erector sets made him long to sell real buildings, and, early in his career, he actually sold the Gilbert building, after the company was downsized and sold.

Our original location, on State Street in North Haven, has been doubled twice, and we are still headquartered in that building today.  Over the years, we spread our territory, first to the Shoreline, and then to other commercial locations in Greater Hartford and in Milford, but we always have maintained our core principles of local independent real estate expertise and community service.  All eight offices today are filled with dedicated professionals who pride themselves on knowledge and integrity.

We'd like to think that we have indeed made Connecticut better over our 60 years in business.  In addition to providing thousands of hours of human service, and millions of dollars, to all kinds of non-profit organizations around the State, we have changed its landscape.  We have developed housing around the Greater New Haven region for most of that period.  With Don Lippincott, my father developed first an industrial park at Exit 10, and then what became in effect a regional mall at Exit 9.  The latter involved building a road and bridge, which is now called the Herbert H. Pearce and Donald B. Lippincott Commemorative Bridge, and leads to Home Depot, Target, and many other destinations.

His capstone project was New Haven's first mixed-use development, known as Whitney Grove Square.  It has shopping, office, residential, and parking at one location, with a bigger garage across the street. It was instrumental in moving people up from the Green to Whitney Avenue and Grove Street.  Buyers lined up through the night to buy the condos when they went on sale in 1986.  Many residents of the region now live in the heart of downtown New Haven, but it was unusual at the time.

We're proud of history, and of the perseverance that it has taken to survive and thrive for all of those 60 years.  We're prouder still of our associates, current and retired, who allowed us to do so.  And we are grateful most of all to the thousands of clients who have entrusted us with their sales, purchases, and rentals, for decades, and often for generations of the same families and corporations.  We look forward to the future, and know that it will be bright.

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 New Haven you can say “If market conditions do not change and if no new listings come on the market it will take 6.1 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.”



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 Branford you can say “If market conditions do not change and if no new listings come on the market it will take 7.3 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.”

Spring Came Early this Weekend!

Weather has always played a big role in the cycle of residential real estate throughout the year.  I heard a group of broker/owners from around the country talk about January's results last week, and they varied in their responses from "up 40% over last January" to "down 20%, with prices lower".  Many of them prefaced their answers by comparing the weather last year to that of the past few weeks, since we know that snow, in particular, has a chilling effect (pun intended!) on showings and sales.  Weather like we had this past weekend, on the other hand, makes buyers think about spring, and gets them out and moving on the purchase process.

In addition to warm temperatures, we had bright sunshine.  Many, if not most, places look better in sunlight than they do on a gray, dreary day.  Also, since we know that people's moods are cheerier in lighter, brighter weather, they may just perceive something as better on a nicer day.  Whatever the reason, there is a noticeable effect on the market when the weather improves.  Sellers should bear that in mind.  We know that most sellers wish that they had started preparing for sale sooner; given that, they should, at this point in the year, weigh getting on the market before the crush of new listings versus being in better shape for sale.  That's a conversation to have with an agent, because it depends upon--as with everything in real estate--location.  It also depends upon supply and demand, as you would expect, and on price range. 

Since sunny days also make it easier to clean up, clean out, and refresh a property, we hope that potential sellers spent the past few days getting ready for the spring market (see previous column on decluttering).  When spring comes on the calendar, it always behooves you to be prepared.  The price you get could be affected, plus sellers often want to purchase new property themselves, so selling early is always helpful.  If the past few days made it feel like spring to you, we hope that you jumped on that feeling!

Flash Sale on Homes

The phenomenon of the flash sale is relatively new, but the concept is not--it's a sale promoted quickly, and without much warning, designed to create a sense of urgency, as it will only last a limited time.  Well, that happens every year in real estate!  Every year, I remind buyers that the best time to buy a home is between Halloween and Thanksgiving.  Sellers are thinking about heating and snowplowing through the winter, and both buyers and sellers want to start off the new year with a major financial transaction finished. 

In addition to the time of year, buyers should be motivated by the fact that interest rates are usually at their lowest point right around Election Day, and this is especially true in a presidential election year.  Whether it's uncertainty on the part of some, or a subconscious desire to help the party in power make the economy look good, the end result is the same--savings that will last every month for the life of the mortgage.

In New England, it's also a time of year before ice and snow make showings and open houses difficult, as well as a breather before the holiday rush sets in.  For all these reasons and more, it's the best time of year to buy.  And it doesn't last long.  So let's call it a flash sale, and let the buying begin!

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 Milford you can say “If market conditions do not change and if no new listings come on the market it will take 6.4 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.”

Absorption Rates

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