Differing Reports on CT Real Estate

We get periodic updates from various sources concerning the state of the real estate market in Connecticut.  The latest two that I've read say exactly opposite things.  One said that units are way up, but prices are down.  The other said that prices are way up, but that units are down.

Could both those findings be true?  It doesn't seem likely, but it does show that the market in our area is in transition, and that it isn't all one condition everywhere.  What it most likely means is that there is a lot of interest from first-time homebuyers on the lower end of the price range, so that those prices may be rising.  Once you get to a certain price point, which varies by region, the results show that there are caps on neighborhoods, meaning that homes don't sell above a given price, regardless of quality or size.  Therefore, we can still see downward trends, particularly in the upper brackets.

There are also discrepancies in similar reports, depending on exactly what they measure, and over what time periods.  For us at Pearce, this winter was remarkably good, despite the weather.  We see a lot of "Yale effect", so that our offices are busy when Yale puts out its offers for the following year.  A more traditional pattern of spring-summer sales exists in other locations.

 I guess the real point is that you can say anything at all, and find the statistics that will back you up!  We do know, however, that when the market is changing, it is probably going up.  Downturns tend to be more sudden, and often involve dead stops.  So, if you want to bet one way or the other, I'd say that the market is one in which buyers should move, and sellers should stay flexible.

New Year, No More Fiscal Cliff

The page has turned to 2013, and everything seems to be pointing toward a continuation of the slow recovery that we've been seeing so far.  In other parts of the country, things have moved faster, and the signs are even clearer.  I just came back from Phoenix, and I remember reporting in other years that there were For Sale signs all over the place.  This year, in the same complex, I saw two, and one was sold and came down while we were there.

Connecticut has a bigger supply of properties for sale.  Things never got as bad, prices never went down as far, and therefore they are not popping back up as quickly.  We still have spots where listings are hard to come by, but, by and large, there is a good choice for buyers in most areas.  However, that could change as the year goes on.  Interest rates are still low-very low-and prices are more flexible than usual.  People who are moving here have been able to sell their homes where they came from, and, with the lowest apartment vacancy rate in the country, the New Haven area is a tough place to land a good rental.  All those things cause sales.

In addition, the uncertainty in Washington has not gone away, but the immediate crisis has been averted.  Some nervousness still exists, which makes the stock market dicier than usual, and that also helps real estate as an alternative investment.  We are between two strong markets-Boston and New York-so that should help us as well. 

Spring will tell more of the story.  Will prices start to shoot up?  If you are a buyer, you may not want to wait and see!

Playing the Odds

We were doing some research this week, and were startled to discover that, from January 2010 through the present date, only one-third of all listings taken have sold.  That means that, for every seller who put his or her home on the market and sold it, two sellers put their homes on and nothing happened.  If you add those people who haven't bothered to list their properties due to the poor selling climate, there is a big supply out there. 

Since real estate agents work solely on commission, this is obviously a troubling state of affairs.  We only get paid one out of every three times we list a home, and listing always used to be the guaranteed way to make money, since the percentage of buyers who look and don't buy is higher than that of sellers who don't sell.  The combination is deadly.

 It does prove, however, that sellers should be listening to their agents about the price and improvements necessary to attract an offer in today's market.  What's the point of cleaning everything up and making plans to move, only to sit there for two years without a sale?  If you do want to sell, you need to do more than just sign a listing--you actually need to have a property in the top third of all properties, in order to sell it.  That's food for thought.