Hartford's Buyers' Market

Hartford is currently listed number 9 in the list of the best markets in the country for buyers.  To put that in perspective, Phoenix is listed as one of the hottest sellers' markets.  So what do they really mean?

The people who compile these lists rate as a buyers' market anywhere where prices are not rising, where homes sell below the asking price, and where the median home in on the market longer before selling.  Now think about what that could mean.  In Phoenix, where everyone knows that there are tons of short sales and there was a huge oversupply of homes built, with declining values and high rates of foreclosure, sellers are very realistic.  They may even expect to lose money.  Also, many people have seasonal homes there, in which they are less emotionally invested, and may just be willing to dump them to be done with things.  They may rate outside advice more strongly, since they may not be Phoenix natives.  And they know that they are competing with banks and corporations as non-emotional sellers.

Now compare that to the Hartford area.  Most homes are primary homes, with owners living in them and feeling strongly about their value.  There was not a great deal of building down in the prior decade, nor were there daily articles in national news media about the poor market and the high foreclosure rate.  Most foreclosures, since Connecticut is a law state (meaning that you must go through the legal system to foreclose), are still in the works.  Finally, prices went up in the past decade and a half, but not like they did in the Sunbelt, where jobs were growing and the economy was expanding.

Then, add in the factor that every home is different, so its value is subjective, and it is not a commodity (although it may have gotten close in the Southwest).  It's not like buying a Honda here versus in Arizona; you are not comparing apples to apples.

However, numbers don't lie.  Sellers here have not been as willing to drop prices or make concessions, so their homes have not sold.  Buyers have chosen to rent and wait for values to bottom out.  Also, they have probably been less inclined to put their homes on the market for what they are truly worth, since they are still hoping to get out whole, and, often, to buy another home.

When will things change?  Either the market will get much better, and, like a rising tide, raise all boats, or prices will come down until those homes that have rusty For Sale signs out front are all gone.  But it does seem like a stretch to say that sellers are better off in Phoenix than in Hartford, overall.  Like much of life, it's just not black and white.

Lowest Rates in 60 Years!

Remember this time, folks, because you won't see it again in your lifetime.  CHFA rates are at 3.625% for a 30-year fixed rate mortgage.  Compare that to when I bought my first home--my state-subsidized first-time homebuyers rate in 1982 was 17.75%!  Mortgage rates are the lowest they have been in 60 years.

If you add that to the fact that homes are down 5% in price, with vacation homes down 11% in price, this is a great time to buy.  Counterintuitively for many people, the period after a hurricane is an excellent time to buy property on the shoreline.  Just as with the spring after a bad winter, people often get spooked and decide that it's time to decamp for a condo or assisted living, and they are willing to be reasonable about their price.  If you add that to the discount that waterfront property often goes for in the fall, as well as the general rule that the best time to make an offer is between Halloween and Thanksgiving, everyone should be out scouting right now! 

Do you really trust the stock market more than the real estate market?