What's News in Real Estate — Connecticut Market Watch 3rd Quarter 2011

Most people are wondering how the real estate market is doing and when are we going to hear some positive news? Well here I am to shed a little bit of good news!  

Residential real estate in Connecticut continues to slowly improve in 2011 despite our struggling economy, along with all the negative national news we read and hear every day. Our local real estate market continues to perform at levels that indicate a slow, but recovering housing market! Homes are selling in our area! 

In fact, looking specifically at Fairfield County sales improved significantly — 2011 third quarter pending home sales showed an improvement of 21% over third quarter pending home sales in 2010, and 27% higher than the third quarter of 2009. In Fairfield Country, closed sales improved 15% vs. 2010. With each quarter, sales are improving and it is expected that at the end of 2011 sales will fall in line with 2010 and ahead of 2009, which will represent the bottom of our local market! 

This has been an especially noteworthy quarter as our market is holding its own in 2011 without any artificial stimulus packages that many people had benefited from in 2010; with our nation’s crisis of consumer confidence tht was questioned in August-September; Tropical Storm Irene, which reaped havoc on many area homes. One of the most significant developments in the third quarter of this year was the increase of condominium sales. The condo market has been an especially challenging market over the last couple of years, where there were little to no sales. This new development is primarily due to the strengthening of the single family home market.

Having said all that, and while the number of pending home sales have definitely increased, the still-ever-haunting lack of consumer confidence continues to be the main factor as to why home sale prices have not seen an increase and prices are, in fact, still seeing some downward turn in most of our areas. The median sales price for Brookfield for the third quarter 2010 was $395,000 vs. the median sales price for the third quarter 2011 is now $374,000 — percent change -5%.  Overall closed sales in Fairfield Country — YTD 2010-2011 — on homes selling up to $799k fell 9%, with the median selling price of $458,000 which represents an actual 2% increase from last year, but with a perceived increase of 9% due to the higher priced home sales in towns such as Wilton, Westport and Ridgefield for example. 

There are definitely some challenges when it comes to financing, but we do know that banks are lending! It may be a little more difficult, or they may require a little more documentation, but that’s OK! That is the way it should be — not everyone can or should qualify for a mortgage to purchase a home. 

Interest rates are at a historic low — did you ever think that interest rates would fall under 4%? Currently, the average 30-year fixed rate is now at 3.99% with an average of 0.7 points according to the Freddie Mac mortgage survey. Lower interest rates make mortgage payments more affordable. For example, when interest rates were at 6%, the average monthly payment on a $400,000 home with a $320,000 mortgage was $1,918 per month excluding taxes and insurance. But now, the same payment is 25% lower, around $1,526 per month. Wow!

As our market continues to slowly improve here in Connecticut, and as you are listening to the “national news” please keep in mind one thing — it is “national news,” and while our economy is still suffering with the lack of consumer confidence in all areas of the United States, Fairfield County, the Shoreline and Litchfield Country are in much better shape than in most other areas.

Opportunity knocks... don’t be afraid to answer! With interest rates historically low and inventory high, there is no better time to purchase a home than now. Whether you are a first time home buyer, investor or someone who is looking to up-size or downsize, there are many beautiful homes out there to choose from. We don’t know where the market will be next year — home prices or interest rates — but what we do know is where we are NOW!  Boy, if we only had a crystal ball to figure out the future and know what next year would bring, I would bottle that one up and sell it to the highest bidder — no, actually I don’t know that I would consider selling that one!

As a seller who is looking to upsize or downsize, try not to focus so much on your bottom line sale price because you will be able to enjoy purchasing a home at a lower price point as on the other side. We all want our cake and be able to eat it too, don’t we… but that’s not reality, is it? If you are taking out a mortgage, focus on your payment not the price. Think about it, with interest rates so low, buyers are able to afford “more house” for their money, but if interest rates go up, they will afford less. Focus on the payment not the purchase price — very important! 

And lastly, I would advise the seller that is planning to put their home on the market, and actually have the sale take place in a reasonable amount of time — price it well from the get-go! Buyers are very savvy these days, and want the “best house for the best price." While that would appear to be having your cake and eating it too scenario, the fact of the matter is, there is a lot of inventory out there for buyers to choose from, and if they don’t choose your house, they will choose a house that best suits “their” needs. So, pricing a home well and having it be in the “best show condition," is imperative in this market, or any market for that matter.

To view the entire Connecticut Market Watch Report, click on the following link: View the 3rd Quarter 2011 Market Watch.

Just a bit about “us”…

Being in the real estate business now for almost nine years myself, and along with my partner Laurie Levitt, we have 21 years of combined real estate experience. We have seen the “changing markets” and understand the difficulties that are faced for both buyers and sellers. We offer our clients the highest level of service as consultants and advisors. If you or someone you know has any real estate questions or concerns, Laurie and I are here to help you get the answers you need. Or, if you like, we offer a complimentary Qualified Market Analysis of your home if you are interested in knowing the value of your home as it pertains to our current market — just give us a call and we will be happy to do that for you!

In the meantime, we look forward to the opportunity in helping you to Unlock Your Dreams!

Laura & Laurie — Your Key Real Estate Team

Contact Laura Cruger @ 203-948-1103 or Laurie Levitt @ 203-733-1393. Visit our website at crugerandlevitt.com.