Archive for March, 2008
West Hartford Real Estate Market Report
Interested in selling or buying a house or condo in West Hartford? Here is the latest market data as of today…
Average Days on Market for a single family home in West Hartford is 61 days, as of today.
If you’re a seller in the price range of $351K-$400K, you don’t have much competition. If you’re a buyer in this price range, be ready to see houses as soon as they come on the market. They probably won’t be around long…
If you’re a seller in the price range of $200K-$300K, you have quite a bit of competition, 42% of the market. Price well and be ready for aggressive offers!
Average Days on Market for a condo in West Hartford is 95 days, as of today. Take this with a grain of salt though because new construction condo closings will skew this number upwards.
The Thrill of the Chase?
When the real estate market slows and inventory grows, setting the listing price of a home becomes critically important. “Chasing the market” is a situation no homeowner wants to be in, but many set themselves up for this everyday.
Think about it. People hire real estate agents to help them price, market, and sell their homes. Why is it that so many homeowners disregard their agent’s pricing advice, which is based on hard sales data, and determine their own value of the home? The homeowner’s value is usually based on “gut feel” rather than real data and current competition.
Is it emotional attachment?
Is it distrust for the agent?
Is it greed?
I’m guessing it’s a combination of all three reasons (plus maybe a few more). But if homeowners could understand the value they are actually losing by ignoring pricing advice, maybe they would think twice before overpricing.
So, let’s look at a telling example of Chasing the Market that recently occurred in West Hartford.
The owner ended up doing 6 price reductions before their house sold!
This house was on the market for slightly more than 9 months and sold for 72.8% of it’s original list price. The average sale-to-list price ratio for West Hartford’s 2007 real estate market was 97.2%.
My best estimate of where this house should have started was $310,000. It was approximately $40,000 overpriced from the start. If the house sold at 97.2% of its asking price, West Hartford’s average, it would have closed at $301,320. Effectively, this homeowner lost $46,320 because they chose to overprice and ended up chasing the market.
Add to this the constant annoyance of having their house shown for 8 months with no offer and the emotional distress of wondering why no one wanted to buy their house. Ugh.
Moral of the story: Trust your agent’s advice when they present you with sales data from truly comparable homes. If you don’t trust your agent’s advice, talk to a few others. Their prices should triangulate within a reasonable range. From there, the emotion will be taken out of your decision and you’ll truly know where to start.
Condo Commission Needed in CT?
Earlier this week, AG Richard Blumenthal asked state legislators to form a review board that would deal with condo association complaints. Apparently, Blumenthal’s office has received hundreds of complaints from condo owners across the state that claim their association’s governing boards are blatantly violating state laws or their association’s bylaws. The board would be used to act as a mediator between condo unit owners and condo association officials.
The Courant’s Consumer Watchdog put in his $.02 today and supports most of Blumenthal’s recommendations. He also offers a few ideas of his own, based on his condo ownership experiences.
The first recommendation would “Require real estate agents to be certified after passing tests before they can be involved in condo transactions.”
The Connecticut real estate licensing classes cover condo sales as a portion of the curriculum. Additionally, training and mentoring in offices serves to reinforce this education. I am a big advocate of training and education and I wish that the Watchdog would offer some more depth into the certification he would like to see.
The second recommendation would “require home inspectors to be trained for condo inspections, assuring that not only the individual unit is checked but some kind of inspection is conducted of common areas.”
This suggestion has me a little troubled because it indicates that home inspectors are not looking at the common areas of condo communities. When you hire a home inspector for your condo, they should throughly inspect the interior of your unit, as well as the common areas. This includes your heating and cooling system, electrical box, roof of the building, exterior condition of the building, along with other accessible areas. If the inspector needs access to the common heating and cooling systems, your real estate agent should be able to arrange this with the management company.
A few other tips for condo buyers…
1. Please, please, please actually read the condo documents that you are provided. By state law, you have 5 days to review the association documents, which should include a copy of the budget. If you determine that the association is not for you, you have the right to rescind your contract. Try to do as much due diligence beforehand, but realize that the condo review period is a safety net for you.
2. If you have questions about the condo documents, ask your attorney, real estate agent, and the condo board or management company for clarification. Assume nothing!
3. See if you can speak with some current owners in the condo community. How do they feel about the condo board’s administration? You can find home owners by asking the condo board for contacts or simply waiting outside the building and asking people as they walk in. Yes, it’s a little stalker-ish, but it’s no different than talking to neighbors if you were considering buying a single family home.
4. Determine if there are any special assessments that are due or will be due soon. Will the seller pay them before the closing? Speaking with a condo board member should reveal any imminent major maintenance plans. The current owner should also disclose any special assessments. Your real estate agent can and should help you with this, along with the other suggestions above.