Negotiated contracts on single-family homes in February 2011 were down about 24% from the year-previous monthly tally. We thought the market felt slow, and the numbers definitely support our anecdotal evidence.
Activity levels varied widely between towns. Avon came out of the month as the big winner with a sharp increase in contracts. At the other end of the spectrum, Enfield and Southington finished with less than half the market activity of last year.
The year-over-year comparisons are fun and dramatic, but we’re obligated to point out that it’s not an apples-to-apples sort of thing. Last year was different than “normal.” The Federal Home Buyer Tax Credit pulled the whole spring market forward into the first four months of the year (See the “Contracts Written by Month” chart at the bottom of this article). This year is more typical, with both buyers and sellers beginning to get into the real estate frame of mind over the President’s Day weekend.
The big story we see right now is low inventory levels. We are having trouble finding interesting homes to show our buyer clients. It’s an especially big problem in two of the markets we spend a lot of time in, Hartford’s West End and West Hartford. Owners out there considering a sale should seriously consider getting their home on the market. Call your trusted agent (preferably us) to get the process started.
The chart of towns is sorted by inventory levels this month. Newington retook the “Most Favorable Market for Sellers” crown after briefly ceding it to West Hartford. Hartland is disqualified because they only had 13 deals come together over the past 12 months, and only has 3 active listings right now. Nothing against Hartland, it’s just not an active enough market to take the stats too seriously.
After looking at the chart some more, it’s clear that there are plenty of houses for sale. Most of the towns have 6 to 9 months of inventory. The general rule of thumb is that more than 6 months of inventory is a buyer’s market.
I can think of two reasons why the inventory data isn’t completely matching up with what we’re seeing in the market. One is that everyone’s buyers seem to be looking for the same basic house. The other reason is that many of the available properties have been on the market for months or, in some cases, years. Buyers have seen these homes and ruled them out for one reason or another. Combine these two factors and we have a situation where there are bidding wars on hot new listings that come on the market. Perhaps not at the same price levels as we saw in 2007, but there is strong demand.
Still on the fence about whether or not to sell? Give us a call and we’ll be happy to sit down and talk through your specific situation. The buyers are out there, but the market needs sellers too.