October Contracts: Impact of the State Budget

2017-11-02 Hartford County Single Family Contracts in October 2017

Hartford County had 727 single-family homes deals come together during the month of October. The total was about 3% fewer than October 2016, though on a year-to-date basis the market is very slightly ahead of 2016.

Discussion of the State budget situation was unavoidable during October. It was regularly a leading news story, and was not fully resolved until the Governor signed a budget on Halloween. Budget talk seemed to come up all the time, in a way that made it plausible for the budget uncertainty to have a cooling effect on the regional real estate market. Now that the data is in, we can attempt to answer whether the State budget situation actually impacted buyer behavior.

Taking the widest possible view, a 3% variance from last year suggests that the budget debate wasn’t such a big deal. The chart at the top shows a tight cluster of October contract totals over the past three years. There was no huge miss for the month. Additionally, the chart shows that wild month-to-month swings are actually not unusual for the County. At a high level, there is no way to say that the uncertainty about the State budget definitely slowed the market in October.

There are trends with individual towns, many of them quite interesting. However, they are year-long trends rather than new and unique situations that popped up when the State budget took over the headlines.

One of the strongest trends is that buyers are showing a lot of interest in the core price bands of the more densely populated towns. The table below shows that East Hartford, Manchester, Bristol, Hartford, and Windsor Locks experienced year-to-date deal activity increases of more than 10%. Looking more deeply into the numbers, the increases were primarily due to an uptick in contracts on homes priced in the $100,000s. The October results for those five towns ranged from a 112% increase in the number of month-over-month deals to an 18% decrease. Again, it is not possible to reach a definitive conclusion about the impact of the State budget standoff.

The narrowest view of the impact of the State budget uncertainty comes from conversations with individuals interested in real estate. Numerous home shoppers that I interacted with over the past month independently raised the State budget as a concern. I had multiple guests at a Hartford open house tell me they that lived in West Hartford and were concerned about buying a larger home in West Hartford because of the potential for even more property taxes if the State cut education funding to the town (as was proposed at one point by the Governor). My own buyer clients noted the budget standoff as a concern, though they did not tie it to any specific decisions. Agents in my office reported conversations about the State budget with their clients too.

At the end of the day, it is important to recognize that all sorts of factors impact the real estate markets. The State budget was the primary talking point in October. It was definitely on people’s minds, and influenced their decisions. However, there is no convincing statistical evidence (that we’ve seen) that those individual decisions caused October to be an unusual month in the noisy world of real estate.

It is interesting though … I wonder what everyone will be talking about in November?

2017-11-02 Hartford County Single Family Contracts in October 2017 by Town

September Contracts: A Tentative Return

2017-10-02 Hartford County Single Family Contracts in September 2017

Hartford County finished September with 739 single-family home contracts, in line with the September 2016 result. On a year-to-date basis, 2017 is about 1% ahead of 2016 in terms of the total number of deals.

This month our series on contract data tentatively returns. The local MLS system still does not allow the method of data gathering that we have been doing since 2009, but tech support helped us find a workaround. It is more difficult to collect the information, but we believe it is comparable to our previous process. We will scrutinize the results each month for the rest of the year to make sure the data continues to look correct.

Although we feel good about the accuracy of the September data point, we believe that the August numbers are understated. August results were re-collected yesterday using the new collection process. Measuring the number of contracts at the same time each month, shortly after month end, is important because deals tend to fall apart over time. For every 100 contracts in place at the end of the month, there might only be 95 (hypothetically) in which the buyer and seller are still working together 30 days later. Because the August number shown in the top chart was collected in early October, it is very likely that the August total would have been higher if it had been collected in early September.

With the disclaimers out of the way, it is good to be able to look at market activity again in near real time. Deal counts have been falling over the past two months, as is typical of late summer. Hopefully there will be a small uptick in activity during October as the fall market kicks in. At the big picture level, 2017 has been a strong year for the local real estate markets.

Trends by price band show a slight increase in deals in the $100,000s, the $200,000s, and the $300,000s. Those three price bands represent over 79% of the single-family contracts in Hartford County, showing that there is strength at price points representing our core housing stock.

Inventory levels continue to be neutral below $400,000, and then increase to favor buyers as the price point rises. At the extreme end of the price spectrum, there has been a decrease in the number of million dollar homes that have gone under contract this year compared to last year. There are so many million dollar homes on the market that it would take over 2 years to sell them all at the recent pace of deals. It continues to be a good time to be a high end buyer in Greater Hartford.

2017-10-02 Hartford County Single Family Contracts in September 2017 by Town

Including Commute Time in the Home Search

Connecticut realtors recently upgraded the software we use to access our MLS database. The primary improvement was a modernization of the site that our clients use to browse property matches. There were some behind-the-scenes changes that impact agents, but nothing particularly noteworthy.

While testing out the new system, I found the feature that searches by “Drive Time.” It allows us to create a search to find properties within a certain commuting distance. Specifically, I set the destination, the arrival time, and the drive time, and the system creates a shape that includes all the places that I could leave from considering typical traffic at that time of the day.

For example, here is the shape it creates when I tell it I want to have a 15 minute commute and arrive at the intersection of Main and Pearl in Downtown Hartford by 8:30 AM.

15 Min at 830

Along the Interstate 84 corridor you’re okay from the Park Road exit in West Hartford all the way out to the 384 interchange in Manchester. The 291 interchange is the northern-most limit, and the Route 3 interchange is the southern-most limit. The shape is definitely organized around highway access, as the northwest quadrant of the map shows a surprisingly short distance is within 15 minutes along Albany Avenue (Route 44).

What if we choose an arrival time that is outside of rush hour, say 2:00 PM? Driving in the early afternoon allows much more of the region to reach Downtown Hartford within 15 minutes.

15 Min at 1400

I’m still skeptical of the non-highway routes. I regularly drive Downtown from the Albany Avenue area and think that the map understates how many homes are within 15 minutes, especially during non-rush hour times.

Despite my one concern, the Drive Time feature is an interesting tool to be able to use when defining search criteria for buyers. Commute time is important when considering where to live, and this gives us a way to estimate distances that correspond to times.

Contracts: Data Unavailable

We have, unfortunately, suspended our monthly contracts series. We apologize for the inconvenience, and hope to restart it in the future.

If you’re interested in learning why we’ve had to suspend the series, then read on…

Our local MLS upgraded the software that agents use to access the MLS at the end of July. Although the new software is an improvement in a number of areas, it does not allow us to gather contract data in the same way as before.

The primary challenge is that the availability of database fields has been changing on a regular basis over the past month. The fields contain the correct data, but sometimes they are available to us, and other times they are not. The MLS tech team is fine-tuning the new system. There is one field in particular that we rely on for the Contracts search, which holds the date when each seller accepted an offer.

This particular field gets set when a property is moved to one of the many statuses in the database that signal the property is under contract. It is a required input for the listing agent.

Despite the field definitely having a value, the application agents use to access the database does not always show the value. And when the value is not visible, it is not searchable by the current application.

That the field is only visible in certain situations is actually not new, the same thing happened prior to the software upgrade. What is new, and what we’re struggling with, is that the previous versions would use the hidden field in collecting search results. We would search for the homes that went under contract during a month and some would show a contract date, while the others would not. This was fine since we didn’t care which specific date the home went under contract, just that it happened during the month.

What’s frustrating about the situation is that there is no reason to hide the data in this particular field. Agents can easily see when the property was moved to an “Under Contract” status in the listing itself. There is an entire display that shows the history of each property in the MLS. This is not sensitive information that needs to be protected. It’s already public, so it should be searchable.

We have formally requested that the MLS team make the contract field visible, and therefore searchable, to agents. Hopefully they will agree with our reasoning. If and when they do make the change, we will resume the monthly contracts posts. We find them useful for our work, and know that others are interested in the data too.

Thank you for your patience, and for your interest in a technical matter. We appreciate that you visit the site and follow along with the local real estate markets.

40 Ashley Street, Hartford

40 Ashley

Don’t miss a rare opportunity to own a historic brick single-family on Asylum Hill’s premier block.

This 1890s Victorian home welcomes you with a full width front porch featuring intricate wood details. The foyer retains the original newel post and banister, and opens to a living room with wood burning fireplace. Beyond the living room is a very large space that was originally the dining room, but is currently used as a family room. The oversized eat-in kitchen is divided into the cooking area and the seating area. A powder room completes the main level.

Upstairs, the home has five bedrooms and one full bath. Three of the bedrooms are on the second level, and the final two are on the third level. All the bedrooms are spacious, and the home has good closet space throughout.

Behind the kitchen is a wood deck that is perfect for a grill and relaxing. A brick three bay garage is at the rear of the lot, though currently not in use, with an attached shed on the side. The home has gas heat and the roof was replaced in 2016.

The property is being sold AS IS. 40 Ashley is a terrific opportunity to own a piece of Hartford history and make it your own!

40 Ashley Street has 5 bedrooms, 1.1 baths, and 2,388 sqft. The home is offered for $140,000. If you’d like to see this home, please have your agent arrange a showing, or call Kyle at 860-655-2922 to schedule a visit. More details and a photo tour are available.