New “Coming Soon” Rules for Spring Market

2019-02-04 New Coming Soon Rules

Have you ever seen properties advertised as “Coming Soon” either online or with a sign in the yard?

That type of pre-market promotion has been like the Wild West for agents.

Individual agents each handled it a little differently since there was no real guidance. There were many misunderstandings, and some questionable practices, as both agents and buyers struggled to understand what “Coming Soon” meant on a property-by-property basis.

Although most agents promoted their listings responsibly, enough complaints were registered that someone decided to step in and act as a regulator.

Beginning today (February 4, 2019) new rules issued by the local Multiple Listing Service regulate how MLS members (basically all agents) must manage their listings at each stage of the listing process.

Specifically, two types of pre-market listings have been defined:

Delayed Listings: An owner has hired an agent, but the property is not ready for marketing. The agent is allowed to help the owner prepare the property during this time. However, the agent is not allowed to publicly market the home, and no showings are allowed. When the property is ready, then it is listed in the MLS and marketing and showings may begin.

Coming Soon Listing: An agent can publicly market a property before it is available for showings by entering it into the MLS in the “Coming Soon” status with a specific “Go Active” date. Although public marketing is allowed, showings are not allowed and the owner may not accept an offer until the “Go Active” date passes. Importantly, the “Go Active” date may not be moved up once it has been publicized. A property can only be in the “Coming Soon” status in the MLS for a maximum of 14 days.

Another new rule covers listings that are withheld from the MLS.

Withheld Listings: An agent can opt to not enter a listing into the MLS. This is discouraged since marketing properties in the MLS is the best way to maximize exposure to buyers. However, in some situations withholding a listing may be appropriate. An agent who withholds their listing from the MLS may not publicly market the property.

The new rules define “Public Marketing” to include open houses, displaying the listing anywhere on the internet, advertising the listing in written publications, placing a sign in the yard, sharing the listing on social media, or distributing the listing via email.

These rules mean that if you see a property advertised by an agent, whether it is “Coming Soon” or not, then you should be able to find out about that listing from any agent because there is a corresponding MLS entry. Public marketing is not allowed under these rules unless the property is already listed in the MLS. This is good for buyers, and it is good for agents representing buyers.

We’ll see how the new rules work in practice over the coming months. In order to be effective the agent community needs to know about the new rules, understand them, and buy in to the changes. There also needs to be a reasonable enforcement mechanism.

Amy and I have already discussed small changes to our pre-marketing strategy in order to make sure we comply. Our expectation is that other local agents will comply too.

That said, it will be interesting to see what happens this spring. The rules represent a meaningful reduction in the flexibility we previously enjoyed while building awareness of new listings.

Tiny House as a Rolling Office

2019-02-01 Prairie Style Tiny House Drawing

Tiny houses pop up in my life at a frequency that far exceeds my actual real-life experience with that particular type of housing. I’ve never seen one in person, and I have no desire to live in one. The closest I’ve come to a tiny house is touring an 1800s camp on Martha’s Vineyard.

I see tiny houses in the news and on TV all the time. I talk about them at family gatherings because someone has them as rentals on his properties. I even met someone in Hartford who had experience developing tiny house communities.

The appeal of tiny living eludes me – it’s just not for me.

That said, I can understand the draw. The economics are attractive if you’re willing to live in a very small space. And the ability to periodically move your home to new locations can create interesting possibilities.

When I saw this article about a tiny house in the Prairie style of Frank Lloyd Wright my mind went to work. This is a tiny house that I might be able to get behind.

I definitely wouldn’t live in it, but I think it would make an amazing rolling office.

Swap out the bed for a conference table, add some technology, and this could be fun. Best of all, the company that makes these things (Escape) builds them to RV specs. So it’s going to do a whole lot better on the road than the typical tiny house that was really not designed for travel.

Maybe I would even take it out for the occasional weekend camping trip…

Is Money Less Green in Hartford?

I’m perplexed. It appears that money available to be earned in Hartford is less valuable than money that can be earned in West Hartford. Even though that goes against the basic idea that a dollar is a dollar.

We have a 2-unit building for sale in Hartford that is quite close to the West Hartford town line. For those interested in the specifics, it’s at 307 New Park Avenue, which is across the street from the movie theater and just south of I84.

307-309 New Park Ave, Hartford

That location is not closely linked to any Hartford neighborhood. In fact, the closest residential enclave to the homes on this triangle of land is in West Hartford.

What confuses me is that investor buyers aggressively pursue properties in West Hartford, but they don’t seem interested in a building a block away that is similar in layout and vintage, and has better economics.

Only four 2-unit buildings sold south of the highway in West Hartford over the past year. The table below compares those buildings to our listing.

2019-01-29 Comparing Two-Unit Deals

Rental income is not available for all the properties on the list. However, the actual rent our listing generates is in line with two properties that sold in the $260,000s. We’re only asking $209,900 … and our property taxes are much lower. Our listing has the most favorable ratio of income to expenses, by a long shot.

Why the big difference in value?

It could be that the buildings have different attractiveness to owner-occupants, but most West Hartford buildings are purchased as investments. So the buyer is unlikely to live in any of these properties.

The tenants pay their own utilities in our listing, so that’s not a hidden expense to the investor owner that is holding back our price.

The condition of the property is fine, so it’s not like we’re marketing a place in poor shape. Tenants generally ensure that the rent they pay reflects the condition anyway, and we know the rents.

Investments in the Hartford multi-family market have even shown better appreciation over the past few years. Median prices increased 32% compared to 4%.

2019-01-29 Two-Unit Deals in West Hartford versus Hartford

It is interesting to note that our $209,900 asking is a lower price than any West Hartford 2-unit building sold for since 2016.

I must be missing something in this analysis…
A.) The building is barely outside of West Hartford.
B.) Actual tenants pay strong monthly rents and utilities.
C.) Market appreciation has been strong in Hartford.

There is money to be made by operating 307 New Park Avenue as an investment property. More money than buying a similar vintage 2-unit building a block away in West Hartford.

Is money less green in Hartford?

Note: All data is from the CTMLS, and deemed reliable but not guaranteed. It represents multi-unit properties marketed as 2-unit buildings. One West Hartford property that was a commercial use simultaneously marketed as a 2-unit was removed from the data set.

$238 Million for One Condo in NYC

2016-07-02 NYC Skyline 8615-1920

A finance guy paid $238 million for a large apartment at the top of a building overlooking Central Park.

The CTMLS says that the total cost of the 687 residential properties (single-units, multi-units, and condos) that sold in Hartford in all of 2018 was $109.3 million. This comes out to about $159,153 per property.

West Hartford, which has the most active residential market in this area and strong prices, was able to top that one deal in 2018. The 947 residential deals totaled $311.8 million in total value, which is $329,201 per property.

My mind wanders in many directions when contemplating these data points, but there is one overriding conclusion…

Housing in Greater Hartford is affordable, allowing normal people with regular jobs to pursue ownership opportunities. This is an important advantage we have over NYC and other expensive cities.

2018 Condo Sales: Steady Market

2019-01-21 Hartford County Condo Sales

Hartford County condominiums maintained their pace of sales in 2018. The deal count increased by 2 properties from 2017 to finish with a total of 2,204 sales.

2019-01-21 Hartford County Condo Prices

The median condo sales price increased by 2% from the previous year, reaching $153,000. The positive direction was the first meaningful step upwards for the median price in a decade.

One of the reasons for the long-term downward trend in the median price is that developers have sold fewer “New Construction” condos in the current decade. The chart below shows that there was a wave of new properties built in the previous decade. Those new units, which represented more than 15% of the total number of deals in 2006, played an important role in pushing up the median price.

2019-01-21 Hartford County New Construction Condo Sales

The uptick in median price, and the level deal count, resulted in a reasonably steady distribution of sales by price band.

2019-01-21 Hartford County Condo Sales by Price Band

Finally, here is the breakdown of the number of deals and median prices by town. Condominiums are distributed throughout the County, so a number of towns have active condo markets.

2019-01-21 Hartford County Condominium Sales in 2018 by Town

Don’t hesitate to ask us your condominium questions. We’re experienced agents who are active the local condo market. How can we help you?