Archive for the 'Closing' Category
Friday the 13th
The other day we were talking about our current pending deals, and noted that we both have closings scheduled for mid August. Closing in the middle of the month is pretty common, but we discovered that our two deals have something in common. Neither us, nor our clients, wanted to close on Friday the 13th.
Friday is the most common day for real estate closings in Hartford County. In looking at data for over 30,000 single-family and condo closings since the beginning of 2007, there are more than twice as many closings on Friday as any other day of the week. The reason we often hear for a preferred Friday closing is so that people have time to move in over the weekend before returning back to work on Monday.
Are we the only agents with an aversion to Friday the 13? No, no we’re not.
In weeks that contain a Friday the 13th (red bars below), there is a noticeable decrease in the number of Friday closings. Clearly not everyone is afraid of the day, but there are others who would prefer not to risk it. The chart shows that many buyers choose to close on Thursday the 12th, while some push it out to Monday the 16th.
We expected there to be more of an aversion to Friday the 13th closings than the data shows. Especially since many of the agents we know are mildly superstitious (no sense putting clients at risk of bad karma/energy/whatever). Maybe people don’t realize that the closings they schedule on a 13th are also on a Friday. Or maybe they’re too embarrassed to admit their phobia. Or maybe we’re just a little too sensitive to this sort of thing.
Would you schedule a closing on Friday the 13th?
HCPR: Soaring Sales in Second Quarter
Sales in Hartford County soared in the second quarter of 2010 versus the second quarter of 2009 thanks to the Federal Home Buyer Tax Credit. Median prices were up modestly over the year-previous quarter. Median days on market fell meaningfully, reflecting the frenzied pace of the County’s residential real estate market as the tax credit overlapped with the traditional spring market.
Single-Family Homes
Second quarter sales of single-family homes increased 23.8% compared to the year-earlier period. Although the total number of 2,047 sales improves on the results for the quarter in both 2008 and 2009, second quarter activity still trailed all of the years between 2000 and 2007 for which the CTMLS has data.
The median price for single-family homes in the County increased by 1.3% from $227,000 to $230,000. Sales price per square foot, another valuation metric, remained virtually unchanged at $147/sqft. Finally, the median time on market decreased from 40 days to 31 days.
Condominiums
Hartford County condominiums trended in the same directions as the single-family homes during the quarter. The number of sales was up 43.8% over the second quarter last year, with the 644 total sales running ahead of 2008 — 2009 and behind 2000 — 2007.
The median sales price rose 3.0% during the quarter, from $165,000 to $169,900, and the median price per square foot held steady at $134/sqft. Condominiums also experienced a decrease in sales time, with the median days on market falling from 51 to 45 days.
Residential Real Estate is More Than the Tax Credit
Local residential real estate markets continued to function even after buyers could no longer claim the Federal Tax Credit. As expected, there was a dramatic lull in the number of contracts written in May and June, which should be visible in the number of third quarter closings. However, buyers still made offers even after the credit expired.
Extending the Home Buyer Credit
The National Association of Realtors (NAR) has been leading a push to get part of the Federal Home Buyer Tax Credit extended. But don’t get too excited – their proposal won’t give allow anyone new to claim the credit.
Before diving into the details, here is a quick review of the current rules of the game:
1. First time buyer or existing owner (extra criteria).
2. Binding purchase contract by April 30, 2010.
3. Closing by June 30, 2010.
In a June 11th press release, NAR argues that 180,000 buyers met the first two rules but are at risk of missing out on the credit because their lenders will not be able to underwrite the mortgage in time. In fact, they state that “as many as one-third of qualified applicants have been notified by their lender that their mortgages will not close before June 30th.” NAR would like to protect these buyers by extending the deadline for closing to September 30th.
NAR’s main concern is that the surge in purchases at the end of April is overwhelming lenders. Others seem to believe that the tighter lending standards and the new appraisal rules that fall under the Home Valuation Code of Conduct (HVCC) are a big part of the delay. A number of articles, including Senator Reid’s press release on the issue, state that there is “growing concern” that short sales will be impacted.
We have heard about mortgage delays with some of the larger national lenders and with special programs (like CHFA) that require additional steps or approvals. However, buyers using standard mortgages with local and regional lenders are seeing their loans go through without much trouble. Appraisals can be an adventure when someone is assigned from outside of the area (like from Rhode Island!), but they have occurred in an expeditious manner. Short sales are a whole different animal, and the concerns identified seem to lead to a discussion about when the purchase contracts becomes binding – not a debate for today.
Buyers in Greater Hartford are seeing some of the same challenges that have been reported in the country overall, especially when they use national lenders. Hopefully we won’t see too many closing delays as the month of June comes to an end. And if the “closing by June 30th” rule is relaxed, that will help ensure everyone gets the incentive they were expecting.