April Contracts: It’s a Miss

2017-05-07 Hartford County Single Family Contracts in April 2017

Hartford County finished April 2017 with 967 single-family contacts. The total was a 6% decrease from April 2016, putting the County about 2% behind last year on a year-to-date basis.

April was a miss. It was a surprising decline in market activity from the March 2017 total. Deal counts are usually highest in April, May, and June. March is also generally an indicator as to how the spring will go. How did March get it so wrong?

I believe that the answer is in the supply of available homes. The number of active listings is down compared to previous years. The CTMLS includes a statistics function that reports historical monthly data on the number of active listings. The chart below shows the number of active single-family listings in Hartford County during April going back to 2007.

2017-05-07 Active Hartford County Single Family Listings in April 2017

From 2007 through 2014 there were right around 5,000 active listings in April. The total dropped to about 4,000 in 2015 and 2016. This year is even lower still, with only about 3,500.

The low supply is also visible in the inventory calculation included in the table below. At the current pace of sales, it would only take 3.3 months for buyers to put all the active listings under contract. A “seller’s market” is generally defined as being 3 months of inventory or less, so Hartford County is quite close to that threshold. Twelve individual towns have a inventory of 3.0 months or less.

We don’t have an answer to the big question … why are there so many fewer listings this spring?

One hypothesis is that owners of starter homes are content to stick with their smaller spaces rather than moving up to larger homes. Another hypothesis is that rising interest rates are trapping homeowners in their current properties since higher financing costs make their next home less affordable. A third possibility is that homeowners are being squeezed financially on other fronts (higher costs for taxes, healthcare, utilites, food, etc.), encouraging them to stick with their current housing option.

At this point we just don’t know, though we keep an eye out for articles, studies, and surveys that investigate this question.

Despite the decrease in the number of deals in April, Hartford County real estate markets are doing well. It’s possible that we will see price appreciation in the lower price bands, which have the largest mismatch between supply and demand.

2017-05-07 Hartford County Single Family Contracts in April 2017 by Town

March Contracts: Bouncing Back

Hartford County finished March with 984 single-family contracts, a 2.3% increase over March of 2016. The slight outperformance brought the year-to-date contract total to within one deal of the first quarter of 2016.

2017-04-07 Hartford County Single Family Contracts in March 2017

The market continues to be very active, with strong demand from buyers. The County-wide market is on the verge of being a seller’s market, which is traditionally defined as having less than 3 months of inventory. In general, sellers have an advantage at low price points and buyers have an advantage at high price points. However, people actually in the market looking to buy or sell need to look closely into the dynamics of the individual towns, price points, or both, to get a true picture of their situation.

The count of active listings for this time of year is down compared to recent years. The MLS reported 2,471 active single-family homes in Hartford County when I downloaded data a few days ago. Last year at this time there were 3,178. There were 3,188 in 2015.

Since the number of deals is virtually identical to last year, but the number of active listings is about 22% lower, it seems safe to conclude that the “problem” is on the supply side. Meaningfully fewer owners have listed their property for sale this spring, limiting the supply of available homes.

Too few listings is a great problem for property owners. It gives people thinking about a move some comfort that there will be buyers interested in their home. Hopefully the favorable dynamics will allow them to sell for a good price. We’ve been telling our seller clients to consider getting their home onto the market sooner rather than later.

If you’re considering a sale, we would love to have a chance to interview for your listing and provide a more in-depth analysis about your situation. Feel free to reach out to us at any point.

Finally, I should note that the table showing the number of contracts by town has been updated to include the year-to-date totals. Monthly results can be quite volatile, especially for the smaller towns. Adding the deal total over a longer time period should give a better sense of what is happening in each town’s market.

2017-04-07 Hartford County Single Family Contracts in March 2017 by Town

February Contracts: Spring is Coming

2017-03-05 Hartford County Single Family Contracts in February 2017

Hartford County finished February with 673 single-family contracts, which was 6.5% fewer deals than February 2016. On a year-to-date basis 2017 is 1.7% behind last year.

The market continues to be very active, and quite competitive. We’re not concerned about February under-performing last year. Two important factors played into the decline. The more important factor was that the inventory of available homes was quite low. As of the March 5th, when we analyzed the data, the 3 months of inventory put the County on the cusp of officially being a seller’s market.

The second, less important, factor was that the market lost a few days because of a significant snow storm. February had 28 days this year, so the 673 contracts resulted in an average of 24 per day. Most school districts cancelled two days because of the big storm. If buyers were snowed in those two days, then that translates to about 48 deals, which is almost exactly the difference between February of this year compared to February of last year.

All signs point to an active spring market for Hartford County. The only caveat is that we’re not yet sure how the upper end of the market will perform. Let us know if you’re interested in a particular town or towns. We’re happy to share a more fine-grained market analysis.

2017-03-05 Hartford County Single Family Contracts in February 2017 by Town

January Contracts: More Buyers than Sellers

2017-02-03 Hartford County Single Family Contracts in January 2017

Hartford County began 2017 with 636 single-family homes going under contract in January. The total represented a 4% increase over the total from January 2016.

The market is currently imbalanced in favor of sellers in most price bands. Because most owners target listing their properties in the “spring market,” the number of available properties does not grow quickly in January. Buyers have been eager to start their home search this year, and are currently outnumbering sellers by a meaningful margin.

Months of Inventory is the metric that we use to compare the activity level of buyers to the number of homes available for sale. Inventory is currently at 3 months, which is a low number for Hartford County. Buyers have even fewer options at price points below $300,000s, which was the strongest portion of the market in 2016.

We are expecting the real estate markets to be active this year, perhaps even building on the gains in the number of deals observed from 2014 to 2015 to 2016. The best opportunities we see right now are for homeowners looking to move up to a larger home. Most markets are much stronger at the lower price point (where the move-up buyer would sell) than they are at the upper price points (where the move-up buyer would buy).

As always, we’re here to help with your real estate needs. Feel free to reach out to us at any point.

2017-02-03 Hartford County Single Family Contracts in January 2017 by Town

December Contracts: Steady Finish

2017-01-04 Hartford County Single Family Contracts in December 2016

The Hartford County single-family market finished 2016 at almost exactly the same activity level as the previous year. The chart above shows the fourth quarter for 2015 and 2016 nearly overlapping.

The vast majority of the 9% increase in 2016’s contracts, compared to 2015’s total, occurred in the first half of the year. There was modest outperformance in August, but the second half of the year was unusually similar.

We traditionally only look at pricing data once per year, in January. Looking at smaller time periods, months or even quarters, is not very useful since the mix of homes that sell is inconsistent. This is especially true in Hartford County, where home prices cover a very broad range. Our view is that a full year’s worth of data is needed to even out the inconsistency.

We’re interested to see whether the increased activity translated into higher prices during the year. Come back for that analysis in a day or two. We want to give agents a little more time to close out all of their deals in the MLS before analyzing the 2016 sales.

Have a Happy New Year! And if you have real estate questions, please feel free to call or write … it’s time to think about spring!

2017-01-04 Hartford County Single Family Contracts in December 2016 by Town