December Contracts: That’s a Wrap

2018-01-04 Hartford County Single Family Contracts in December 2017

Hartford County finished December with 464 single-family home contracts, more than 12% fewer than December 2016. For the full year we observed 9,767 deals, a mere 17 fewer than the 2016 total. Local real estate performed well during 2017 despite the December finish.

We’ll get deeper into the statistics next week by analyzing closed sales for the year. Contract data is interesting because of its immediacy, which is why we report it on a monthly basis. However, the closed sales data available at the end of the year contains much more information.

Most importantly, closed sales include a true market price for each property. It is valuable to look at how pricing changes over time, but we don’t know the value of a home when the buyer and seller agree to the contract. We have to wait until the deal closes, which typically takes 45 – 60 days.

It is also nice to be able to use a full year’s worth of sales when analyzing pricing. As you can see from the chart at the top, the real estate market has strong seasonal trends. It’s better to compare a full year to a different full year so that the effects of seasonality are minimized.

The other advantage of using full year data sets is that there is a lot more data. Hartford County homes are not usually in large subdivisions, and most of the housing stock is at least 40 years old. Each property is different, both because it was built individually (versus being built with 100 other identical homes), and because owners have made different updates over the years. Therefore the mix of homes sold (style, size, price, …) can vary widely from month to month, and even quarter to quarter. The more data that is included in the analysis, the more significant the findings.

As we work to analyze the 2017 closed sales, here is the final tally of contracts for the year, which gives a good sense of market activity in the County overall and in individual towns.

Thank you for reading, and have a wonderful 2018!

2018-01-04 Hartford County Single Family Contracts in December 2017 by Town

November Contracts: Smooth Landing

2017-12-05 Hartford County Single Family Contracts in November 2017

Hartford County finished November with 646 single-family home contracts, which was slightly fewer than the total from November 2016. On a year-to-date basis, the market is about 0.5% ahead of last year.

Monthly deal counts followed the 2016 trends very closely for the past few months as the market began to wind down for the year. December is off to an active start, but will continue the quieting trend. There tend to be fewer home buyers at this time of year, but those who are shopping are generally more serious about their search.

There were very few differences in the number of deals in each of the different price bands. Most of the bands below $1 million are within 1% of their 2016 total. The $300,000s has been the largest gainer, with a 2.9% increase. There have been fewer deals at the million dollar level, but because that is such a small part of the overall market it is difficult to assess the significance.

Inventory levels are low, which is common because sellers take their homes off the market during the holiday season. This is the slowest time of the real estate year as both buyers and sellers regroup and begin to plan for the spring.

Have a happy holiday season … we’ll have a full analysis of the 2017 market in January.

2017-12-05 Hartford County Single Family Contracts in November 2017 by Town

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

June Contracts: One Thousand

2017-07-08 Hartford County Single Family Contracts in June 2017

Hartford County finished June 2017 with 1,000 single-family contracts. Hitting four digits in a month is rare, a level of activity that the market only reaches during spring months of busy years. Despite reaching the 1,000 deal milestone, the month trailed the activity level of June 2016 by about 2.6%. On a year-to-date basis, 2017 trails 2016 by 0.5%.

Town-by-town results (below) are often widely scattered, but June’s results seem to be exceptionally diverse. Even in the smaller markets it’s unusual to see outperformance or underperformance of more than 50% for a month. Five of the 28 towns had at least a 50% swing in the number of deals compared to June 2016.

The year-to-date trends also show quite a bit of diversity. Many, but not all, of the less dense suburbs to the west and north of the City lagged last year’s performance by over 10%. At the other end of the spectrum, East Hartford and Manchester recorded the two largest increases in deals. East Hartford is 59 contracts ahead, while Manchester is at +57 contracts.

Inventory of active listings continues to follow the same trend we have been reporting for years. In the County overall, it is a seller’s market for properties worth less than $200,000, a neutral market for homes between $200,000 and $400,000, and a buyer’s market for prices above $400,000. The dynamics of individual towns definitely vary, but the general trend typically holds. Sellers have the advantage at the low end, while buyers have the advantage at the high end.

Although the summer has the reputation of being a slower period for real estate, the chart at the top shows that July and August are still active months for buyers. We’re looking forward to keeping the year going as we work with our buyer and seller clients. Let us know if you need some real estate help!

2017-07-09 Hartford County Single Family Contracts in June 2017 by Town