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.

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

May Contracts: Rebound

Hartford County Single Family Contracts in May 2017

May contracts rebounded sharply from the seemingly out-of-line data point reported for April. Hartford County finished the month with 1,123 single-family contracts. It was a higher total than any of the spring months in 2016, or any other month since we began tracking contracts using this methodology in 2009. The May total brought the year to date deal count to within 2 of May 2016 count.

Inventory data showed that there was a modest increase in the number of available homes. The County’s months of inventory increased from 3.3 to 3.5. Additionally, the number of municipalities with 3.0 months of inventory or less declined from 12 to 8. There was more balance between supply and demand in May than in April.

Buyers intent on purchasing this spring faced two headwinds that may have caused the April data point to be an outlier.

First, competition from other buyers may have prevented home shoppers from “winning” properties that they tried to buy. This headwind was caused by the low inventory levels that were observed.

The second headwind was psychological, the natural tendency to want to wait to see if better options appear. The Greater Hartford real estate market is dominated by homes that were built decades ago. There is relatively little new construction, and virtually no large-scale subdivisions that offer new, cookie-cutter single-family homes.

Because of the nature of the housing stock, every home is different. Buyers who don’t love their options will often wait to see if something better comes onto the market. They want to find the right fit. However, there is a limit to their patience. At some point they have to pick from the available options so that they have a place to live.

May continued the strong spring real estate market. Hartford County is back on pace with 2016, and shows signs of continued strength into the late spring and early summer months.

Hartford County Single Family Contracts in May 2017 by Town

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