Archive for the 'Market Statistics' Category
Where is the Real Estate Market Going?
The question we get more than anything else is, “Where is the real estate market going?” We try to answer with a quick recap of the current situation, and maybe some thoughts on the near future, but that’s often not enough for the questioner. They want to know the long-term direction of the real estate market. They understand that we can’t predict the future, but they ask anyway. The real answer is that nobody knows, even if they try to tell you otherwise.
What we can talk about are current trends. One metric we noted in a previous post was the number of contracts written by week, using data from the CT Multiple Listing Service, which is deemed reliable but not guaranteed. We’ve been comparing 2010 to 2004, mainly because the calendar-based holidays (for example the 4th of July) fall on the same days of the week for most of the year.
Since the tax credit expired at the end of April, the number of contracts written per week has held relatively steady. This year is clearly less active than 2004, so it will be interesting to see where the trend settles once the impact of the credit fades away. At some point this year’s data should begin to follow the traditional seasonality of the market.
We’ve seen a pick-up in relocation buyers – both our own clients and other agents bringing them through our listings – which means that companies are investing in experienced employees. Hiring trends are an important indicator for the local housing market. People are more comfortable buying a home if they are confident that they’re in a stable job (or could find a different job) and will be able to make their mortgage payments.
Analysis in the most recent Hartford County Property Report showed that inventory levels (table on page 3, last column) in the County were 6.7 months for single-family homes. This means it would take that long to sell all of the current listings if the recent sales pace continued. Six months of inventory is generally considered the boundary between a neutral market and a buyer’s market. More than six months of inventory means that there are lots of homes to choose from – so buyers have an advantage. Less than three months of inventory is considered a seller’s market. No town had inventory levels that low, though Newington was close at 3.7 months. The conclusion from the inventory data is that markets are slightly favoring buyers.
To answer the original question, the real estate market is plugging along. Hopefully the activity level will build towards the end of the summer and settle back into traditional seasonal patterns by the end of the year. But your guess is as good as ours.
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.