November Contracts: Back on Trend

2018-12-05 Hartford County Single Family Contracts in November 2018

November exhibited the typical 4th quarter decline in activity, but outperformed November of 2017 by 4%. There were 672 single-family home contracts in Greater Hartford during the month, a number that was comparable to the September 2018 result.

As we approach the year end, the chart at the top has basically finalized its shape. The months of June, July, August, and September feel out of line. It’s not that we’re questioning the data, rather we’re observing that those four months do not smoothly connect the May and October data points like they do in some years.

The reasons behind the abrupt market change are, unfortunately, not a mystery that we are likely to solve. We neither predicted the change, nor were able to explain it as it happened. Even now, a few months removed, hindsight has not provided any additional information. No single factor has emerged as the defining narrative for the summer months. As always, we prefer to acknowledge the uncertainty and factor it into our thinking rather than pretend to be able to explain it.

Even though the year isn’t quite over, we’ve begun the planning process for 2019. We’re looking forward to another active year in the real estate markets.

How can we help you with your real estate goals?

2018-12-05 Hartford County Single Family Contracts in November 2018 by Town

October Contracts: Surprise!

2018-11-03 Hartford County Single Family Contracts in October 2018

Just when it seemed like the real estate year was over, the month of October turned out to be surprisingly active.

Hartford County recorded 812 single-family home contracts, which was more than 11% higher than October of last year. The total was also a significant jump from last month, September 2018, when the county finished with just 684 contracts.

This single-month reversal is one of the largest we have seen since we began reporting on monthly contract data. There appears to be no direct cause for the increase. The economy has not dramatically changed, election day has not arrived, mortgage rates remain slightly below 5%, and we are not aware of any major new narratives that would justify such a significant market shift.

We’re happy to be reporting positive market news, however unexpected it may be. Consult with your favorite real estate agent to find out how this upswing impacted your town or neighborhood market. There may still be opportunities this year, and this is the time to begin planning for next year’s spring market.

2018-11-03 Hartford County Single Family Contracts in October 2018 by Town

September Contracts: Falling Leaves and Deal Counts

Hartford County Single Family Contracts in September 2018

September was a down month for the Hartford County single-family market. The number of contracts signed declined more than 9% from the same month last year, leaving the County 4% behind on a year-to-date basis.

It appears that there will be a modest fall market in Hartford County this year. Other agents throughout the state are reporting similar observations about the market, so the deceleration does not appear to be unique to Greater Hartford.

I’ve heard a number of competing theories as to why we had a slow September, but it’s unfortunately impossible to know for sure why the number of deals moved downward this month. We cannot say for certain whether it is the local economy, rising mortgage interest rates, Connecticut’s political and economic situation, the national political environment, or something else entirely.

Most likely it is a combination of many factors.

Ironically, this may be an excellent opportunity for buyers to step in and find their new home. Let us know if you are considering a home search. We are always happy to talk real estate!

Hartford County Single Family Contracts in September 2018 by Town

August Contracts: Typical End of Summer

2018-09-07 Hartford County Single Family Contracts in August 2018

Hartford County finished August with 779 single-family contracts, slightly behind the August 2017 total of 785 deals. It continues to be a strong year for the county, with the total deal count only off last year’s total by about 3.4%.

Real estate markets took the traditional late summer step back in August. The pool of buyers trying to time the school year cycle typically phase out of the market at about this time of the year. Since it usually takes 45 – 60 days for a deal to close, putting a home under contract in August is unlikely to result in a move-in date before early September … after the school year has begun.

From now through March, buyers and sellers are folks who choosing to move for reasons that not related to schools. Downsizing continues to be a big trend in the region as the population ages. Work relocations are common because the Hartford area is a commercial hub. We are still seeing people buying their first home as they take advantage of the stable economy and the attractive mortgage interest rates.

Town-by-town performance is always interesting to track, and at this time of the year the numbers tend to settle because there is a meaningful amount of data. Focusing on the year-to-date column below, East Hartford and Manchester are the two municipalities showing the largest drop in the number of deals. Both are trailing 2017 by 104 contracts as of the end of August.

In East Hartford, the City had a very slow run in June and July. Those two months accounted for 57 deals of underperformance, which is more than half of the total for the year. Inventory levels are on the low side, at 2.8 months overall, but are no longer so low that buyers don’t have any homes to consider purchasing.

Manchester’s underperformance is actually more about last year than this year. The number of monthly deals this year has followed normal seasonal patterns, though it has been slightly below each corresponding month from last year. The main difference in the overall total was caused by surprisingly high deal counts in January, March, and April 2017. This year has been more of a typical year for Manchester.

Suffield has shown the largest increase in deals over 2017, with 29 more contracts leading to 25.7% more activity. As a smaller town, Suffield’s monthly data is more erratic than the East Hartford or Manchester. Consistent monthly deal counts during the summer of 2018 created the surplus deals after a hit-or-miss summer in 2017.

There could still be some surprises between now and the end of the year. Whether there are or not, 2018 is very likely to be another strong year for the local real estate markets.

2018-09-07 Hartford County Single Family Contracts in August 2018 by Town

July Contracts: Mixed Signals

2018-08-02 Hartford County Single Family Contracts in July 2018

Hartford County finished July with 868 single-family home contracts, a decline of more than 15% from the July 2017 total. On a year-to-date basis the County is a little less than 4% behind where it was at this point last year.

The comparison month, July 2017, was an outlier in last year’s data. The chart above shows that the deal total unexpectedly jumped last July, unlike the total from July 2016. Because of the odd behavior in the 2017 data, we’re inclined to not worry about last month’s result appearing to be such a big miss. 2018 continues to be a solid year, if not quite as active as 2017.

Scanning through the year-to-date performance by town in the table below, it looks like most of the towns in the Farmington Valley are having a better year than last year. On the other hand, some of the urban towns that we repeatedly highlighted last year as strong performers are showing signs that this year is a step backwards.

Inventory levels vary widely from town to town, but remain on the lower end of the spectrum. It’s possible that low inventory levels are acting as a drag on the market.

Consider East Hartford, which is more than 22% behind last year’s pace for deals. They are currently at 2.3 months of inventory, which is a seller’s market. Buyers need a reasonable selection of homes to choose from as they consider their options. And perhaps there just isn’t a good enough selection in some of the towns with low inventory. Greater Hartford is unfortunately not the type of market where people will buy any property at any price.

All of the towns that have more than 10% gains in the deal count have inventory levels of at least 4.8 months, putting them in the neutral market category. It’s a trend that we’ll monitor as we think about how to put the decrease in deals in proper context.

2018-08-02 Hartford County Single Family Contracts in July 2018 by Town