2011 Average Prices and Sales Mix
Warning: What follows is quite dorktacular. You have been warned.
Last week we looked at the really big picture transactions data for Hartford County in 2011. The main concern we had with how the numbers turned out was that the average single-family home price appeared to rise slightly from 2010 to 2011, which was not what we saw in the market on a house by house basis.
There is no easy way to track the price trends in a region because every house is unique. Repeat sales is the best method I know of, but it’s too hard for us to use. Anyway, we were talking averages in the post. Our hypothesis as to why the average might be misleading in this case is that averages can be influenced by a change in the mix of homes that sold between the two years. They are especially susceptible to sales of expensive homes since one million dollar property contributes as much to the total sales volume as five $200,000 homes.
The first step we took to test our hypothesis was to look at how the mix of sales changed between the two years.
The chart shows that the number of sales increased in the sub-$100,000 price band and also in all three price bands above $500,000. It also shows that the $100,000s remained almost exactly the same. Finally, the number of deals in the $200,000s fell by about 20%, while both the $300,000s and $400,000s fell by about 12%. The chart confirms our anecdotal observation that there is was more interest in high end properties in 2011, but doesn’t address our hypothesis in a convincing manner.
What if we plotted the total sales volume for each price band instead of the number of deals? That would put each of the price points on equal footing in terms of their contribution to the average.
This chart shows that the homes that sold for less than $100,000 matter very little in the average. But otherwise the chart is not conclusive about whether the average remained the same due to prices holding steady between the two years or some other reason.
Maybe we should just throw in the towel on the average as a proxy for home prices and move over to the median. Between 2010 and 2011 the median single-family home price in Hartford County fell 3.3% from $230,000 to $222,500.
Or we can just trust our observations of the market … home prices fell in 2011.
Maintaining Your Property in the Winter
Dear Seller of a Vacant House,
We had our first real snowstorm of the season on Saturday. Around Hartford most places ended up with 3-4 inches of snow. Really nothing compared to some of the storms from last year, but still an amount that most would consider needs to be shoveled. So why did I, and my clients, have to tromp through this on Sunday when going to view your home?
Now, I know you don’t live here any more. You’re across the country at your new place and have other things on your mind. And at least it wasn’t like the debacle I stumbled across last year. But your house is still here and you are trying to sell it. Why not try to welcome the people that may want to buy it?
If you could, please hire someone to plow your driveway and shovel your front walk and sidewalk. I know my clients and I would appreciate it and most likely your neighbors will too. Also, if you don’t have your driveway and walks shoveled you’re essentially letting bad guys know that you’re not around and no one really cares for the place. They may decide that you also don’t care about your copper pipes and will let themselves in to take them. Just sayin’…
Sledding in Hartford: Elizabeth Park
Elizabeth Park has a popular sliding hill just to the east of Prospect Avenue, and just south of Asylum Avenue in Hartford.
Though not very long, the steep embankment always draws a crowd in fresh snow and makes for an exciting run. There is even an opportunity for a jump at the bottom of the hill when crossing over the gravel path that circles this portion of the park.
2011 Closed Stats From 50,000 Feet
Last year we gathered up all the Hartford County residential transactions since the beginning of the CTMLS in 2000 and showed how the very high level trends had changed over 10 years. Today we update those charts with the data from 2011. As always, the CTMLS is deemed reliable but not guaranteed.
Observations
The total number of single-family home transactions fell again in 2011, decreasing about 8% from the 2010 total. With the latest data point, activity for this type of property is about 41% off the 2005 peak in Hartford County. Last year we wondered whether we had seen a bottom in the number of deals – clearly 2010 was not the bottom.
As sales volume fell, showing a decrease in overall demand, the average sales price was apparently not changed. We don’t put a lot of faith in average prices because they are strongly influenced by the mix of homes that sold in a particular year, so we think something else is going on.
Our anecdotal experience is that home prices are still falling in all the towns and markets in which we do business. We also see more interest in higher priced homes, which will tend to inflate the average, and believe that’s why the average sale price edged up slightly. We’ll work on building the case to either prove or refute this hypothesis and share that result too.
Big picture analysis like this is never especially satisfying since we usually end up with more questions than answers. What are you guys seeing out there as you follow the markets? Michael called 2011 almost perfectly in the comments from last year’s post, so we clearly have knowledgeable readers!
Also, we have this data broken down by every single town in Hartford County. If you’re interested in a specific town, email us and we’ll send you the charts.
Hidden Houses
Down this nondescript, unpaved driveway are three hidden houses. Other than the small sign to the right of the driveway, you would never know it from the road.
All three of the hidden homes were built in the early 1900s, which makes them a little newer than the properties along the road. The visible homes almost all date back to the 1800s.
These hidden homes all have a very secluded feel even though they’re quite central in Greater Hartford. We’ve been back there a few times and have been impressed by how quickly you forget that you’re in the middle of a City. Part of it is the lot sizes, giving the homes nice spacing from each other, but it’s also due to the large park that is adjacent to the two homes in the rear.
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A Hidden House