It’s getting hot in here…well, for some pockets in town. If you’ve never used Trulia’s heat map functionality, check it out. You can search for Average Listing Price (by week) by state, town, or county. Additionally, it provides historical Average and Median Sales Price data and average Price per Square Foot. It’s a great snapshot tool to understand how your neighborhood is trending.
Major news outlets periodically publish housing data for US metro areas. This week’s version was reported by CNNMoney and is originally from Fiserv Lending Solutions. It’s a forecast of growth from April 2007 to April 2008 and a couple snapshot statistics. Although I’m not familiar with Fiserv, the forecasts are in line with others that I have seen since the beginning of the year.
There are two interesting points about our area in this report â€“ homes in Greater Hartford are more affordable than in many other areas around the country and local home prices are expected to increase this year.
Some may be surprised to hear that housing in and around Hartford is actually affordable. The Fiserv data shows that median mortgages as a percentage of income are comparable to Springfield, MA and lower here than anywhere else in New England. Most of the places young professionals find desirable and exciting are considerably less affordable based on this statistic. Anecdotal data from friends and former business school classmates confirm the study’s conclusions. Our friends in the NYC, Boston, and Washington DC areas have considerably less buying power.
The other interesting result of the report is that home prices in the Hartford area are expected to appreciate 2.8% over the next year. Although the usual headline is that US housing is in big trouble, the reality is that real estate is a local industry so conditions are different around the country. Some markets are definitely losing value â€“ typically they are the same ones that experienced such strong growth over the past few years. Most of New England is projected to either hold firm or decline slightly. The Cambridge, MA area is the only other region in NE expected to rise in value, though it’s growth forecast is less than half of Hartford’s.
So the Fiserv study shows that housing in Hartford is not only affordable compared to other metro areas, but that prices are going to be rising over the next year. It seems like the market is still in good shape and we should feel comfortable buying and selling.
After sitting on the sidelines for a few years, I’ve decided that this is the year I’m going to start personally investing in real estate. I’ll be sharing my thoughts and learnings as I go through the process.
This past week, I think I may have found a good condo property. There are a few issues though. It’s a small building and 40% of the units are currently rented. If I buy, the rental-to-owner ratio would go over 50%, potentially causing issues in getting a mortgage. However, I ran the financial analysis and the numbers are the best I’ve seen yet. Positive cash flow and slightly negative net income. The building is OLD, so I’ll need to insure that there aren’t going to be any special assessments soon, and that the HOA fees won’t rise considerably.
While I’ve built my own investment model through Excel (yes, I am a financial geek), here is a good online financial analysis tool that you may find useful…Investment Property Calculator.
Stay tuned for more exciting adventures as I continue on my path to becoming a landlord.
I’ve written about the lack of affordable of housing in CT before. Add to this a few of my other pet peeves, suburban sprawl (yes, I know it is counter-intuitive for a REALTOR to dislike sprawl) and youth drain, and we’ve got the potential for long term economic hardship not only in CT, but all of New England.
Clearly, on a town by town basis, we can start business development and real estate development projects that encourage working here rather than migrating to the more affordable Southern states and reusing land for better economic use. Blue Back Square in West Hartford center is a good example of redeveloping existing land for increased economic benefit, rather than contributing to sprawl. CT’s Department of Economic and Community Development promotes an aggressive agenda of economic and community development initiatives throughout the state.
But what about our sister New England states? Are they facing the same issues? What can we do to work together to fight “youth brain drain” and the growing housing affordability crisis? Well, as New England Futures sees it, all of New England needs to band together and work on these issues as a region, rather than individual communities and states. No more of the “I, I, I” attitude and more of the “Us, Us, Us” attitude.
This initiative seems like a good idea, however is it too many cooks in the kitchen? And if you take the bureaucracy of one state and add five more states to it, does it just become an unmanageable, ineffective distraction that dilutes our individual efforts?
Here are a couple of quick tips in order to avoid potential issues at closing.
If you know you’ve found the home you’d like to purchase, before you leave the property, make sure you go over the Inclusion and Exclusion sheet. If there are items that you would like included that aren’t spelled out on the I/E sheet, make sure they are written into your purchase and sale agreement. No one likes to go through the final walkthrough and expect to see the fireplace andirons there, only to realize they were removed by the seller because they weren’t included in the sale.
Also, when you go to your final walk through, make sure your agent brings a digital camera. If there are items still left in the house, or if the house is not in broom clean condition, or some other type of issue exists, a photo will speak a thousand words at the closing table. The issue will be easier resolved if everyone can see the exact problem.