October Contracts: In Line With Expectations

There were 464 Hartford County single-family properties that went under contract during the month of October. Activity was closer to last year’s activity level than the 2009 level, which was influenced by a homebuyer tax credit deadline (Recall that buyers had to close by the end of November 2009, which meant getting their property under contract in October).

Hartford County Contracts for October 2011

The County remains on track to exceed 2010’s total number of contracts. We need to have 635 homes go under contract in the last two months in order to match 2010, which is a reasonable number despite December traditionally being the slowest month of the year for contracts.

Hartford County Contracts by Town for OctoberFallout from the late-October winter storm, and the widespread power outages that came with it, definitely impacted the local real estate markets. Essentially, we had a week off as there were very few showings. That’s not to say we, or real estate agents overall, weren’t busy. As homeowners we had some cleanup to do on our property. And we spent a fair amount of time working with our sellers who had some work to do at their homes.

Once the weekend arrived we began to see signs of life. One West Hartford agent called asking to see a listing even though the home did not have power. He still did not have power at his home, and his buyer client did not have power either, but they were both ready to get back out there and look at homes again – flashlights in hand.

The market could go in one of two ways from here. Hopefully it will pick up where it left off before the storm and continue into late November, as often happens. The alternative is that buyers could just pack it in for the year and turn their attention to the holidays. This week should give us a good sense of buyer sentiment, and how likely we will be to beat 2010’s contract total.

August Contracts: A Wash Out

Single-family contracts totaled 532 in August, a slight decline from July’s total, though an increase over August 2010’s tally – it was a summer month with sporadic activity.

Hurricane Irene passed through the County during the final week of the month, putting most of the real estate market on hold for at least three days, with some areas affected through the end of the month. We don’t know for sure how much of an impact it had, but feel comfortable saying that the number of deals would have been higher without the storm – there were essentially no showings over the storm weekend.

Hartford County Total Contracts for August 2011

Interest in the real estate market seems to be picking up after the extended period of downtime caused by the storm and holiday on back-to-back weekends. It will be interesting to see how the fall market plays out this year, and ultimately how the year ends. As the chart above shows, the market is about 1.5x as busy during the warm months as it is during the cold months. It’s a noticeable difference, but there are definitely buyers making offers on homes all year.

Inventory levels decreased slightly during the month, suggesting that either the pace of deals increased or the pace of listings slowed. August showed fewer contracts than July – the pace of deals slowed – so the pace of listings must have slowed even more.

We’ve mentioned this before, but it’s something worth repeating … buyers have an opportunity to get into homes at prices well off the peak, and with very attractive interest rates. This applies to move-up buyers in addition to first-time buyers. Just give it some thought … we’ll be happy to show you what’s available.

Here’s how the month went for each of the individual towns.

Hartford County Contracts Written by Town for August 2011

May Contracts: A Classic Look

Activity in the Greater Hartford real estate markets continued to build through the month of May, with a total of 687 Hartford County deals coming together in the Connecticut Multiple Listing Service. Markets are now back in line with the 2009 numbers.

Hartford Country Real Estate Contracts for May 2011

May’s result shows that there are still buyers on the hunt for homes. The peak of the spring market is often the month of May, so seeing the number of deals increase over April is reassuring, providing some level of confirmation that the market is returning to normal patterns.

Hartford County Contract by Town for May 2011Looking at the year-over-year comparisons, May 2011 outperformed May 2010 by 70%, which is a huge number. Although it’s always fun to make predictions and then see them come true, getting this one right (see the bottom of April’s commentary) feels like a hollow victory. There was no real insight here, just a solid understanding of how math works.

The important question is whether buyers will continue to shop through June. We’ve noticed that buyers seem to be coming out in waves this spring. There have been a few very busy weeks with lots of calls to tour homes, and showings scheduled on our listings. Then there have been other weeks that have been surprisingly quiet. We haven’t figured out the pattern, so your guess is as good as ours.

Buyers continue to prefer homes in which they don’t need to make any improvements. Picture perfect homes in popular locations sell quite quickly. Homes in very nice condition seem to find buyers who are excited to live there even if the counters aren’t granite. Properties that are clean and tidy are often more marketable than better updated homes that aren’t as well maintained.

Buyers willing to step outside of the must-be-perfect mindset can find interesting properties at a reasonable price. They just have to be willing to do a little work. Sometimes it’s a simple as painting and cleaning. Other times it’s more involved projects like updating the kitchen and/or baths.

One final thought … a lot of buyers seem to be thinking of their potential purchase as an investment more than a home. I understand that everyone wants to get the best deal possible, and would ideally like their property to appreciate over both the short and long term.

There’s a difficult-to-quantify side to residential real estate that relates to “quiet enjoyment,” or how much you like living in your new home. How much do you value a certain style of home, or layout? How much do you value the neighborhood a home is in? How much do you value your commute time? Are you willing to make compromises in one area to get what you want in another?

Slower January for Condos

The number of condominiums that went under contract in Hartford County this January trailed 2010’s total by just over 20%. The drop in activity continues the post tax credit trend from last year. Since this month’s deal count was actually in line with the January 2009 numbers, it appears that the market is simply returning to a more realistic activity level after being goosed by last year’s tax credit.

Buyers and sellers successfully negotiated contracts on 103 Hartford County condominiums in January. The table shows the results by town, and sorts it based on the number of deals. There are some surprising results in the data, both in terms of the number of sales and the change from last year.

Some towns have more condos than others – it’s just the way the housing stock was built in those areas. What’s interesting about the January result is that some of the towns with the most condos had relatively few deals. South Windsor has numerous condo complexes and is routinely at the top of the list in terms of the number of deals. This month they only had 4, which was well off last year’s count of 12. Rocky Hill is another town with an active condo market that got off to a slow start.

The other important stat is inventory. We ran the calculation using the current number of listings and the total number of contracts over the past 12 months. This is how we always do it so that we can minimize the impact of seasonality. Since we believe that the number of deals last year is artificially high (because of the tax credit), then that’s going to make the inventory look lower than it really is. Inventory is also often at a seasonal low in January. The spring market hasn’t quite kicked in, and sellers have not yet listed their properties.

With those two points in mind, the current inventory is concerning. The County is going into the spring with more than 8 months of inventory, which is already well into “Buyer’s Market” territory (more than 6 months). We’ll keep a close eye on this in the coming months and expect a large jump in the calculation in May once the tax credit deals are more than 12 months in the past.

January Listing Activity

Well that stunk. January is in the books and it seemed really slow. It takes a couple days for agents to get all their negotiated contracts into the MLS, so we still don’t know just how much slower it was than recent years. Hopefully we can get that data up by the end of the week.

January Listings for Hartford CountyIn the meantime, here’s a snapshot of the listings for the first month of the year. Overall, the number of listings was down 24% from last year. Looking back even further, the number of January listings for this year and the past few has been 702 (2011), 922 (2010), 845 (2009), 1099 (2008), 1129 (2007), and 984 (2006). Most individual towns showed a decrease in listings, but there were a few bright spots. My first reaction was that the more rural towns were more active than the denser urban towns, but I’m not sure that holds up under close scrutiny.

We actually don’t believe that the reduced activity points to the slowest year ever. There’s been a lot of snow this year. Well more than average, and it has consumed much more of people’s time and energy than during a usual January. We think that all the white stuff is postponing the spring market … but it will get here eventually. If I were a seller, I wouldn’t be in a rush to get my place on the market.

Buyers also seem to be taking their time because of the weather. It will be interesting to see what the contracts data tells us, but our anecdotal experience is that buyers are not in a rush. Some are concerned about doing a home inspection with all of this snow on the ground, while others just aren’t seeing any new listings that they like.

We placed a quick call to one of our favorite home inspectors to get their take on the weather. They said that the snow isn’t a big problem. Although it may interfere with some portions of an inspection (looking at the outside of a roof), it actually makes it easier to do other things (look for roof leaks in the attic). They felt it was essentially a wash and that buyers should still feel comfortable that the home inspection would give them a good sense of the overall condition of the home.

Well, off to shovel some more…