2014 Wrap-Up: Single-Family Results

The headline trend in the Hartford County single-family real estate markets in 2014 was that there was no prevailing narrative. After a few years of uncertainty in the late 2000s following the financial crisis, the markets enjoyed a few years of obvious recovery. The results of 2014 cannot be explained in comparable terms.

The simple way to explain the year is to say it was a repeat of 2013. The number of single-family deals recorded in the CTMLS was nine higher in 2014 than in 2013. That’s a surprisingly small difference for a market with over 7,000 total deals. The chart below shows the single-family deal counts since 2001.

2015-01-15 Hartford County Single-Family Deals by Year

January is the only time of the year when we review pricing in the real estate market. Other analysts look at median and average prices on a monthly basis. We feel that the lumpiness of the market makes it difficult to trust data sampled over narrow time intervals.

The number of homes that close in a month varies wildly throughout the year. The types of homes that are available in the spring market seem different than those available in the winter. All of those factors, and more, could be addressed with a complicated model. And maybe the other analysts have the computing power and creativity to overcome those challenges. We don’t, so we stick with full year data. But I disgress…

Average prices were basically flat in 2014, while median fell by about 3%. The chart below shows average and median prices for single-family homes since 2001.

2015-01-15 Hartford County Single-Family Prices by Year

Why didn’t the average and median prices move in the same direction last year? Looking at the number of deals by price band seemed like a good place to start addressing that question.

There was a 4.9% increase in the number of deals in the $100,000s and a 4.7% decrease in the number of deals in the $200,000s. We believe that this is evidence of falling home prices during the year. Properties that used to sell in the low $200,000s fell into the high $100,000s.

There was an increase in the number of deals that closed at prices above $700,000. In fact, there was a 25% increase in the number of properties that sold for between $700,000 and $1,000,000. This was the second year in a row of strong deal count growth in that price band. It is important to note, however, that the price band only contributed 155 deals to the County’s total, so it is not a fundamental driver of the market.

2015-01-15 Hartford County Single-Family Deals by Price Band

West Hartford Stats: The Summer Season

July was an active month in the West Hartford single-family real estate market, but not quite as exciting as June. There were 86 closings in July, which was modestly above the 2012 count, and on a year-to-date basis we are about 12% ahead of 2012 in the total number of closed deals.

2013-07 West Hartford Transactions by Month

The statistics can shift a lot over the summer months. Buyers that put properties under contract in the spring close on those deals and move in to their new homes over the summer, so June and July tend to be the peak for closings. At the same time, the number of homes under contract will begin to shrink – there was 158 under contract in June versus 144 right now. The change in the number of active listing is less predictable, and it has remained almost identical to what we reported in June.

The charts below show that the inventory of active listings in the $200,000s has increased since the June report. This is the most active price band in town, and is just below the median sale price for West Hartford MLS deals – the median price in town was pretty consistently right at $300,000 for 2010, 2011 and 2012.

You can find lots of different types of homes with prices in the $200,000s. There are nicely updated smaller homes in many neighborhoods, medium sized homes in very good condition in a few neighborhoods, homes that are a bit dated, and homes that need a complete overhaul.

It’s not yet clear why inventory is increasing in this price band, especially because there is less available in the $100,000s, the $300,000s and the $400,000s than there had been in June. Our guess is that buyers have slowed down on buying homes that need updating. It also looks like there are a few properties in the price band with quirks that will require waiting for the right buyer.

At upper West Hartford price points, sales activity continues to be taking a slower pace. There are many fewer listings with asking prices of $700,000 and the market dynamics are distinctly different.

Overall, West Hartford has had a strong year in 2013, and it will be interesting to see what kind of fall market develops in the coming months.

2013-07 West Hartford Transactions by Price

2013-07 West Hartford Listings Under Contract

2013-07 Active West Hartford Listings

West Hartford Stats: An Exciting Market

West Hartford has been one of the hottest real estate markets so far this year. Here are a few charts to show where it is as of the middle of the spring season. Data is for single-family homes and comes from the CTMLS, which deemed reliable but not guaranteed.

2013-04 West Hartford Transactions by Month

The number of closed sales has at least equaled the 2012 total in every month. Overall, 19% more deals have closed this year compared to the first four months of 2012.

2013-04 West Hartford Transactions by Price

The number of closings over the past 12 months has increased in nearly every price band. The jump in the $400,000s has been especially impressive.

2013-04 West Hartford Listings Under Contract

Demand for homes, as reflected in the properties currently under contract and waiting to close, is well distributed by price band.

2013-04 Active West Hartford Listings

Supply of homes is limited, averaging about 3.5 months of inventory. At price points below $500,000 the market has even less available for buyers.

What these charts don’t show is that prices are increasing in West Hartford. Because every property is different, and the mix of homes that sell in a given period of time is constantly changing, there is no easy metric that captures pricing accurately. But any (active) real estate agent can tell you that bidding wars are back, and that buyers need to have their act together in order to have a shot at getting an updated home in the middle and lower price bands.

April Contracts: Better Than Last Year

The Hartford County single-family housing market continued its strong spring. Overall, buyers and sellers agreed to 845 deals during the month, which is nearly 15% higher than April of 2012. The year-to-date number of contracts is more than 5% ahead of where it was at this point last year.

Hartford County Single Family Contracts in April 2013

Strong April performance helps support our view that the February result was an aberration. Both March and April finished with higher contract totals than any individual month since April 2010. Long time market observers will recall that the final Federal Home Buyer Tax Credit expired on April 30, 2010, so there was a huge push to get homes under contract that month, followed by the market flat-lining for the rest of the year.

The town by town table shows that inventory levels increased despite all the homes that went under contract. This time of year is the peak activity level, with both new listings appearing and deals coming together at a rapid pace. There continue to be towns with relatively few houses available for buyers, and very quick sales with bidding wars are common. On the other hand, there are also towns with lots of vacant properties and opportunities for buyers to get aggressive. Here are the stats for the individual towns.

Hartford County Single Family Contracts in April 2013 by Town

February Contracts: Yawn

February was dramatic and interesting; the market statistics brought something new and different to think about and interpret. There were 489 Hartford County single-family contracts, a 13% decrease from February of 2012 and a 10% decrease from January of 2013.

Hartford County Single Family Contracts in February 2013

As the month progressed, we felt that the market had noticeably slowed from the January pace. But it’s very difficult to know how much of what we see is specific to our current set of clients versus happening throughout the County. Running the numbers seems to show that our experiences were representative of the overall market.

Hartford County Single Family Contracts in February 2013 by TownDespite the step backwards in February, we continue to believe that the local real estate market is poised for a strong spring. The main reason February is unlikely to establish a new trend is that we were hit with a very significant snow storm near the beginning of the month. The storm shut down buyer activity for the good part of a week.

The storm also seemed to encourage sellers to delay listing their homes. 857 new properties came on the market in January of this year, compared to 684 in February – a 20% decrease. As a point of comparison, there were 860 new listings in January 2012 followed by 904 more in February 2012.

The slowing pace of listings shows up in the inventory numbers for the individual towns. We now have four towns with 3 months of inventory or less: Wethersfield, West Hartford, Newington and South Windsor. Less than three months of inventory is generally considered a seller’s market. Listing activity began to increase this past Monday, as the automatic searches we have set up started picking up more new properties to send out to buyer clients.

Spring will be good opportunity for sellers looking to move. Buyer activity and interest is up, and prices in many towns finally seem to be moving in the right direction. We’ve reported this in the past, and we continue to repeat it – bidding wars are back for highly desirable properties. Check in with your favorite real estate agent if you’re considering a sale to learn more about your specific situation.