Categorized | CT Real Estate

Real Estates "Chicken Little"

Barry Rosa, SVP of New Homes and Land for Prudential CT Realty has the dirt on the CT real estate market. Here is his most recent article on “Real Estate’s Chicken Little”:

Just about every economic disaster of monumental significance can be linked to a single word: panic. Headlines written in superlatives like, “worst, deepest, deadliest,” scream like air raid sirens day after day. Fingers point in all directions and the ultimate cause of the collapse, the pundits will tell you, was unchecked greed. The question will remain, who was supposed to be checking it?

Blame aside, the sky did not fall, but it’s pretty cloudy out here, and our ability to see clearly has moved us from panic into paralysis. People with the means and the desire to buy a home are stuck in neutral with no idea whom to trust or where to start. The best advice I can give is to STOP reading national news about real estate and start researching your local market statistics. You’ll find that Connecticut is in pretty good shape.

Here are some important facts about Fairfield County’s real estate market derived from October and early November statistics for 2008 compared to 2007:

Sales are down year over year, but homes are selling. In fact, in Fairfield County, there have been about 6,500 single-family and condo sales through early November of this year. This is about 60% of last year’s number. A decline, yes, but not a “collapse.” There are also about 1000 single-family and condominium properties under deposit (about 75% of which will close) that are not counted in this number.

There is another market indicator that you will rarely find reported: The relationship between inventory, sales and deposits. This is a very important barometer on the health of the market. Longer supply times suggest a weaker market; shorter supply times generally mean the market is stronger.

Fairfield County does not have an excessive inventory of existing or new homes. The current supply of homes (both single-family and condos), together with the rate of sales and current deposits, shows there is about a nine-month supply of single-family and eight-month supply of condominiums on the market.

The same advice holds true for misaligned price comparisons. People waiting for the sound of prices slamming to the bottom would do well to ignore national headlines proclaiming 20, 30 and 40 percent price drops, and pay attention instead to the age-old principle, price follows demand. The overall median prices for single-family homes and condo units have declined from last year, but only fairy tale writers would employ a verb such as “plummet” or “crash” to explain the shift.

Here are the numbers for Fairfield County: The single-family median sales price in 2008 is $530,000 vs. $580,000 last year, and for condo units it is $294,000 vs. $295,000. This is a decrease of about 9% for single-family homes and the condo median sales price is essentially unchanged. Average marketing times are currently in the 135-140 day range.

The economic projections are still cloudy for the near future, but the sky is still above us and there are some very good opportunities in the real estate market. Money is tighter, but mortgage rates are still low, and there is a first-time buyer tax credit of up to $7,500 available through July of 2009. The fact is that homes priced correctly based on credible sales data to be “in” today’s market, will sell. Homes that are simply “on” the market ¾ meaning they are priced arbitrarily to test the waters ¾ will not.

In the fairy tale Chicken Little, a pebble falling on a single chicken’s head drove an entire barnyard of feathered followers into the fox’s den, and it took a wise king to find the pebble and put the fears to rest. In real estate, relevance is king. Your real estate market is the one to watch. And if you’re watching Connecticut, you’ll see, it’s a good time to buy. For more information about the Connecticut Real Estate Market, visit: http://beta.prudentialct.com/specialproperties/nhl/marketreport.asp to see statistics for all towns in Fairfield County as well as the state of CT.

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to “Real Estates "Chicken Little"”

  1. Market Satistic for Enfield…as of 12/12/08

    -178 Homes for Sale

    -193 Homes Sold in the last 6 months ( Since June 10, 2008)

    -Median Sales Price- $185,000

    -$224,397 is the Average Listing Price in Enfield

    -Average Price per square foot= $118.00

    -45 Current Lis Pendens

    Enfield remains stable,. Average Days homes stay on market is 78 days.

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