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Buying Versus Renting

Buying Versus Renting

With pressure on pricing in Fairfield County, Connecticut, the question of buying versus renting needs to be asked. Jeff Jensen, our Mortgage Officer from Connecticut Home Mortgage covers some compelling reasons to own:

Every once in a while it is wise to briefly re-visit the age old question, “Is it better to rent or to buy?”  Having just experienced a significant correction in housing prices, now is a good time to compare.  On the surface there are some apparent benefits for each choice.  I have listed a few below.

Renting Advantages

  • No need for large cash to put down
  • No costs to maintain the property
  • No equity losses
  • You can move at the end of the lease without having to wait to sell
  • Do not have to come up with tax payment during the year

Renting Disadvantages

  • No tax benefits
  • No equity gains
  • No control over annual rent increases
  • Possibility of eviction
  • You may be limited in making changes to décor, paint colors, etc.
  • May have to live with other tenants
  • Reliant upon landlord for repairs and upgrades

Buying Advantages

  • Property could build equity and wealth
  • Mortgage interest is tax deductible
  • Property taxes are tax deductible
  • You are free to decorate as you wish
  • You may choose your own exterior plantings and design
  • You don’t have to get approval to make repairs or upgrades
  • Your monthly payment is fixed with a fixed rate loan and will not go up every year

Buying Disadvantages

  • You have to pay the property taxes when due
  • You have to pay for any maintenance and repairs
  • Your insurance will be higher
  • In order to move you will have to go through the process of selling the house or carrying two places to live
  • You are fully at risk for the value of the house.  You could lose equity.

For analysis of renting, one should consider that prior to arriving at the asking price for the monthly rent, a landlord will consider the ongoing costs of the property.  Initially he/she will make sure that the rental income covers the “monthly nut” which typically includes the mortgage payment, monthly property tax and monthly insurance.  Then most landlords add an allowance for maintenance based on their experience with rental units over the years.  The result is that, although the tenant is not paying for the property tax or the homeowners insurance or maintenance and repairs per se, those items are essentially being included in the monthly rent.

Historically property values have risen in this country at a rate far greater than inflation.  Each property is unique and has its own value attributes and shortfalls.  Property values trend differently on particular streets, sections of town, towns and cities and sections of the country.  Despite the recent “bubble”  in housing prices, most homeowners who purchased their homes in 2003 and earlier have built equity in their homes.  For homeowners with modest incomes and without the benefit of substantial savings or investment accounts, home ownership may be their greatest opportunity to build wealth for their families and/or their retirement.  Downsizing is a popular trend which allows homeowners to realize gains in property value providing funds for retirement while reducing their monthly costs.

Now that homes appear to have stopped  losing value in many areas of the country, a great opportunity has been created.  With homes at their lowest values in year and interest rates at their lowest levels ever, the argument for homeownership is compelling.  There are programs available which allow buyers to purchase homes with as little as 3.5% down and even with “0” down for special category loans.  Those who have 20% of more to put down can purchase without the need to pay monthly mortgage insurance.  Look at the comparison below to compare owning and renting a $300,000., 1,400 square foot house.


Buy Rent
Monthly Payment $1,146.00 $1,950.00
Monthly Property Tax $450.00 $0
Monthly Insurance $80.00 $40.00
Down payment $60,000 $0
Interest $0 (50)
Net Total Payment $1,676.00 $1,940.00
Amount Deductible $14,923 $0
Net Tax Savings $3,730 $0
Monthly Savings $310.83 $0
Net After Savings $1,465.17 $1,940.00
Extra Monthly Cost $0 $574.83 x 12=$6,897 per year


The example above assumes a buyer in the 25% tax bracket.  Thebuy figures do not any allowance for maintenance but an annual savings of over $6,000. should more than cover any maintenance costs encountered.  With home prices as low as they are currently, the argument for buying over renting has never been stronger.

Posted in CT Real Estate, Fairfield County Real Estate, Weston Connecticut Real Estate, Westport Connecticut, Westport Connecticut Real Estate, Westport CT Rentals, Wilton ConnecticutComments Off on Buying Versus Renting

Timely Price Reductions And Standing Out From The Crowd

Timely Price Reductions And Standing Out From The Crowd

I always wax nostalgic during late August and early September.  It reminds me of new school clothing and the excitement of seeing friends again. It also reminds me of renewal and new opportunities.  In real estate, it has a similar cycle, one of breaking away from the general malaise of summer into fresh opportunity.  Coming into September brings hope to sellers for a new batch of buyers and excitement to buyers for a new batch of listings, or at least listing reductions.

So, let’s talk about reductions and what happens during the summer in a typical year. We experience a slow-down in new listings and the market generally reflects the distractions of Summer. Sellers who had such excitement at the prospect of the Spring market may now become victims of the Summer. Despite possible signs of pressure on pricing they often hesitate because of lack of showings and the fear of making an unnecessary reduction.

The energy shift begins to take place in early August as sellers begin to think about having their home on the market during the holiday season and the countdown to of the end of the year.

September immediately becomes a popular month to reduce, resulting in an overload and the fight for attention.

So, we have two weeks before the crowd of reductions for those sellers who want get to the finish line before the end of the year.  Buyers are out there looking for value. They track the market and watch for the reductions that are significant and home prices that are compelling.

It’s easier to get ahead of crowd and secure the attention of your potential buyer by making reductions earlier. Why not be one of a few making reductions now versus fighting the crowd of adjustments that are about to take place in two weeks?

Posted in Westport Connecticut, Westport Connecticut Real EstateComments Off on Timely Price Reductions And Standing Out From The Crowd

Latest Market Statistics From Westport Connecticut

Latest Market Statistics From Westport Connecticut

It’s been a very strange market in Westport, Connecticut.  I was talking with an attorney yesterday regarding what he is seeing. We are all experiencing more pitfalls along the way from binder to closing than ever before. Stricter lender guidelines and appraisals are taking center stage in the transactions, impacting buyers and sellers. Despite the bumps and buyers generally having the leverage in the market, there are still price ranges that are readily selling and in some cases, in multiple offer situations. Well-priced, well-conditioned homes are being sought after by buyers where the inventory has been picked over.

Properties under $700,000 are selling within a reasonable time frame with a healthy balance of 6 months of supply. For some reason, $700,000-$749,000 is sluggish with 72 months of inventory. $750,000-$899,900 is balanced but the brakes get slammed on sellers between $900,000-$999,000 with over 42 months of inventory. This could be the glut of listings that were initially above $1 million but are now reduced. $1 million-$1,399,900 is somewhat balanced at 10 months. Historically, this would be considered an oversupply, but it appears to be closer to the new norm. $1.4-$1.499,900 is another slow moving price range with 33 months of supply. $1.5-$1,899,900 is being absorbed along with an average of  9.5 months of supply and $1.9 and above is seeing extended days on market supply ranging from 14 months to 54 months.

Despite some of the inventory numbers, the average “days on market” is 121 which is not far from what we have experienced historically. The median list price is $1,199,000 and the median sale price is $1,081,250. The median price on active listings is $1,630,000, the median on bindered properties is $1,186,500 and the median pended (contracts) price is $1,299,000. The median price of sold properties in the past six months is $1,199,000. As we know, the median is the middle of the market, so right now, it’s more favored toward the lower end.

The best advice for sellers is to price aggressively against the comparable homes. And, for buyers to be prepared to move fast in the the lower price points, especially with well-priced, and well-conditioned gems. There is still opportunity for both buyers and sellers, but it’s important to know the details of the market.

Posted in Westport Connecticut Real EstateComments Off on Latest Market Statistics From Westport Connecticut

Buying, Selling Or Renting In Fairfield County Connecticut? Contact Us At (203)253-9222

FreshPickedRealEstate.com is known as "Fairfield County CT's Favorite Real Estate Blog". We feature market statistics, community events and interesting happenings in and around lower Fairfield County Connecticut, including Westport, Weston, Wilton, Norwalk, Fairfield and Easton. Look for real estate tips with a focus on "green living" in the area.
Contact me at MelissaBrownRiley@gmail.com or at (203)253-9222 for info on all real estate services, including buying, selling or renting in Fairfield County, Connecticut or in any other county or state through our national network. We also specialize in buying or selling "short sales" and foreclosures.

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Luxury Rental Listings Are Needed

Fairfield County, including the towns of Westport, Weston, Fairfield, Easton, Wilton and Norwalk are highly desirable towns for rentals.
We are experiencing a lack of quality luxury rental listings in lower Fairfield County. We have tenants looking for rental properties that fit their needs.
We will assist you with establishing the rental value on your home and helping you through rental process. Proper representation is the core of our business and I we zero in on your needs no matter if you are landlord or tenant.

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