Pearce Day of Caring

Last Friday was the latest annual Pearce Day of Caring.  It's my favorite day of the Pearce year, and this year was no different.  We met at Connecticut Hospice for the second year, and again did all kinds of indoor and outdoor work.  We enjoy the chance to give back to a non-profit that does so much good in our region for so many patients and families, and it gives us the feeling of improving the lives of those people also.

It was a beautiful day, and the CT Hospice is a gorgeous setting.  The agents and staff work like dogs, though, and aren't spending much time looking out at the Sound, until we finish and gather for pizza.  I'm always so proud of our team, and never more than on Day of Caring.  They are there because they want to be, and they show up in force to help out.  Even those who are unable to do physical labor volunteer in the office, putting together programs for Hospice's annual memorial service for the families of those who have died at Hospice in the past year.  As I said to someone I interviewed today, "It's who we are."  And it's true.

Hartford's Buyers' Market

Hartford is currently listed number 9 in the list of the best markets in the country for buyers.  To put that in perspective, Phoenix is listed as one of the hottest sellers' markets.  So what do they really mean?

The people who compile these lists rate as a buyers' market anywhere where prices are not rising, where homes sell below the asking price, and where the median home in on the market longer before selling.  Now think about what that could mean.  In Phoenix, where everyone knows that there are tons of short sales and there was a huge oversupply of homes built, with declining values and high rates of foreclosure, sellers are very realistic.  They may even expect to lose money.  Also, many people have seasonal homes there, in which they are less emotionally invested, and may just be willing to dump them to be done with things.  They may rate outside advice more strongly, since they may not be Phoenix natives.  And they know that they are competing with banks and corporations as non-emotional sellers.

Now compare that to the Hartford area.  Most homes are primary homes, with owners living in them and feeling strongly about their value.  There was not a great deal of building down in the prior decade, nor were there daily articles in national news media about the poor market and the high foreclosure rate.  Most foreclosures, since Connecticut is a law state (meaning that you must go through the legal system to foreclose), are still in the works.  Finally, prices went up in the past decade and a half, but not like they did in the Sunbelt, where jobs were growing and the economy was expanding.

Then, add in the factor that every home is different, so its value is subjective, and it is not a commodity (although it may have gotten close in the Southwest).  It's not like buying a Honda here versus in Arizona; you are not comparing apples to apples.

However, numbers don't lie.  Sellers here have not been as willing to drop prices or make concessions, so their homes have not sold.  Buyers have chosen to rent and wait for values to bottom out.  Also, they have probably been less inclined to put their homes on the market for what they are truly worth, since they are still hoping to get out whole, and, often, to buy another home.

When will things change?  Either the market will get much better, and, like a rising tide, raise all boats, or prices will come down until those homes that have rusty For Sale signs out front are all gone.  But it does seem like a stretch to say that sellers are better off in Phoenix than in Hartford, overall.  Like much of life, it's just not black and white.

An Idea to Move the Market

Much thought and discussion went into the enactment and extension of the first-time homebuyer tax credit, and it clearly impacted the market, both while it was in effect, and after it expired. It moved sales for last year into the first half, and the immediate drop in activity and sales beginning last July proved that it motivated people to buy before it ran out.

Although I have my issues with that credit, both in terms of policy and in practice, there is no question that it made a difference while it was in effect, and that the market responded. It is also clear that the jump start that the government must have hoped that it would give to real estate did not occur, as sales fell off as soon as it was over. In retrospect, I think that the government was right in thinking that we needed that kind of stimulus, and I think we need to try again. After all, cash for clunkers helped the auto industry, the TARP money helped the financial industry, and real estate is still lagging. It is hard to imagine any real recovery taking place without our industry improving.

My problem with the first-time homebuyer credit was that it aimed at exactly the people who would buy in any type of market: those forming households; and renters with no homes to sell. One of the main problems with the current market is that it is stopped up, because sellers who can sell refuse to do so, because they feel that they are losing equity, even though that perceived equity may have been phantom gains.

In order to give an incentive for those who can to sell now, and to buy something else, I propose that the government offer a one-time tax credit for sellers who will lose equity when they sell, on the same terms and up to the same amount as the first-time credit. So, for example, someone who paid $200,000 for her house and now is selling for $180,000 could deduct up to $8000 on her tax bill this year. I believe that the market may now be ready for the jump start that such a program could provide, and that it would help even more than the last incentive, since it would both produce a supply of homes for others to buy, and sales for developers and other sellers when those people buy a new place to live. It's time for bold action, and helping the housing industry would be good for everyone.

What's a Compelling Price?

I have often been asked lately about pricing properties to sell quickly. Since things aren't selling quickly, and not much is selling at all, it's hard to know whether price is really the issue, and whether lowering it will change the outcome. We worry sometimes that, in advising people to lower their prices and get out and move on, we are helping to reduce prices across the whole market.

That's a hard question to answer. While we clearly have an influence on prices, ultimately we don't make sellers sell or, more importantly, buyers buy. So what we've come up with to explain the phenomenon is the "compelling" price. That may not be the highest price (most likely not), and isn't arrived at by figuring out what the property is worth. It's determined by figuring out the number needed to get other people to move, and move urgently.

Think about that in your own life. If you see a sale notice, you may glance at the prices in a flyer. Sometimes you look at one and decide to wait until the price goes lower, or the season ends, or something along those lines. Every once in a while, however, you look at an offer and just know that, if you don't act soon, you won't get whatever it is. That company has discovered the compelling price. Not necessarily the lowest price--that might raise doubts about quality or value--but a great incentive to buy.

So think about the real estate you know. Is it priced compellingly?

Not the Typical July

The weather surely signals that it's midsummer, but the slow start to the real estate year means that the dog days of summer have a little more life to them. We are still seeing new listings, new offers, and new sales. Our web hits doubled from May to June. There was a downward blip for the Fourth of July, and then they went up again. People are clearly thinking about buying and selling, even if every contract seems a long and tortuous process.

On that note, I was spending the weekend in Vermont last weekend with a friend from North Carolina. She was trying to close the sale of a commercial building, which she had sold already once and it had fallen through. She was in negotiations with the new buyer on the day before what was supposed to be the closing. Her husband was bemoaning her travails. I told him that MOST commercial contracts seem to fall apart at least once, and that it is, unfortunately, very common for the buyer to come back at the last minute and ask for concessions, often due to financing conditions. Even in residential, we have a number of contracts now that seem to have taken on a life of their own. They go on and on, with delays, threats, changes, grandstanding, and probably tears. I'm telling you this so you won't take it personally if it happens to you! Forewarned is forearmed.

Is Madison, Wisconsin Leading the Way for Us?

As most of you know by now, I belong to a group of large independent real estate companies around the country. Some are in big cities, but most are in smaller cities (although bigger than New Haven or Hartford). For some reason, Madison, Wisconsin seems to be the most like our region. Dave Stark, the owner of Stark Real Estate there, and I have discussed this, and it's likely to have a lot to do with the employment base. They have both the state capitol in Madison, and the University of Wisconsin, and those are the two biggest employers. If you didn't know that before, you weren't watching the state workers picketing the Madison capitol!

Having a lot of non-profit and government workers in a region usually makes the employment situation steadier, as well as the use of commercial space. Universities and governmental bodies think in terms of decades, not months. Also, you don't often have the boom times that you would find in Silicon Valley, say, or Wall Street, or even a smaller place where a large manufacturer might open or expand a facility.

Therefore, I thought it was very good news last week when I received Stark's quarterly mailing. While they had the same horrible first quarter that seemed to prevail everywhere, the recent signs have been encouraging. They see lots of pending activity, and increased interest in real estate. I hope it gets here as fast as a big storm seems to do!

More Reasons to Buy Now

The Wall Street Journal this morning had one of the most positive articles about the current real estate market that I've seen in a long time. They said that, if you take out foreclosures, the real estate prices are really off less than 1 percent from a year ago, suggesting that we are at the bottom of the market. In addition, mortgage rates are near a 50-year low, and the ratio of housing prices to income is over 20 percent better than the fifteen-year average. Although household formation rates have fallen recently, the aging of the baby boomers portends an uptick in home purchases and second home acquisitions over the next number of years. They even went on to say that most people still want to own homes, even discounting or ignoring the investment value, because of control over their environment and access to schools and other amenities. They predict that prices will start to climb soon.

All of this seems to indicate that now is the time to buy. It never pays to try to find the low point at its exact nadir. All indications say that we are now close to that point, and therefore buyers should be rushing out to buy. The article does talk about the new difficulties in qualifying for and obtaining mortgages, but there are many other people who simply aren't buying because they are worried about the future value of their investment. Do those people not worry about the stock market? The bond market? The value of art and antiques? In fact, do they sleep at all?

It seems clear that we need to continue to convince buyers that the time to act is soon. If not today, then later this week or month!

Memorial Day Memories

Because it's Memorial Day, I've been thinking about my parents. Although my father wasn't a veteran (because he was in management at a defense plant), my mother was in the Women's Army Corps as a nurse. I've gotten a lot of requests for copies of the eulogy I gave for my father last month, which is subtitled "Nine and a Half Decades in Nine and a Half Minutes". Here it is:

I remember two things about my father’s term as President of the CT Association of Realtors. The first was that he brought the President of the United States to speak at the state convention (which almost didn’t happen because, when the advance team called our house, my sister thought it was a joke and hung up on them). The second memory is of his stump speech at Realtor dinners around the state. It spelled out REALTOR, beginning with R is for resilience, and going on to E for enthusiasm and A for attitude. In his typical double-time style, he raced to the end, leaving out a different letter each time. My mother would say, “Herb, I’m not going to drive around the state to listen to you misspell Realtor.” And he would reply “But you’re the only one who notices.” I used to think that was because they were partying and not listening, but I now realize that, if you knew my father, resilience, enthusiasm, and attitude said it all—the rest was unnecessary. I’ve spent much of this week reflecting upon what made him so special, and why everyone here has a Herb story, and I think it comes down to three gifts: a gift for life; a gift for friendship; and the power of positive thinking.

His gift for life began at birth in NYC, though the family moved to New Haven when he was a baby. His father came to work on the Yale Bowl, then started his own construction company. My father, living in North Haven, rode the streetcar to the nearest school in New Haven, stopping at the pool hall or the movie theater too often to have been a scholar. His favorite childhood memories were of driving his parents’ car through the corner of Church and Chapel when he was 14 and they were away for the weekend, and of saving up all year to go to Savin Rock for an evening. His father lost his business during the Depression, so my father went to work for A.C. Gilbert, whose paper boy he had been, for .25 cents an hour ($10 a week). He rose quickly through the ranks, and was deemed crucial to the war effort when they converted to a defense plant, having 2000 people reporting to him when he was 27. After the war, he had a very active social life before his marriage at 37—he was engaged three times, or, as he put it, three women thought they were engaged to him. One was a star in the Ice Capades, but he skated quickly away. He got a form of polio in the early 50s,and met my mother during his lengthy hospitalization. He decided to start his own business when I was a toddler and my sister was a newborn, using his severance pay to buy my mother a mink stole. He worked all the time in those early years. My sister and I remember helping him to clean the office on Saturdays and riding around in the trunk with the open house signs on Sunday. He was a whirlwind of activity—sales, charitable boards, a brief run for Congress, state delegations, and more. The best story I’ve heard in the last week was a call he made with a friend to a big company for the United Way. The man told him that everyone was human, and that we all put our pants on in the morning one leg at a time. My father said “Not me. I put both legs in at once, pull them up, and get going.” There was no time to waste. He rented a bike on his first trip to Europe rather than tour the tulip gardens, as he remarked that, if you’ve seen one tulip, you’ve seen them all. This applied to our family as well. When I graduated from law school and business school, he declined to come to graduation, stating that if you’ve seen one Harvard graduation, you’ve seen them all. This lack of sentimentality carried over into other realms. My sister’s horse was named Prince, and he painted her horse trailer “The Prince and the Pauper”. He told me that Norm and I couldn’t get married before 4 PM, since “there’s no sense in ruining a perfectly good golf day.” (note the time of this service). The only word of Spanish he learned in all their travels to their house in Spain was manana, and he didn’t like it. But he enjoyed every day to the fullest—every hamburger was the best one he ever ate, every occasion was a party (and he was the guest of honor), and there were wonderful opportunities everywhere.

He never had regrets, and he rarely looked back. One of the few times was when he told me that he’d like to find his Uncle Frank, who had emigrated to Canada. This was a few years ago, and I asked him when he had last heard from Uncle Frank. He said that it thought it was about 1920! He had every faith that we could track him down. Needless to say, Uncle Frank had died, but we found his son—my father’s first cousin—in Saskatoon. He was also forward-looking about change of all kinds. He was proud of being the first in the real estate industry to run billboards, full-page ads, radio and TV commercials. He had a car phone in 1968, when you had to go through the marine operator to place your call—totally impractical with a five-minute commute, but so typical. At the end of his life, he had a Facebook page and an IPOD shuffle (although he called it his “music box”).

Part of his exuberance was because of his gift for friendship. He loved his friends of all ages, old and new. His strong handshakes, big kisses, the spring in his step, and the twinkle in his eye will all be remembered as hallmarks of his entrances. The phrase “comfortable in his own skin” probably wasn’t around for his first 75 years, but boy, did it describe him. He never felt superior or inferior to anyone. Think of the self-confidence it took for a high school graduate who didn’t go to war to marry an Army nurse with two graduate degrees. He had friends who were professors and friends who were laborers, friends in their 20s and friends in their 90s, and he treated them all the same way.

He delighted in doing things for his friends. My mother said that, if she ever came back, she’d want to come back as one of Herb’s friends. He loved to plan presents, parties, and pranks, as well as serious endeavors. He was born before women could vote, yet was asked to nominate Jean Handley as the first woman at the Quinnipiack Club. He waged two campaigns to integrate the New Haven Country Club, succeeding the second time. He made everything possible, and everything more fun.

And that was due to his third gift—the power of positive thinking. Buck has mentioned his optimism, and he had that in spades, but that’s a disposition. Attitude is a willed trait. He believed that there wasn’t much that couldn’t be changed with a change in attitude. He applied that to his personal life first. When my mother died, we were worried about him, after finding him sitting in his office crying. A few months later, he told my sister and me that he was 81, and he could curl up and die, or he could decide to love again. He then met Martha, and had 12 and ½ happy years with her.

He applied it to his community work as well. He loved to raise money for non-profit causes, and he didn’t mind asking, nor did he waste time doing it. He planned and executed ambitious campaigns, and took great pride in the good that they did.

He used to say that some people had MBAs, and he had RLC—rat like cunning. But he also thought big, and lived that way. When he was in his late 60s, he and Don Lippincott developed Exit 9, building a bridge and road and selling them to the town against future tax revenues. At that age, he risked everything—putting up his house, his insurance, and signing personally on the notes. How many of you would do that? And he turned around and did it again in his 70s with Whitney Grove Square. When his partners went bankrupt, along with the contractor, he put in millions of his own money to finish the project, losing all of it. When it was sold years later to Yale, he sold the garage to Simon Konover in probably the largest deal in the region ever done on a handshake. Accountants called WG a failure, but he never did. He would have said that he changed the landscape of New Haven, cemented it as a residential city, paved the way for the Audubon Arts District, and arguably moved the center of commerce up from the Green. He was very proud of it, and proved it by moving there.

He always said that, if all else failed, he could be a bartender. He carried that attitude through everything he did, and it was infectious. The next time you are in a tough situation, think of him and try a little harder. Dig a little deeper. Improve your outlook. Make lemons into lemonade. You’ll be channeling Herb, and ensuring his legacy.

It’s ironic that he died on the day of the Boston Marathon. His life was a marathon, spanning almost a century, and it was surely a race that he won. He would have received a gold medal for the number of times he showed up on the short list of life influences for those who knew him. So many of you have described him as the embodiment of the greatest generation, and as a giant—a funny description for someone who weighed 120 pounds, but he was. He was also eminently lovable. In his case, the whole was greater than the sum of the parts—something about the almost magical combination of personality, character, and presence allowed him to leave an indelible imprint on more lives than almost anyone I’ve ever known. All the sayings are true—an edition of one, he came one to a box, they broke the mold. We will not see his like again.

The marathon that he ran for the last two years was one that he knew he couldn’t win. And like an athlete with a serious injury, he didn’t try to fool himself. He fought while he could, confounding his doctors with his staying power, and Martha kept him alive for a long time, by guarding him ferociously and loving him so deeply. He went out as he wanted to—calling a family meeting on Saturday night to plan this service (when he didn’t appear to be sick), kissing all the Hospice nurses by Sunday night, and dying on Monday night. It may surprise you that the man who never said die died peacefully, with grace, and gratitude for the life he lived and the people he touched and who touched him along the way. He wrung the very most out of that tired old body, but his indomitable spirit lives on in all of us, in the company he founded, and in the people and places he made better. He wanted us to celebrate, not grieve, so there’s a rousing recessional hymn and birthday cake at the Lawn Club (he would have said that 3 days til his 95th was close enough for government work), as well as hundreds of balloons emblazoned with the names of organizations he supported, students who received his scholarships, and his favorite Winston Churchill saying: “We make a living by what we get; we make a life by what we give.” Please take one as you leave the reception, and release it somewhere in Greater New Haven. It’s hard to imagine him resting, let alone in peace; it’s easier to think of him as being on to the next great adventure. If you close your eyes, you may be able to imagine him bounding into heaven, booming “I LOVE IT!” And, if you do, just whisper back, “No more than we loved you.”

Financing Woes

There has been plenty of discussion about what's wrong with the real estate market. We've been through a few years where the focus was on what was wrong with the banks, and the government put in a lot of money to make sure that the problem got fixed. Somehow, the banks are now rolling along with big profits. It would be too much to say, however, that they are rolling along just as they did before. There are numerous new rules and regulations, intended to prevent the same thing that happened before from happening again. This time, though, it is the same taxpayers who paid the bill for the last fiasco who are being harmed. The banks are passing the consequences of those new rules along to the consumers. I'm not saying that this is necessarily wrong, but what's happening is that real estate is suffering, perhaps disproportionately, for what went on with the banks in 2008 and 2009. Where before people could, and did, finance 97% of the purchase price of a home (yes, that was the median financing amount in the boom years), now they have to put down 20% in many cases. So, of course, real estate sales have slowed.

The answer is not that we should all go back to financing the whole cost of a real estate purchase. However, our economy will clearly not recover until people have jobs and until real estate, which represents the biggest asset class most people own, bounces back to normal. Not where it was before, but to normal--that's all we're asking. In order for that to happen, we cannot spend all of our time trying to fix the last problem, and we may have to put in some money and effort to boost sales through this period. It's not enough for banks to make money again. The whole system is bogged down, and it has to be jump-started. Now.

Will It Ever Stop Raining??

You must wonder what IS good for real estate, if we complain about snow and we complain about rain and we complain about heat and we complain about sunshine, but the truth is that people look at real estate when the weather is good but not too good. There is a human aversion to getting wet (although my dog seems to share it...) that keeps people indoors when it's pouring. There is also a natural tendency to want to go somewhere outdoors when the weather is beautiful. That leaves in between days to shop for property. Rain may be better than snow, because it doesn't fill up your driveway, and both are probably preferable to ice, but nothing that causes gray skies is ideal for showing property. Not too much looks good in gloomy light.

So we know that we're not the only ones wishing that the sun would come out, but we have our reasons. And they just add to all the other reasons that we--and you--are ready for spring!

Evening Open Houses?

I have an idea on which I'm interested in input from the public. We have traditionally done almost all open houses on Sunday afternoons. That isn't true everywhere in the country, since I have noticed that, in Arizona, Saturday seems to be just as common as Sunday. There is an historical logic to the current pattern, since people were usually less busy on Sunday afternoons. The idea of going to open houses seemed to fit in with the practice of taking Sunday drives.

Today's world is different. Children's sports, in particular, take no holidays. Sunday afternoons may be as jam-packed as any other day. In addition, weather is a huge factor. All real estate agents know that there is a bell curve for attendance--if the weather is too bad, no one comes, and, if the weather is too good, no one comes. For busy people, a great day may just be too precious to pass up.

So why not vary the routine? If you are like I am, you may prefer to squeeze in all you can into the work week, leaving bigger blocks of weekend time for other things, especially outdoor activities. In this season of extra light, we could hold open houses late in the day, and interested parties could stop on their way home from work or picking up kids. Even for commercial properties, this idea has appeal. Many owners and managers are too busy to take time out to look at space during the work day. We could serve wine and cheese, and let people take their time after the end of the work day to explore real estate options. Even agents would benefit, as it would leave weekend time to work with buyers.

We have tried this a few times, at least in residential, but it hasn't caught on. I'm curious as to why it has not. What do you think?

Real Estate Around the Country

I just returned from my semi-annual meeting with other large independent brokers from around the country. This time, we met at Lake Lanier in North Georgia. The weather was great, but the real estate climate is, in some respects, sobering. National experts are saying that equal supply and demand and a "normal" market may come as late as 2015. Sales for the first quarter were down around the country, in double digits. Some of that was weather-related, but the rest is still about jobs and financing issues.

There is a silver lining, though, and it's a big one. The interesting news was that prices of sold properties were up by a fraction, 1% or so. This is counterintuitive, if you think about the effect of foreclosed properties and short sales on the value of homes. What it seems to suggest is that it is the best homes (not the most expensive, but the most desirable homes in every price category) that are moving. What that means for sellers is that homes must be put on the market at levels that seem to be good values.

What it means for buyers is even more important. There aren't great bargains out there, at least on homes that are well priced and well maintained. Putting in a lowball offer isn't going to result in a purchase. It goes back to the old saying "You get what you pay for". If you want it, you're going to have to buy it at its value, and not at a fraction.

We just had an offer on a commercial property with a listing price of $2.1 million. Someone submitted an offer of $700,000. That's just wasting everyone's time. The statistics seem to indicate that the short sales and foreclosures aren't yet changing prices on regular properties, and given what we are experiencing in delays on such sales, we can vouch for that. Those things are backed up in the pipeline. What's moving through are the good deals, but they are good deals at good prices, not bargain basement fire sales. Buyers should assume that they won't get what they want if they insist on bottom fishing. It may be a sport, but it's not a strategy.

Realtor, philanthropist Herb Pearce dies at age 94

To read the New Haven Register article, access it here: Realtor, philanthropist Herb Pearce dies at age 94

You will be missed by all, you were loved by many and you will be remembered forever.

Listings Flying Off the Shelf

After a long, long, long winter, we're seeing signs of spring! And that includes the spring market. I'm starting to get lots of calls from people connected to Yale, who've gotten their job offers and are beginning to look for housing here. We are entering lots of new listings into the system--several dozen in New Haven alone last month. And, at long last, some of the suburban inventory is moving. I heard last week that a spate of sales in Pine Orchard has reduced the available inventory drastically. Even things that have been for sale for a very long time have gone on deposit. That's good news for sellers, who have been consoling themselves with the thought that nothing was selling, while they sat with their houses unsold. If they aren't going now, it's time to re-examine the price, because we're experiencing a boost that should help everyone. And it's about time!

Referrals Everywhere

It's been a busy few weeks for people calling me to ask for help in selling real estate here and elsewhere. After all the talk about the Internet as a way to sell real estate oneself, and all the fears about the demise of our profession, it's heartening to see how many buyers and sellers out there know that they can use our help profitably. Even though all the studies show that the vast majority of transactions are done through real estate companies, there is a perception that that time has passed. It is true that the information buyers need can now be found online in many cases. What isn't true is that buyers don't need assistance in interpreting the data, in learning about a region, and in structuring an offer. And sellers are much the same. I've heard some talk about using Zillow to price a property, although it is very unreliable in certain areas. I've also known people who do their own marketing and even open houses. Much more often, though, I've heard people say how much they value having an intermediary in the negotiations, especially when they know the other party. What would seem to be an advantage--familiarity with the other side--makes most sellers and buyers very uncomfortable. The addition of professionals is highly comforting. At a time when saving money is chic, the use of real estate agents and agencies is a clear sign of their value. And you get what you pay for. As they say about lawyers ("he who represents himself has a fool for a client"), so goes the saying for sellers and buyers.

Double Dip Fears

Lately the papers have been full of talk about the possibility of a "double dip" in real estate sales. What some experts worry about is that current economic conditions will cause real estate sales, which had started to creep up, and values, which had not fallen as far as had been feared, to go down once again. The curve would then look a little like a W (although the anemic recovery would suggest that it might be more like a U, bumping along the bottom). The worst case scenario would be a V, with two downward slopes before any rise. Should those fears affect what consumers do this spring? I'm going to argue that those worries should not determine short-term behavior. In fact, if consumers step up to the plate and buy, they will actually cause the real estate market to improve and avoid the second drop. Even if units do go down again, however, we need to look at the facts in our region. Prices didn't go way up here, and they shouldn't dive downward, either. In addition, our non-profit engines are still strong, and should keep sales from plunging. Even if there isn't call for wild optimism, normal buyers should be fine, as long as they don't plan to flip their properties too quickly. The market seems to be taking care of that possibility, as more people rent until they are secure in their jobs and locations. To make a comparison, suppose that your car was old and needed replacement. Even if you thought that prices might come down for cars in another year or two, would you wait? Really? Or would you move ahead with your life, and enjoy the peace and security of owning something you valued, knowing that giving up a little in resale value is worth it in the overall scheme of things? I would bet on the latter course. I'm hoping buyers agree this spring.

Almost Too Late to Beat the Spring Rush

Everyone knows that more homes get listed and sold in the spring season, mostly because of school schedules. People either start jobs at the start of an academic year, or want to have their kids into new schools by September. What isn't as settled by all experts is the ideal time in which to list during that season.

I'm a firm believer in the earlier, the better. It's hard to know exactly when the market will pop, but there are certainly signs already--lots of ads, lots of open houses, lots of calls. If you are a seller, you want to have your home on the market before all of the sales activity really begins. It takes time to get the paperwork processed, get the home ready, and set a price. If possible, you want to list before the vast majority of people do, so that early lookers will see your home when there aren't as many places from which to choose.

We don't know when the snow will stop for good, nor when the temperatures will really start to climb. We do know the school vacation schedule, the holiday schedule (and Easter is very late this year), and the traditional boom times. In our company, we believe this: It's best to begin right now. If you are thinking of selling, call your agent today!

Adding Value to Luxury Listings

Today's New York Times had an amusing but informative article today about things people have done to raise the prices on their properties. Perhaps the most extreme example was a seller who regrouted the bathroom tile and added $100,000 to the estimated value of the listing, on the theory that cracked and dirty grouting would tend to make buyers think that they would need to do a major bathroom renovation. Another broker told of a client who changed the kitchen cabinets and repainted, thereby getting an offer $100,000 higher than the broker had anticipated.

Most of the examples involved big dollars, but obvious pointers: Get rid of the clutter. Clean the rugs. If you are a landlord, put in new appliances. Replace towels and bath mats with fluffy new ones. Improve the lighting. We all know these things, but it's sometimes hard to think objectively about a place we've lived, especially when the expense incurred will benefit the new owner and not ourselves. It's worth doing things that improve either curb appeal or the initial impact during a showing. Last week's Times real estate section even talked about a new trend of using pets (well behaved and freshly groomed) to make open houses more homey. Who knows? Fido might even replace the tried-and-true cookie baking, to fill the home with a delicious aroma.

The best story, however, was the last example in the article. One broker tells her clients to go out and buy 25 pairs of expensive designer shoes, which will pay for themselves in a higher sales price, as "people want to step into your life". Isn't that like the closet envy scene in the first Sex and the City movie? Well, if it works, what woman wouldn't want two dozen new pairs of great shoes?

Making Connecticut Business Friendly

Many people don't understand the connection between a business-friendly climate and housing prices. Connecticut is a good example of it. We have ranked dead last among the fifty states in job creation over the past twenty years--for those of you who are counting, that's far longer than the current recession. We export college students, young people, all kinds of people. They go where the jobs are. Lots of you will know where those places are, because it's where your children live.

Without new jobs, there aren't people coming into the state, or staying in the state, to buy homes. Therefore, there isn't a growing market, and there are no buyers for those homes vacated by others who leave, or who downsize, or who transition into assisted living. That also means that new construction competes with existing housing, since relocated homeowners who buy new homes therefore don't buy current ones. All of this explains why low job growth is bad.

But why is it bad? To begin with, we in the Land of Steady Habits tend to believe that everyone wants to live here, and therefore we don't have to make it attractive to do so. We also tend to believe that businesses need to be here. That's true in some cases--like a local real estate firm, or a utility--but is clearly not the case in manufacturing and in more other industries than you would think. So we don't push our lawmakers and state and local officials to do more to attract and retain business. Yes, we want to keep those big defense contracts. But most of the jobs are in small businesses and start-ups. That's where the NIMBY (not in my back yard) folks, the preservationists, the anti-big box protesters, and the knee-jerk city planners and economic development departments lose the race for jobs. Of course, those same people often decry the increases in taxes, but without seeing the connection.

What can you do? Ask your municipality and state officials to be kind to business. Don't jump on the bandwagon to avoid personal tax increases by loading up corporate taxes. Don't let local planning and zoning processes become obstacle courses. Try to think about all sides of the issues. And vote for those who do.

Prices Holding Steady

When we look at the real estate market statistics from last year in Greater New Haven, we don't have much to crow about. All around, it was a blah year, made that way mainly after the tax credits expired in June. However, one thing that is surprising is that the prices didn't go down as much as you might think. Our Guilford office had a mean sales price only 1% or so down from 2009. Our market as a whole was down about 2.9%.

Those figures don't jibe with what the average person on the street thinks. Why is perception so different? One reason is that many things didn't sell at all, and, if they did, they had been reduced one or more times before they went under contract. Also, as we must always point out, these statistics are not the same as in other industries, because the same homes aren't selling every year. Therefore, the particular mix of homes could change, although that is less true when you look at numbers over a whole year. So it could have been that the home that sold for $330,000 in 2010 was as good or better than the average $340,000 one from the year before.

What the numbers do show is that people went for value. Properties that sold were in good to excellent condition, in established neighborhoods, and were priced to sell. Buyers tended to feel that they were in the driver's seat, and could choose among a broad range of options (which, as I've discussed before, was less true than they thought--another example of mistaken perceptions trumping reality).

What does it bode for this year? Value is still important. Basic conservatism will still prevail. Sellers who don't have to sell will still not sell unless and until they can avoid steep cuts. Buyers will continue to be fussy. But, finally, the market will improve. Maybe slowly, but clearly. And we can't wait!