Real estate sales have always tied closely to the index of consumer confidence. Buyers' attitudes toward spending in general matter as much as interest rates to our level of sales. The index has been going up most of the time over the past couple of years, rising even before we noticed an uptick.
Now, although the real estate market is much improved, the consumer confidence index is wobbling. The past couple of months have seen declines, and, although we aren't seeing its effects directly, we know that the market recovery has always been shaky. Every change in the stock market or mortgage policy makes us nervous. We cannot count yet on the rising tide to carry us back to a strong sales climate.
We certainly can keep our fingers crossed that the recent dip is just that--a dip. Also, it seems as though our improvement has come disproportionately from first-time buyers, who might be less inclined by age (they can't remember past downturns), life status (they are in the peak years of household formation), and risk profile (they tend to be less conservative), to worry quite as much about statistics. Let's hope so.
Showing posts with label Statistics. Show all posts
Showing posts with label Statistics. Show all posts
Wednesday, June 27, 2012
Tuesday, February 7, 2012
New Construction
There's another sign out there that things are improving. We are starting to see new construction again. When prices go down, new construction has a hard time competing, since the costs of land, site improvements, labor, and materials don't really go down much, so new construction can't compare to the price of a home that was built a few years ago. In addition, loans are harder to get, and most builders find it difficult to get financing for projects. Add in the time a completed home could sit on the market before selling, and you don't see much being started.
Lately, statistics from around the country show housing starts beginning to rise. We're at the end of that increase, since we don't have as much land, as much new employment, and costs as low as some other states. Even we, however, are noticing activity. There is always a portion of the buying public that seeks out new construction, especially people moving from other places, who want their new home to look like the home they left behind. In recent years, many of them have turned to renting, either because they left behind an unsold home, or because they were worried that it was the wrong time to be buying. Eventually, even the most skittish will want to settle down. And it looks as though that time may be upon us--good news for everyone!
Lately, statistics from around the country show housing starts beginning to rise. We're at the end of that increase, since we don't have as much land, as much new employment, and costs as low as some other states. Even we, however, are noticing activity. There is always a portion of the buying public that seeks out new construction, especially people moving from other places, who want their new home to look like the home they left behind. In recent years, many of them have turned to renting, either because they left behind an unsold home, or because they were worried that it was the wrong time to be buying. Eventually, even the most skittish will want to settle down. And it looks as though that time may be upon us--good news for everyone!
Tuesday, January 17, 2012
The Tide is Turning
Probably most of you think that prices in real estate are dropping, with no end in sight. I would certainly think so as well, if I went by what I read in the national press. That's why I found it so interesting to look at our numbers for the region for the last quarter of 2011.
Prices in the New Haven area went up 0.7% for the last quarter of 2011 versus the last quarter of 2010, and the number of sales went up 2.8% for the same period. While that might not seem like much of a jump, it must be compared to the impression people have that prices are falling. It's not apples to apples--it measures the total sales against the total sales, not the same houses being transferred each year--but it's a good indicator that the bottom of the market may well have come and gone. When both prices and units rise, it's not too likely that one of the trends is an aberration. Prices may not jump, and there may be a few hiccups involving taxes and financing, but the fundamentals are there, and we should see some of the rewards this year.
If you are interested in seeing all the statistics yourself, please check our website at http://www.hpearce.com/.
Prices in the New Haven area went up 0.7% for the last quarter of 2011 versus the last quarter of 2010, and the number of sales went up 2.8% for the same period. While that might not seem like much of a jump, it must be compared to the impression people have that prices are falling. It's not apples to apples--it measures the total sales against the total sales, not the same houses being transferred each year--but it's a good indicator that the bottom of the market may well have come and gone. When both prices and units rise, it's not too likely that one of the trends is an aberration. Prices may not jump, and there may be a few hiccups involving taxes and financing, but the fundamentals are there, and we should see some of the rewards this year.
If you are interested in seeing all the statistics yourself, please check our website at http://www.hpearce.com/.
Monday, October 10, 2011
Mortgage Woes
There has been a lot of talk about how low mortgage rates are today--the lowest in memory--but much less talk about how hard they are to get approved. We have found that buyers may wait for weeks with promises of commitment, only to be told after a long period of time that they are being denied. The annoying part--actually, make that one annoying part--is that the denial is frequently for something that you would have thought that the bank had known all along. This is true of delays as well. We have had closings delayed multiple times, with some delays being for things that should have been settled well in advance.
I suspect that some of the problem lies in confusion at the banks, and probably understaffing. The bigger issue may be that no one has the authority to pull the trigger on anything, so things have to wend their way up a ladder of approvals. Just to be clear, all of the blame does not belong with the banks. Governmental changes in policy have caused all kinds of changes, and sometimes at the last minute. The feds are always trying to protect us against the last problem, so many of the rules seem largely unnecessary. This is one of the situations where we can groan when we hear that "we're from the government, and we're here to help you."
Buyers can contribute to the delays also. Anyone who has gotten a loan in prior years may be amazed at how much information is demanded on today's applications. Some people waste time trying to argue their way out of requirements. Since most are imposed on the banks, as opposed to by the banks, this is a delay not worth taking. The one I hear frequently is this: "I don't need to get a loan. I could pay cash. If they just look at my bank balance, they won't ask for all this paperwork." Not true. Get over it, or go ahead and pay cash.
The statistics from the CT Multiple Listing Service show closing times of around 60 days. That's not so far from the 30 to 45 days of the past, but should be noted, especially as almost 40% of sales are for cash these days, and therefore have no delays. The time frames may get worse as we near the holiday season, so plan ahead to avoid disappointment.
I suspect that some of the problem lies in confusion at the banks, and probably understaffing. The bigger issue may be that no one has the authority to pull the trigger on anything, so things have to wend their way up a ladder of approvals. Just to be clear, all of the blame does not belong with the banks. Governmental changes in policy have caused all kinds of changes, and sometimes at the last minute. The feds are always trying to protect us against the last problem, so many of the rules seem largely unnecessary. This is one of the situations where we can groan when we hear that "we're from the government, and we're here to help you."
Buyers can contribute to the delays also. Anyone who has gotten a loan in prior years may be amazed at how much information is demanded on today's applications. Some people waste time trying to argue their way out of requirements. Since most are imposed on the banks, as opposed to by the banks, this is a delay not worth taking. The one I hear frequently is this: "I don't need to get a loan. I could pay cash. If they just look at my bank balance, they won't ask for all this paperwork." Not true. Get over it, or go ahead and pay cash.
The statistics from the CT Multiple Listing Service show closing times of around 60 days. That's not so far from the 30 to 45 days of the past, but should be noted, especially as almost 40% of sales are for cash these days, and therefore have no delays. The time frames may get worse as we near the holiday season, so plan ahead to avoid disappointment.
Thursday, July 29, 2010
Second Quarter Results
We just released second quarter statistics from the Greater New Haven region, which showed a major uptick from the same quarter of last year. Of course, the homebuyer tax credit was expiring, so there was a rush to close units while that was still in place. Also, however bad the economy still is, there is some national sense that things are better than in 2009, and the base of comparison was therefore low.
Within the region, Guilford and Woodbridge had the highest prices, with Madison coming in third. Prices generally went down from the second quarter of last year to the first quarter of this year, and then climbed in the second quarter of this year. Unit sales went up more sharply, rising 20% from last year's second quarter through this year at the same time.
It would be interesting to know how many of the sales were from properties which have been on the market for a long time, languishing at high prices, where a price reduction sparked an offer. Anecdotally, we know that many of the stories we hear involve sellers who are finally putting things on where they will sell. They are helped in their efforts by mortgage rates, which are so low that they allow for buyers to feel that they are getting a good deal, based on monthly payments. A recent article in a national paper suggested that buyers are trading up as a way to lock in cheap money. Let's hope so!
Within the region, Guilford and Woodbridge had the highest prices, with Madison coming in third. Prices generally went down from the second quarter of last year to the first quarter of this year, and then climbed in the second quarter of this year. Unit sales went up more sharply, rising 20% from last year's second quarter through this year at the same time.
It would be interesting to know how many of the sales were from properties which have been on the market for a long time, languishing at high prices, where a price reduction sparked an offer. Anecdotally, we know that many of the stories we hear involve sellers who are finally putting things on where they will sell. They are helped in their efforts by mortgage rates, which are so low that they allow for buyers to feel that they are getting a good deal, based on monthly payments. A recent article in a national paper suggested that buyers are trading up as a way to lock in cheap money. Let's hope so!
Monday, June 21, 2010
New Haven Residential Statistics
After I wrote my last blog on the New Haven residential market, I received a call from a reporter who follows the blog, asking whether my assertions were based in fact. Always an interesting question about a blog...Anyway, our office did some statistics for the East Rock market, using last year and this year, with houses in two ranges: $300-500K and houses over $500K.
Even though I had said that that market area was very healthy, even I was surprised at how true it turned out to be. The median number of days on the market was 55 for the first price range, and an amazing 20 days for the second range. The list to sales price ratio was 95% for the 300-500K range, and 94% over that amount.
It's hard to compare numbers when you are looking at larger areas, such as entire cities and towns, or even zip code regions. This analysis was done street by street, in a relatively small area, and so cannot be extrapolated to other places. Translation: Your home in a suburb, or even another part of New Haven, or even in another price range in the same neighborhood, may not sell that quickly or that close to the asking price! Although it's also true that you cannot say that, even in this small subgroup, these figures will necessarily hold, it's good news for the East Rock section.
Even though I had said that that market area was very healthy, even I was surprised at how true it turned out to be. The median number of days on the market was 55 for the first price range, and an amazing 20 days for the second range. The list to sales price ratio was 95% for the 300-500K range, and 94% over that amount.
It's hard to compare numbers when you are looking at larger areas, such as entire cities and towns, or even zip code regions. This analysis was done street by street, in a relatively small area, and so cannot be extrapolated to other places. Translation: Your home in a suburb, or even another part of New Haven, or even in another price range in the same neighborhood, may not sell that quickly or that close to the asking price! Although it's also true that you cannot say that, even in this small subgroup, these figures will necessarily hold, it's good news for the East Rock section.
Wednesday, May 12, 2010
Independent Realtors
The rise of so many national real estate franchises has led some people to believe that only national companies get business from out -of- towners moving in, and that only national companies can expose your property to a wide range of people. That turns out not to be true.
H. Pearce belongs to Leading Real Estate Companies of the World, an organization of high-quality independent firms. This group sells more real estate than any franchise company. It also has comparable statistics for productivity and earnings.
That shouldn't be surprising news for owners and buyers. After all, is McDonald's the best restaurant in any town? And does your favorite breakfast food get sold through a few franchises, or through a plethora of mom-and-pop eateries?
As with other industries, the trend is clear: Big firms gobble up smaller ones, until there is a perceived need for personal service and distinctive work. At that time, new firms spring up to fill the demand. It's true in banking, retailing, and a host of other fields. We're no different, and we're glad that the evidence bears out the quality and competence of the locally-owned real estate company. Go local--have your dollars stay here!
H. Pearce belongs to Leading Real Estate Companies of the World, an organization of high-quality independent firms. This group sells more real estate than any franchise company. It also has comparable statistics for productivity and earnings.
That shouldn't be surprising news for owners and buyers. After all, is McDonald's the best restaurant in any town? And does your favorite breakfast food get sold through a few franchises, or through a plethora of mom-and-pop eateries?
As with other industries, the trend is clear: Big firms gobble up smaller ones, until there is a perceived need for personal service and distinctive work. At that time, new firms spring up to fill the demand. It's true in banking, retailing, and a host of other fields. We're no different, and we're glad that the evidence bears out the quality and competence of the locally-owned real estate company. Go local--have your dollars stay here!
Wednesday, April 28, 2010
First Quarter Market Statistics
Our crack internet team has just finished compiling statistics on sales and prices in our region for the first quarter of 2010. Yes, it's true--the market is way up. Sales in New Haven county are up 34% over the same period last year. Prices fell 7%, which was less than they had been falling, and also reflects a shift in the mix of what's selling. The first-time homebuyer tax credit has the greatest impact in the lower price ranges, and that will make a difference. Also, the upper end of the market tends to be the most discretionary, and the lack of consumer confidence has had those buyers continuing to sit on the fence. If you'd like to see the full report, go to http://www.hpearce.com/, and pull down the Services tab to access Market Reports.
I just got back from a meeting of some of my peers, the presidents of other large independent real estate firms. Around the country, the news is much the same. Last year was so bad that we're all feeling better. We're all worried about what will happen when the tax credit disappears on Saturday, but we all agree that this second round has not been as effective in spurring sales. All of us have slashed costs, but know that a healthy company cannot survive in the long run by cutting expenses instead of increasing sales. We are fortunate here compared to markets like Reno, but even my friends there are seeing an improvement. Since 67% of their sales are foreclosures and short sales, that wouldn't be hard! We continue to be encouraged that independent firms are doing so well in competition with the franchises, and know that our ability to move quickly and make decisions has helped us immensely in this downturn. We were meeting in Davenport, Iowa, where the market never spiked the way ours did, so the landing has been much softer. There is a lot of activity there, and the average home price in some offices is about $90,000. That would be quite a bargain here!
I just got back from a meeting of some of my peers, the presidents of other large independent real estate firms. Around the country, the news is much the same. Last year was so bad that we're all feeling better. We're all worried about what will happen when the tax credit disappears on Saturday, but we all agree that this second round has not been as effective in spurring sales. All of us have slashed costs, but know that a healthy company cannot survive in the long run by cutting expenses instead of increasing sales. We are fortunate here compared to markets like Reno, but even my friends there are seeing an improvement. Since 67% of their sales are foreclosures and short sales, that wouldn't be hard! We continue to be encouraged that independent firms are doing so well in competition with the franchises, and know that our ability to move quickly and make decisions has helped us immensely in this downturn. We were meeting in Davenport, Iowa, where the market never spiked the way ours did, so the landing has been much softer. There is a lot of activity there, and the average home price in some offices is about $90,000. That would be quite a bargain here!
Wednesday, September 16, 2009
Market Inventory
We recently received a market inventory study from Madison, Wisconsin, showing that higher-end properties were not selling and lower ones were. Not a big surprise, but we decided to look at our market. What we found was similar, and striking.
Properties over $700,000 are less than 3% of sales now, there are enough homes in that range on the market to represent more than a year's supply, and the sales have fallen almost in half from last year. At the lower end, under $300,000, there exists only a supply of two and a half months, sales have risen by a third, and they represent 41% of all sales. While we knew that first-time homebuyers were driving the current market, it's still fascinating to see that laid out in statistics.
Overall, in our region, prices have fallen 15% since the same time last year. If you put all these facts together, what it tells you is that you are more likely to sell your home quickly if it's in a lower price range and you price it aggressively. But you knew that already!
Properties over $700,000 are less than 3% of sales now, there are enough homes in that range on the market to represent more than a year's supply, and the sales have fallen almost in half from last year. At the lower end, under $300,000, there exists only a supply of two and a half months, sales have risen by a third, and they represent 41% of all sales. While we knew that first-time homebuyers were driving the current market, it's still fascinating to see that laid out in statistics.
Overall, in our region, prices have fallen 15% since the same time last year. If you put all these facts together, what it tells you is that you are more likely to sell your home quickly if it's in a lower price range and you price it aggressively. But you knew that already!
Thursday, June 25, 2009
More Bad Commercial News, and a Weather Report
Our latest few weeks of statistics show the problem in commercial real estate in our area. This week's report shows only one sale, of a 15,000 sf building, in all of New Haven County. Last week, there were three small leases, together totaling only 2600 sf. If you are a seller, and you're not selling, or a landlord, and you're not renting, you're not alone!
Maybe it's the weather. Does anyone remember us ever having worse weather for a month of summer? Our pool is still not up to 70 degrees, and I haven't been in it yet. I can't even bike much, since the roads always seem to be slick with rain. It's pretty good running weather, as long as you don't mind getting a little wet. I know that I'll be complaining about the heat soon (maybe even when I run on the track tonight), but I'm ready for some sunshine!
We are hoping that the delay of summer will cause real estate sales to keep happening, instead of slowing down next week, as they normally would. That would certainly be a silver lining to the cloud that's been sitting over New Haven for the last month!
Maybe it's the weather. Does anyone remember us ever having worse weather for a month of summer? Our pool is still not up to 70 degrees, and I haven't been in it yet. I can't even bike much, since the roads always seem to be slick with rain. It's pretty good running weather, as long as you don't mind getting a little wet. I know that I'll be complaining about the heat soon (maybe even when I run on the track tonight), but I'm ready for some sunshine!
We are hoping that the delay of summer will cause real estate sales to keep happening, instead of slowing down next week, as they normally would. That would certainly be a silver lining to the cloud that's been sitting over New Haven for the last month!
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