Home for the Holidays

As the year winds down toward the holidays, I want to remind people that there's one last push left for the real estate market.  Although fewer people look for property during this season, those who do are generally very motivated.  And, while sellers often don't want to have their homes subject to showings near the holidays, the truth is that some homes never look better than when they are decorated for the season.  There is a weather factor, of course, and much less daylight, but the aroma of baked goods and a display of festive decorations will often do a lot to make a house seem like you want it to be your new home.

The same principle applies to the financing and closing side of a transaction.  Even though people generally miss more working days, and parties and vacations can slow down the wheels of commerce, there is usually a strong motivation to clean off desks at the end of the year, and fewer files that have to be processed.  The tax issues involved can often lend a sense of urgency also, since many times there is a big incentive to close in one year or the next, and many jobs that begin at the first of the new year.

So, before you stop reading the Open House section of the paper, and trolling the internet for interesting homes, take a long look at your goals, and think about whether you can accomplish in less time and with less competition (and maybe even for a lower price) what otherwise will be left until spring.  Maybe a new home is the best present of all!

Market Statistics

I just gave an interview to a reporter about last year's numbers for the state of Connecticut. The Commercial Record showed that sales were about even with 2008, while prices were down about 10% from 2008 to 2009. She wanted to know whether that surprised me. It did not.

The above results are typical for markets that are in moderate recovery. When they decline, they decline first in units and then in prices. On the way back up, we see units increasing before we see prices returning. This is also because, when the economy is not strong, it's people at the lower end of the price spectrum who are most likely to buy or sell property, either because they are first-time homebuyers, or because they are forced to sell. These reasons account for the decline caused by a change in the mix of units changing hands.

The other piece of the decline is caused by the value of the same house going down in this market. Most houses, especially when they are competing with foreclosure sales, are selling for less than they would have a year ago. That's the part of the decline I would call same-sale price loss.

If you add those two explanations together, you can see that the 1% a month loss in value that I've been blogging about is not going to go away any time soon. On the other hand, we should see unit sales beginning to rise faster than they did in 2009, particularly as long as the government continues to give incentives to homebuyers. And that's good news.