Finally Some Helpful Press

There was a wonderful article in the Wall Street Journal this week, that actually listed ten reasons TO buy a home. As you can tell by the title, we have come to expect that every article will result in calls from clients who have decided not to go forward with a purchase. Therefore, we were thrilled to get some help from the WSJ.

You would not be surprised by most of the reasons, because you've heard them all before. There were a couple of arguments that were particularly good, however, in the way that they were phrased. One was the perennial issue of whether a buyer should buy before the market hits bottom. All real estate professionals know the answer to that--you cannot predict the bottom, so you should just get somewhere near it and not worry. The article, however, quoted a talking head as saying two years ago that prices had to fall another 17% to reach where they should be, and that the Case-Shiller Index in those two years showed prices down 18%. That's pretty close to the bottom.

The other points I really liked were really variations of the same theme---you get a better home when you buy. That's because better properties get sold and worse properties get rented, but it's also true because you can't (or won't) personalize a rental the way you can or would your own place. It's a version of what I've been saying--that you have to like where you live--but it gives some concrete reasons as to why buying does a better job of providing that.

Low mortgage rates, big inventory, fewer taxes, long-term growth--all of these ideas were listed as well. Let's hope that some of you take the plunge after reading the paper!

New Haven is hot!

I'm looking at the figures for June and July in our New Haven office, and they're great! We sold as many units in those two months as we did year-to-date through May, and the two months together were 50% over June and July of last year in both units and volume! This week was the best week they've had in at least two years. What's particularly surprising is that it's happening in what is usually a very slow month, and finally hot and humid to boot. Maybe all the hype about hitting bottom is old news, and we're on the way up!

The Case-Shiller index for last month also showed a halt in the decline of prices, and it corroborates my earlier paragraph. We are also finding our Wallingford Regional office to be running ahead of last year in sales, so it's not just New Haven (although Yale continues to be a driving force in the local real estate market).

I was at the Lexus dealer yesterday, and Dave McDermott and I had a friendly argument as to whose business was worse this year. He has trouble with my argument that at least he has his excellent service department to bring in revenues. Dave says that customers want to buy, and that credit is the issue. I'd say we're both in much the same situation, although, if he reads this blog, he's going to think we're in clover now. I wish...

National Statistics

In trying to make sense of national statistics on real estate sales, I have been reading a number of different sources. One I received today was from a friend with a real estate company in Madison, Wisconsin. He sent a link to the Fannie Mae/Freddie Mac numbers, which include all resales with conforming loans, and are divided by state and by quarter. These are different from the Case-Shiller numbers, which only cover 20 metropolitan areas. The numbers for CT in the Fannie Mae index indicate that prices fell most sharply last year, and that overall prices have fallen about 15% in total. The numbers for the latest quarter indicate that prices have levelled off for now.

These figures agree pretty well with what the New York Times reported this morning. The article in the Times said that prices in the past month actually crept up from the month before. That could be because of the mix of properties sold, but it does indicate that some people who were on the fence have jumped back into the market.

The third source, the Commercial Record, shows town by town variations in what has sold this year versus last. Again, it shows increased activity lately, although the first quarter was pretty dismal.

Whichever measurement we use, it seems to corroborate that we have at least and at last hit bottom, and are looking forward to heading up!