CT Real Estate Market Report

Holding Steady - Looking Ahead to 2010
2009 - The Year in Review

We are excited to report that the Connecticut real estate market showed significant improvement in the last half of 2009.

“While the past couple of years have been extremely difficult for consumers and the real estate market; there are indications that things are beginning to turn around,” said Candace Adams, President of Prudential Connecticut Realty. The following is our detailed, year-end look at the real estate market for each of Connecticut’s communities, counties, and the state itself.

Entire Report

http://prudentialct.com/downloads/market-report/09Q4.pdf

3rd Quarter Connecticut Real Estate Market Report

The Real Estate Market Shows Signs of Recovery

 

Slowly But Surely, The Connecticut Real Estate Market is Showing Signs of Recovery.

For the past seven months, the NAR pending home sale index has shown increases in activity (the longest in the history of this index). Existing home sales are now back up to levels in excess of 5 million, annualized. Housing inventory levels are stable, there has been an increase in deposits and mortgage rates remain at historical lows. “All of these factors indicate an improving market,” said Candace Adams, president of Prudential Connecticut Realty.

 

Does this mean the real estate market is fully recovered? Not yet. She added that unemployment and consumer confidence are clearly going to continue to impact the housing market. But it is clear that we have turned a corner. Read more...

 

Entire Report

 

Condo Market Data

 

Single Family Data

Deposits Increase Dramatically in 2nd Quarter

Unless you’ve been avoiding the media all together, you’re quite familiar with the economic factors that have pummeled the real estate industry for the past two or more years. Few issues have received as much media attention as the real estate bubble explosion. According to Candace Adams, president of Prudential Connecticut Realty, it’s critical for real estate professionals to analyze Connecticut housing data continuously throughout the year to provide clients with the true picture of their own local market. “Our most current analysis shows some positive signs,” Ms. Adams said. “Most notably, deposits are up significantly throughout Connecticut.” There are about 7,500 deposits right now compared to 5,500 deposits in March of this year, an increase of 40 percent. At the same time, inventory levels did not increase nearly as much this year as they did last year, meaning, there is still a good selection of homes for sale, but the choices will get narrower as popular price ranges continue to sell....Read entire report here Q2 2009 CT Real Estate Market Report

Condo Stats by County and Town

Single Family Residence Stats by County and Town

First Quarter 2009 CT Real Estate Market Report

Deposits and activity are on the rise in early 2009!

The last few months of 2008 and the start of 2009 have been challenging times for both the economy and the real estate market.  Dissecting real estate market indicators is key to understanding the current state of housing and related industries. The number of sales does not tell the complete story, just as a change in median sales prices is not a true reflection of all home values in a community. Over simplifying complex data and interrelationships may be tempting, but the conclusions can often be misleading.

Click here to read the entire First Quarter 2009 CT Real Estate Market Report^SM

Q1 2009 CT Real Estate Market Report

Condo Market Data 

 Single-Family Residence Data

Owning a Home is a Great Investment

We’re in uncertain times in the real estate market and the economy. News headlines are filled with stories that talk about falling property values, a weak economy, falling numbers of sales and on and on. 

 

What is reality?

Reality check one:  We are in difficult times in the real estate market. Despite the fact that Connecticut’s numbers are pretty good, we are getting lumped together with areas of the nation that are not doing so well. You would not know this from reading the headlines.

Reality check two:  Most people who purchase a home or a condo do so to have a place to live.  Home owners are one type of purchaser while investors are an entirely different category, with different motivations entirely.

 

Reality check three:  Home values increase significantly with time, but they sure as heck don’t normally go up 10 percent in a typical year. This should never be an expectation.

 

We assembled median (middle of the price range) sales price data for single-family homes in a number of communities around Connecticut. These communities were chosen randomly.

Here’s what we found:

 

Now, before anyone says it:  This does not mean that every home in each of these communities went up by the same amount: Some would be more, some less.

But, clearly, the numbers show reality real well. Owning a home has always been a good investment.

Median Prices, The Media and Other Things….

As I write this today, I have been barraged with some of the RSS feeds with all kinds of negative news stories about falling home prices. Yesterday, we got some good news from the National Association of Realtors that existing home sales went up by about 6.5 percent in December of 2008 (apparently, it was unexpected news-projections by economists thought there would be a decrease).

 

I’ve always found that ‘screaming’ at people just really doesn’t work (some of the headlines certainly do ‘scream’!). 

 

The attention to short term shifts to the median sales price of homes is really starting to get to me as I am really wondering if the reporters writing these stories understand what the median is.

The median is the mathematical center of a number set.  Look at the following example with 20 closed home sales in the months of November and December that show the median and average sales price from this community:

 

Should we reach the conclusion that a home in this community increased in value from November to December by 26 percent based on the month over month change to the median sales price? 

 

How about using the average instead? This shows a month over month price increase of 4 percent. Certainly this would sound more believable, but it is still very suspect.

 

Another way of thinking about home prices:  Neither the median nor the average sales price change across a community says what any particular home in that community is worth (value). The only way to accurately speak to the value of any given property in any location is to have a market analysis or appraisal done for that home.

 

The other real danger in using short term (month over month or week over week) changes to the overall price for any community is that it can be heavily influenced by what price ranges have actually sold and closed.

 

While we all know that median sales prices have been trending modestly lower here in Connecticut over the past year, our prices are not free fall!

Download Understanding Median Prices 4

2008 Year End Connecticut Real Estate Market Report

"We've just finished assembling and analyzing the 2008 real estate market data for Connecticut. You'll find the results posted below and we've titled it "The Good, The Bad and Reality."  It has the most comprehensive town, county and state real estate market information available for Connecticut. So, check it out.

 

As always, if there are questions, just post them here, and you'll get an answer."

 

Download 2008 Year in Review CT RE Report

 

Download 2008 CT SF Home Sales

 

Download 2008 CT Condo Sales

 

Welcome to CTrealestatemarketreport.com!

What this is all about:

We have started this site to get real time real estate market information out in the public domain.

Why? 

We are constantly barraged by media stories about the real estate market, written by folks that frankly, do not have the background in market analysis and don’t often have access to all of the data that is required to give an accurate picture of what the market is in fact doing.  It’s not easy to do this stuff so it is not our intent to level criticism at the media, but headlines that say “sales fall by 20%!” do not really tell anyone what is going on.

Who We Are

My name is Barry Rosa, and I’m Vice President at Prudential Connecticut Realty.  This site is not about Prudential Connecticut Realty and it’s not abot me, however: it is about the real estate market in Connecticut.  I have been doing market analysis for almost 30 years at this point and I wanted to make more of this information accessible.  You can make comments on this site, ask questions, add information, etc.  If you ask questions, do expect you will get a response from me (as well as other folks that are using the site).  That’s what a real estate blog is all about.  This site will only be as good as all of us contribute.

Enjoy.

Why Details Matter

December 4, 2008

There has certainly been many headlines about the number of sales dropping recently.  They are not hard to find in any media (newspapers, Internet, etc.).

The number of sales is an important market indicator, but it’s not enough, alone, to really know what’s going on.  Real estate markets are also very local in nature, so any national, regional or state story that talks about the number of sales is can (and often does) miss some very important details.

Sales also measure the past not future activity.  When you really think about it, a closed sale is an average of 3 months out of date (if the home closes on November 20^th, it was probably contracted about 2-3 months ago, so it is really measuring the market of that time). 

The rate of sales activity also varies substantially by price range.

When we look at a market, we take sales plus deposit activity (which is real time data) and look at each price range to see what is really going on.  The objective of the exercise is to look at activity by price range as well as the supply times of inventory (how long it will take to sell what is on the market). 

And before anyone says it, yes, we know all of the deposits will not close and turn into sales.  In the real world, about 70% of the deposits do close, however.

This can give a really accurate picture, or snapshot, of what a market looks like.  We also do this by individual town, since what is happening in one town can be completely different than what is happening in the neighboring community.

Take a look at the following example from the city of Norwalk.  This is real time single-family data:

Price Distribution & Performance by Price Range
City of Norwalk
Single-Family
		Current	6 mo avg.			(Months)	(Months)
Price Range		Active	Closed	Current	Sales &	Supply Time	Supply Time
($'s)		Inventory	Sales	Deposits	Deposits	Sales	Sales & Deposits
0-299.9		23	1.2	9	10.2	19.8	2.3
300-349.9		21	2.0	1	3.0	10.5	7.0
350-399.9		43	3.3	6	9.3	12.9	4.6
400-449.9		29	6.0	8	14.0	4.8	2.1
450-499.9		39	5.5	5	10.5	7.1	3.7
500-549.9		25	4.7	3	7.7	5.4	3.3
550-599.9		24	1.6	3	4.6	15.0	5.2
600-649.9		22	3.0	0	3.0	7.3	7.3
650-699.9		22	2.3	1	3.3	9.4	6.6
700-749.9		7	1.5	0	1.5	4.7	4.7
750-799.9		14	0.8	4	4.8	16.9	2.9
800-849.9		5	1.2	1	2.2	4.3	2.3
850-899.9		16	1.0	2	3.0	16.0	5.3
900-949.9		3	0.5	0	0.5	6.0	6.0
950-1000		9	1.0	0	1.0	9.0	9.0
1000-1099		3	0.3	0	0.3	9.1	9.1
1100-1199		8	0.0	0	0.0
1200-1299		5	0.8	0	0.8	6.0	6.0
1300-1399		2	0.3	0	0.3	6.1	6.1
1400-1499		6	0.2	0	0.2	37.5	37.5
1500-1749		7	1.0	0	1.0	7.0	7.0
1750-1999		11	0.7	0	0.7	16.7	16.7
2000-2499		5	0.3	1	1.3	15.2	3.8
2500-2999		12	0.2	0	0.2	75.0	75.0
3000-3499		4	0.2	1	1.2	25.0	3.4
3500+		15	0.7	0	0.7	22.7	22.7
Totals		380	40.2	45	85.2	9.5	4.5
Closed Sales = Avg. Sales per month from 6/1/08 - 11/30/08
Current Deposits
Supply times are to 100% sell out of inventory
Data Source:  MLS

Take a careful look at how much variation there is in performance by price range.  While the overall supply time is 9.5 months (on sales) for single-family homes, the range of supply time is from a low of 4.3 months to a high of 75 months! 

This type of data does not address the matter of home price.  It has nothing to do with what a specific home is worth-that requires a market analysis to determine the price, done by a professional who is knowledgeable of the local market.  This data really shows how the different price ranges are selling.

It also does not predict market time, but clearly, if you have a home priced (and worth) between $800,000 and $850,000, the market time should be much less than that for a home priced (and worth) between $1,100,000 and $1,199,000.  Surprisingly, the lowest price range is not the strongest performing range in Norwalk. 

Common wisdoms may not apply when we look at the hard data.

By Barry Rosa

Vice President

Prudential Connecticut Realty

Third Quarter CT Market Report

Prepared by Barry Rosa
Vice President of New Homes & Land/Specialty Markets
Prudential Connecticut Realty

Light on the Horizon It’s a Great Time to Buy The troubles in the financial markets are certainly serious.  At the time this is being written, the following major events have taken place:  The U.S. government has taken control of Fannie Mae and Freddie Mac, made a massive loan to AIG, seized Washington Mutual and sold the bank assets to Chase, and is now constructing a $700 billion rescue package for the financial system.  Wachovia looks like it will be sold to Chase and Citicorp and the stock market doesn’t seem to know which way to go (with a definite preference to go down when in doubt). Not doubt, there is a lot more to come! There are many opinions and thoughts on the wisdom of these moves that will not be debated here, but one item is very important to us and what we do in the real estate, building and mortgage industries:  The availability of credit.  In my opinion, if the government had not stepped in, we would now be facing much more serious issues in the availability of credit, both in terms of the ability to obtain it as well as cost.  No matter what we think, the bottom line is that this needed to happen. Media bombardment promotes panic. For those of you who remember the ‘80s, when homebuyers faced 17% mortgages, surging energy prices and “panic gripping the globe,” (according to Time Magazine that year) you’ll also remember those times were followed by incredible economic prosperity. Today, once again our confidence is shaken. Maybe more so simply because we have “breaking news” 24 hours a day channeled right to our radios, televisions, desktops, laptops, cell phones and PDAs. There is no “down time” during which to gather our wits and think intelligently. Consequently, panic has more of an opportunity to take hold and take action:  Bad idea for consumers and investors. Now is a good time to breathe deeply and consider opportunity. Seek out and spread the good news. There actually is some good news for the real estate market.  Mortgage interest rates have fallen substantially since the takeover of Fannie and Freddie and are in the upper 5 percent range for 30 year fixed rates. The tax credit/stimulus package for first-time purchasers is beginning to develop momentum and we have seen a number of first-time buyers get off the fence over the past month and purchase a property using the $7,500 benefit offered. Also, let’s not forget the ultimate real estate truism: people have to live somewhere. They may not need an SUV, or a gas grill, or a country club membership, but they do need a home, and homes have always been -- and will continue to be -- a sound long-term investment. The real estate picture in Connecticut In light of all that has been going on, there has been little positive or negative change to the real estate markets here.  In fact, Connecticut has actually done well when placed in the context of all the national economic news unfolding over the past year. Sales are still running about 70% of last year’s levels. Marketing times have not increased much year over year. Inventory levels have not shown any large increases, and median sales prices have moderated, but are not in a downward freefall. In truth, the picture may appear grim in states like Florida, California, Nevada and Arizona, but that is not true of Connecticut.

Download Q3 2008 Market Report

 

Download Q3 2008 SF Stats

 

Download Q3 2008 Condos stats