Connecticut

Has recovery hit Connecticut? Are prices finally appreciating so short sales will dry out?

You can't escape the media hype about appreciation...while some areas nationwide are in fact recovering, recent market reports of local towns show no such appreciation in central CT towns just yet.

In fact when examining the past 12 months of real estate sales here in CT, we find that the overall percentage of sales that are short sales has in fact increased again as it has for the past 5 years:

It seems we have aways to go before we can call this an improving situation.

Considering a short sale in Connecticut? Contact me for a free and private consultation.

May 14, 2013, Wallingford, Connecticut: While the year is not even halfway over yet, so far 2013 seems to be a fairly stagnant year of short sales in Wallingford as short sales hover at just under 6% of market share  - virtually unchanged from 2012. Of all residential sold inventory since 2008 (when the MLS required disclosure of potential short sales) sales of short sales as a share of the Wallingford market has continued to climb yearly:

Other recent Wallingford market reports also suggest no growth in sales or values, which certainly explains the continued pace of short sales in town as Wallingford homeowners continue to watch the values of their homes decline.

According to the Mortgage Bankers Association (MBA), rates are headed to rise by the end of the year- to a predicted 4.4%. After a 4 year boom in refinances due to historically low rates in the 3%'s...the party may be over as rates start to increase by the end of the year. Economists seem agree with MBA's prediction of increasing rates, according to this Yahoo article.

Homebuyers-to-be still sitting on the fence watching the market should take note and consider taking action on their home purchase plans. While recent market reports for central CT towns do not yet suggest that values have increased significantly, rising interest rates could easily outweigh any savings from further drops in prices in many CT towns.

READY TO GET STARTED ON YOUR…

There is no shortage of real estate recovery headlines all over the internet and the news - making some buyers wonder if they missed their opportunity to buy a home at rock bottom prices. While in fact some areas of the country are experiencing a turn towards a sellers market - this is certainly not the case here in Connecticut. While recent CT market reports do in fact show an increase in sales activity since 2011, these same reports also show sold prices still on a downward trend year over year. 

The first 4 months of sales here in CT reflect a similar trend. Sales have in fact increased a bit in the last two years, although nowhere near the activity levels seen in the early 2000's:

However - sold prices have not improved and in fact are…

Meriden, CT Market Report - April 2013: The state of the Meriden real estate market today and a look back at the ten year trend. Today in Meriden we have 511 properties on the market listed at an average price of $170,035. So far this year 147 properties have sold at an average sales price average of $128,499 - The lowest average sales price in over 10 years. While sales prices in Meriden have fallen back down to 2003 levels in 2012 and seem to be continuing to fall so far in 2013, there is at least some refreshing news for Meriden homeowners when looking at the ten year trend in real estate sales:

While sales peaked at 1154 residential sales in 2005 and 6 years of declines have followed (except for a slight jump in 2009), 2012 saw a 20%…

April 29 2013, Southington, Connecticut: While the year is not even halfway over yet, so far 2013 seems to be a year of improvement in Southington. Of all residential sold inventory since 2008 (when the MLS required disclosure of potential short sales) sales of short sales as a share of the market peaked in 2011 and has been slowly climbing down since:

The reason for this is unclear as other market reports suggest values in Southington are still on a downward trend. Perhaps news of "recovery" and improving conditions have left many Southington homewoners hesitant to list their home as a short sale, and instead continue to wait for their home's value to improve and get them out of their negative equity. The wait may be a long one.

Bristol, CT is one of many CT towns that seems to be enjoying an upswing in sales activity on 2013. First quarter sales are up a whopping 50% over their lowest point in 2009:

Unfortunately the same can't be said about sales prices which have continued down every year since 2010:

However a continued increase in demand will eventually pull up sales prices as supply dwindels. There is currently 15 months of inventory on market in Bristol at the current rate of absorption. At that rate, it may take quite some time for inventory to be reduced to a point where values will start to increase.

CONSIDERING SELLING YOUR BRISTOL, CT HOME?

Short sales can be good deals - they are usually in significantly better condition than foreclosed properties, and while short sales don't sell for 50 cents on the dollar - they do generally sell slightly under market value. But before making an offer on one - check out these 5 Tips:

• Make sure your buyers agent understands the short sale process and is able to qualify the sellers agent as well as the particular short sale situation to see if it is likely to close. You don't want to waste 8 months in contratc to not close because your agent didn't know well enough to qualify the listing agents short sale knowledge.
• Be flexible about a close date. A short sale approval can take a few weeks to a few months, but once it comes, you'll need to be able…

Southington, CT is one of many CT towns that seems to be enjoying a long overdue upswing in sales activity on 2013. First quarter sales are up a whopping 45% over the same period in 2012:

Unfortunately the same can't be said about sales prices which are down 6% from 1st quarter 2012:

However a continued increase in demand will eventually pull up sales prices as supply dwindels. There is currently 10 months of inventory on market in Southington at the current rate of absorbtion. At that rate, it may take quite some time for inventory to be reduced to a point where values will start to increase.

CONSIDERING SELLING YOUR SOUTHINGTON CT HOME?

Has Connecticut finally hit bottom and is starting to recover? Perhaps...there are some signs that we have hit an upswing in sales recently, and increases in values would reasonably follow. However, even if we have turned the corner here in CT - the massive lost equity since the boom years for purchases and refinances ensure a slow recovery as folks remain underwater in their homes for years to come. Meanwhile - short sales and sales of foreclosed property (REO) continue on. 

So far - first quarter closed short sales in 2013 are up just a tad from first quarter of the prior year (+1%), while REO sales are up 13% in the same time period. It may be too early to tell exactly where we will end up by the end of this year but a look at the past 5 years…