2006 Year End Newsletter
GRODMAN & Assoc.
Reading between the lines. Due to certain technical difficulties beyond my blogging abilities, I was unable to place 3 Excel graphs on this blog. If you are interested in having the full newsletter kindly email me at firstname.lastname@example.org, and I will send it to you in Adobe Reader format.
It is clear from the above chart that 2006 was not a
banner year. All three towns in our Mid-Fairfield Area have seen a loss in terms of numbers
of sales. Westport’s Sales numbered 374 in 2006 compared to 471 sales representing
the smallest loss of the three towns: -21%. It is interesting to note that compared to
2003 (the 3rd best year in Real Estate sales), 2006 had only 24 fewer sales, or 94% of that
Weston’s performance was the most disappointing. The 128 sales, year-to-date, represent
a 28% drop-off from last year’s 178 sales. Weston had been striking in its consistency of
sales between 2003 and 2005, with totals of 187,191,and 178, respectively. 2005’s totals
were a slight decrease from 2004, but a far cry from the decrease seen in the past year.
Increased real estate taxes due to school improvement projects have probably been
influential. Due its smaller size, the 50 sale lossin Weston appears at first sight to be
monumental, yet all three towns experienced at least a 20% decrease from the previous
The average sales price chart is one that tells several different, and sometimes contradictory
stories. In the case of Westport, the average rose a little more than 13% from 2005 to 2006.
The current average sales price is now at $1,614,052. This should not be interpreted that the
average home increased 13% in Westport during past year. The figures in Westport have
been skewed by a much higher percentage of ‘high-end’ homes selling in 2006. A truer representation
can be seen when homes that were purchased and resold in the past year or so are
looked at. In several of these cases, homes actually sold in some cases for less than what was
paid in 2005. Average sales figures in Weston may be more emblematic of what has occurred
in the past year.
In Weston, the average sales figure dropped approximately 5% over the past year. The average
sales figure of $1,218,767 may be more accurate than the figure for Westport because
there have been fewer ‘high-end’ sales as a percentage of total sales than in Westport. The
inventory of housing stock in Weston is also more consistent than in Westport.
Fairfield represents the largest and most diverse market. The average sales price of
$863,374 is also a more accurate indication of the large number of sales under $1 million in
Fairfield. However, the 9% increase in 2006 vs. 2005 is not justified for the same reasons
previously mentioned. Though representing a smaller percentage of sales, Fairfield also saw
a higher than previously recorded number of sales over $2,000,000.
Just a very brief word about Average Marketing time. These times would appear to be tantalizingly consistent over the past 4 years. In fact, if one were to believe these figures, Weston’s marketing time appears to have decreased during 2006 from all previous years. The reason that these figures are totally inaccurate can be seen by looking at the average marketing times of all the properties currently for sale in Westport, for example, which is at nearly 120 days, whereas the average marketing time for sold properties is listed as being 97 days. That is because these figures do not take into account nearly half of the listings which have not sold.
Looking ahead to 2007. Although no one is sure of what will happen in the upcoming year, recent sales activity in both Westport and Fairfield has been more vibrant than expected. The
differences in that activity are worth noting. In Fairfield there are 38 properties under
binder and 61 pending sales. The average of those bindered sales is $681,003 and the average
of the pending sales in $949,587. Most of the Fairfield activity has been characteristic
of its sales base.
The Westport recent activity has been a bit different. There are 23 properties under
binder, for an average price of $1,715,230. The 32 properties under contract average
$2,108,469. This activity in the higher end may be a precursor in 2007 for the type of
‘bonus’ activity that Westport experienced in February and March of 2006.
The activity in Weston in recent weeks has been more modest. There are currently 4
bindered properties and 5 pending sales. Interestingly, the average of those listing prices
are $ 866,300 and $1,034,975, below Weston’s average sale price. That may be an
indication of the type of buyer who sees value in Weston.
Recent media coverage has indicated that the worst of the real estate ‘correction’ is behind
us. It is still too early to say if the potential buyers have accepted the pundits’ opinions on
such matters. The average Mortgage rates have actually decreased in the past couple of
months, and are still near record lows. This may be an indication of the Fed’s desire to see
an upturn in real estate prices (and indicate that the Fed is less worried about inflation).
During the period of 2003 to 2006, if one were to look at the average sale price as a rough
guide, Westport average sales prices increased 43%, Fairfield’s average prices were up
36%, and Weston prices increased 22% over that period. The 10% or so average increases
in Westport are not the type of inflation that the Fed is especially concerned about.
They are watching 20+% yearly increases in average values, such as were seen in Florida,
California, and Las Vegas. The price corrections in those areas have been in the order of
25% or more. Labor statistics that appeared today indicated that the economy continues to
expand at a healthy rate, and unemployment and inflation seem to be well under control.
These results will translate into increased real estate sales. The question of when this will
happen will be tied to consumer confidence. Positive changes vis-à-vis questions such as
the wars in Iraq and Afghanistan and the upcoming majority change in Congress could play
a major role in the public’s perception and regenerate the type of positive impetus needed in
the current real estate market.
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Westport, CT. 06880
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