Fairfield County February 2022 Update

The 2022 real estate market begins where 2021 left off. Existing home sales reached their highest level since 2006, with the National Association of REALTORS® reporting sales were up 8.5% compared to the previous year as homebuyers rushed to take advantage of historically low mortgage rates. Home sales would’ve been even greater were it not for soaring sales prices and a shortage of homes for sale in many markets, forcing a multitude of buyers to put their home purchase plans on hold temporarily. 

For February, in Fairfield County,  single-family home new listings decreased 11.5 percent,  pending sales fell 12.3 percent, and inventory decreased 35.9 percent. 

2022 marks a new opportunity for many buyers to make their home purchase dreams a reality. But it won’t be without its challenges. In Fairfield County, the inventory of existing homes was at the lowest level recorded since 2003, according to SMARTMLS, and competition remains fierce. Affordability continues to decline as inflation, soaring sales prices, and surging mortgage interest rates reduce purchasing power. The sudden increase in rates and home prices means buyers are paying significantly more per month compared to this time last year, which may cause sales to slow as more buyers become priced out of the market.

A Few Thoughts about Real Estate Statistics

 Over the past 25+ years selling real estate in Fairfield County I have tried to stay on top of what is going on the market in the half dozen or so towns that I cover on a regular basis.  The plethora of statistical data now afforded to us via the Multiple Listing Service and other Real Estate informational sources makes it a lot easier than it was before homes were available to view on the internet.

Yes, back in the old days, we had a printed magazine that covered all of the listings that was not completely current to the day.  It was expensive to print out these behemoths and it took longer to sell homes than it does in this current period that we're living through (180 days was not uncommon).  But though it lacked in up to the minute information,  it allowed us to have a thoughtful look at homes.

Today, I see many agents producing monthly statistics about how this month compared to the same month last year.  There are some benefits in seeing these numbers, but having the bigger picture gives a more accurate indication of what is going on, in my view. That is why I tend to publish semi annual statistical data and observations.  It doesn't mean that I'm not seeing that same information, it's just that I know that some individual months may not accurately predict what is going to happen in the coming months.  

More and more states have started to relax masking mandates.  This may turn out to be another example of trying to see the short term picture, rather than trying to wait a bit to get a more accurate picture of what is going on.  Covid cases had gone down in the summer of 2020 to very manageable levels before the Delta variant hit, and numbers surged.  I think that it is important to  remember to look at the CDC guidelines before we think that the virus is totally manageable.  I will wait a bit before putting out 2022 real estate statistics.

Why You Might Want to Consider Listing Your Home before the Spring Market

Residential Realty News

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Many homeowners who plan to sell in 2022 may think the wise thing to do is to wait for the spring buying market since historically about 40 percent of home sales occur between April and July. However, this year’s expected to be much different than the norm. Here are five reasons to list your house now rather than waiting until the spring.

1. Buyers Are Looking Right Now, and They’re Ready To Purchase

The ShowingTime Showing Index reports data from more than six million property showings scheduled across the country each month. In other words, it’s a gauge of how many buyers are out looking at homes at the current time.

The latest index, which covers November showings, reveals that buyers are still very active in the market. Comparing this November’s numbers to previous years, this graph shows that the index is higher than last year and much higher than the three years prior to the pandemic. Clearly, there’s an influx of buyers searching for your home.

Also, at this time of year, only those purchasers who are serious about buying a home will be in the market. You and your loved ones won’t be inconvenienced by casual searchers. Freddie Mac addresses this in a recent blog:

“The buyers who are willing to house hunt in a winter market, when there are fewer options, are typically more serious. Plus, year-end bonuses and overtime payouts give people more purchasing power.”

And that theory is proving to be true right now based on the number of buyers who have put a home under contract to purchase. The National Association of Realtors (NAR) publishes a monthly Pending Home Sales Index which measures housing contract activity. It’s based on signed real estate contracts for existing single-family homes, condos, and co-ops. The latest index shows:

“…housing demand continues to be high. . . . Homes placed on the market for sale go from ‘listed status’ to ‘under contract’ in approximately 18 days.”

Comparing the index to previous Novembers, while it’s slightly below November 2020 (when sales were pushed to later in the year because of the pandemic), it’s well above the previous three years.

The takeaway for you: There are purchasers in the market, and they’re ready and willing to buy.

2. Other Sellers Plan To List Earlier This Year

The law of supply and demand tells us that if you want the best price possible and to negotiate your ideal contract terms, put your house on the market when there’s strong demand and less competition.

A recent study by realtor.com reveals that, unlike in previous years, sellers plan to list their homes this winter instead of waiting until spring or summer. The study shows that 65% of sellers who plan to sell in 2022 have either already listed their home (19%) or are planning to put it on the market this winter.

Again, if you’re looking for the best price and the ability to best negotiate the other terms of the sale of your house, listing before this competition hits the market makes sense.

3. Newly Constructed Homes Will Be Your Competition in the Spring

In 2020, there were over 979,000 new single-family housing units authorized by building permits. Many of those homes have yet to be built because of labor shortages and supply chain bottlenecks brought on by the pandemic. They will, however, be completed in 2022. That will create additional competition when you sell your house. Beating these newly constructed homes to the market is something you should consider to ensure your house gets as much attention from interested buyers as possible.

4. There Will Never Be a Better Time To Move-Up

If you’re moving into a larger, more expensive home, consider doing it now. Prices are projected to appreciate by approximately 5% over the next 12 months. That means it will cost you more (both in down payment and mortgage payment) if you wait. You can also lock in your 30-year housing expense with a mortgage rate in the low 3’s right now. If you’re thinking of selling in 2022, you may want to do it now instead of waiting, as mortgage rates are forecast to rise throughout the year.

5. It May Be Time for You To Make a Change

Consider why you’re thinking of selling in the first place and determine whether it’s worth waiting. Is waiting more important than being closer to your loved ones now? Is waiting more important than your health? Is waiting more important than having the space you truly need?

Only you know the answers to those questions. Take time to think about your goals and priorities as we move into 2022 and consider what’s most important to act on now.

Bottom Line

If you’ve been debating whether or not to sell your house and are curious about market conditions in your area, talk with a local real estate professional who can help you decide the best time to put your house on the market.

Best Paint Colors for 2022

 

©  Douglas Keister

Best Paint Colors for Selling in 2022

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February 3, 2022

Greens may dominate paint firms’ lists of the hottest color of the year, but neutral colors still reign for the largest buyer pool. Eighty-one percent of interior design experts recently surveyed say whites and creams are the best colors to use when selling a house in 2022, according to the Paint & Color Trends 2022 Report conducted by Fixr, a home improvement resource.

“Whites and creams make a neutral, clean, fresh backdrop for many rooms,” according to the report. “You can still include color in your textiles if you want to add personality to the space, but it can make it easier for prospective buyers to see their own furnishings in a space when looking at a white or light-colored wall.”

On the exterior of homes for sale, white is the most frequently recommended color for the second consecutive year, according to Fixr. White received 58% of the vote from designers this year. Off-white also has increased in popularity, nabbing 41% in this year’s survey.

“White and off-white can both make a home look fresh, clean, and new regardless of age,” the study says. “These colors have nearly universal appeal, helping improve the curb appeal of a home and making it more likely to sell in a timely way.”

 

Mid-Fairfield Update of Single Family Home Sales through July, 2021

 

Mid-Fairfield Update of Single Family Home Sales through July, 2021

 

By the end of July we usually have a good idea of where the market is trending for any given year.  The real estate market in Mid-Fairfield (Westport, Weston, Wilton & Fairfield) continues to function at a record setting pace. 

In Westport, through the end of July, there have been 339 closed sales of single family homes compared to 295 at the same time last year-an increase of 15%.  The median price of closed sales through July stood at $1,575,000 compared to $1,225,000 in July 2020.  This median price (+29%) still lags figures that we saw at the height of the last bull real estate market, but well above pre-Covid levels.

Weston is also on pace to have more home sales than in 2020, with 145 sales in 2021 compared to 127 at the end of July in 2020.  This is a 14% increase, similar to that seen in Westport.  What stands out is that there were 80 sales of over $1 million in 2021, compared to 44 such sales through July 2020.  The median sales price was up an astounding 59%, from $705,500 in 2020 to $1,125,000, the largest of any town in our group.

It is always interesting to compare sales in Weston and Wilton, which share many similarities, and have often had similar home values over the years.  Wilton saw an even bigger spike in sales numbers than Weston with 230 sales through July 31, compared to 166 in 2020.  This was an impressive increase of 39%, the largest of the group of four.  Million dollar sales also jumped from 36 in 2020 to 95 in 2021 (through July).  This increase was reflected in the median sales price increase from $760,000 in 2020 to $920,000.  That represents a 13% increase.  Median price points shift from year to year when comparing Wilton and Weston, which was higher last year in Wilton.  

Fairfield is by far the largest of the mid-Fairfield towns, with the most diverse housing stock.  As such total sales are always larger than in the other towns.  What has stood out thus far in 2021 is the big jump in homes sold so far this year above the $1 million mark.  Last year at this time there were only 88, compared to 158 this year-nearly double. The median price went from $639,900 in July 2020 to $725,000 this July, a 13% increase.  The number of homes sold also increased by 13%, from 494 through July 2020, to 558 in July 2021.

Home price increases for next year have been projected by most economists, although political, social and economic circumstances (as well as geological) may also impact those figures.  Current trends still point to high demand and low supply in our market.

4 Major Incentives to Sell This Summer

 

 

While the housing market forecast for the second half of the year remains positive, there may not be a better time to sell than right now. Here are four things to consider if you’re trying to decide if now’s the right time to make a move.

1. Your House Will Likely Sell Quickly

According to the most recent Realtors Confidence Index released by the National Association of Realtors (NAR), homes continue to sell quickly. The report notes homes are selling in an average of just 17 days.

Average days on market is a strong indicator of buyer competition, and homes selling quickly is a great sign for sellers. It’s one of several factors that indicate buyers are motivated to do what it takes to purchase the home of their dreams.

2. Buyers Are Willing To Compete for Your House

In addition to selling fast, homes are receiving multiple offers. NAR reports sellers are seeing an average of 5 offers, and these offers are competitive ones. Shawn Telford, Chief Appraiser at CoreLogic, said in a recent interview:

“The frequency of buyers being willing to pay more than the market data supports is increasing.”

This confirms buyers are ready and willing to enter bidding wars for your home. Receiving several offers on your house means you can select the one that makes the most sense for your situation and financial well-being.

3. When Supply Is Low, Your House Is in the Spotlight

One of the most significant challenges for motivated buyers is the current inventory of homes for sale, which while improving, remains at near-record lows. As NAR details:

“Total housing inventory at the end of May amounted to 1.23 million units, up 7.0% from April's inventory and down 20.6% from one year ago (1.55 million). Unsold inventory sits at a 2.5-month supply at the present sales pace, marginally up from April's 2.4-month supply but down from 4.6-months in May 2020.”

There are signs, however, that more homes are coming to market. Odeta Kushi, Deputy Chief Economist at First American, notes:

“It looks like existing inventory is starting to inch up, which is good news for a housing market parched for more supply.”

If you’re looking to take advantage of buyer demand and get the most attention for your house, selling now before more listings come to the market might be your best option.

4. If You’re Thinking of Moving Up, Now May Be the Time

Over the past 12 months, homeowners have gained a significant amount of wealth through growing equity. In that same period, homeowners have also spent a considerable amount of time in their homes, and many have decided their house doesn’t meet their needs.

If you’re not happy with your current home, you can leverage that equity to power your move now. Your equity, plus current low mortgage rates, can help you maximize your purchasing power.

But these near-historic low rates won’t last forever. Experts forecast interest rates will increase in the coming months. Nadia Evangelou, Senior Economist and Director of Forecasting at NAR, says:

“Nevertheless, as the economic outlook for the United States looks brighter for the rest of the year, mortgage rates are expected to rise in the following months.”

As interest rates rise, even modestly, it could influence buyer demand and your purchasing power. If you’ve been waiting for the best time to sell to fuel your move up, you likely won’t find more favorable conditions than those we’re seeing today.

Bottom Line

With supply challenges, low mortgage rates, and extremely motivated buyers, sellers are well-positioned to take advantage of current market conditions right now. If you’re thinking about selling, connect with someone from our team today to discuss why it makes sense to list your home sooner rather than later.

3% Interest Rate May be the New Norm

 

A 3% mortgage rate may be

 the new norm

But if home prices can't cool many buyers may miss out regardless

March 18, 2021, 10:20 am By Alex Roha

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For the third consecutive week, mortgage rates pushed past 3% – with the average mortgage rate for a 30-year fixed loan up four basis points last week to 3.09%, according to Freddie Mac’s Primary Mortgage Market Survey.

Rising mortgage rates typically signify a recovering economy, and despite applications for mortgages dropping week-over-week, Freddie Mac’s chief economist Sam Khater expects a 3% rate to sustain market interest for many potential buyers.

A number of economists say rising rates may just be what the industry needs to cool the insane housing demand the market has been struggling to maintain for months. Increased inventory was the initial hope. However, due to consistent materials supply shortages and lumber prices that are up about 200% since April 2020, builders’ confidence index dropped in March. Single-family housing starts declined last month.

“The elevated price of lumber is adding approximately $24,000 to the price of a new home,” said NAHB Chairman Chuck Fowke. “Though builders continue to see strong buyer traffic, recent increases for material costs and delivery times, particularly for softwood lumber, have depressed builder sentiment this month. Policymakers must address building material supply chain issues to help the economy sustain solid growth in 2021.”

Now, economists are keeping a watchful eye on the speed in which interest rates have risen, said Doug Duncan, Fannie Mae’s senior vice president and chief economist.

“Underlying Treasury rates have risen, though lenders have absorbed some of the rise by shrinking spreads, as confirmed by our recent Mortgage Lender Sentiment Survey results,” said Duncan. “While the rate rise will curtail refinances to some degree, 2021 is poised to be a good year overall for housing activity and housing finance, as the economy continues to recover and COVID-19 restrictions ease.”

Duncan said Fannie Mae is watching for risks around monetary and fiscal policy on interest rates moving forward, though none are an immediate threat as the Federal Reserve has not changed its FOMC statement for several months.

Nevertheless, mortgage rates remain near historic lows (they are still 0.8 percentage points below the 2019 average), but if the price of housing can’t cool in time, many first-time homebuyers may miss the chance to take out a record low rate. Despite this risk, Fannie Mae’s baseline view is that the recent rapid rise will not continue but that rates will drift only modestly higher over the remainder of this year.

“Essentially, we believe the Fed will keep policy accommodative for longer, not tightening until inflation clearly exceeds its 2.0-percent target for a substantial period,” Fannie Mae said. “This view is consistent with current market measures, such as Fed Funds futures, not anticipating any rate hikes until 2023 and, even then, at a slow pace.”

More Buyers Open to Relocating

 

Home Buyers Say They're Open                                                                    to Relocating Remote work has Americans spreading out and the trend doesn't look likeit's going anywhere any timesoon. More and more, Americans are moving further from city centers and into suburbs and exurbs.  In fact, according to one recent survey, two-thirds of participants said they either already had, or would like to, move  somewhere within 50 miles of their current home. Some even  wanted to move further, with 4 percent saying they moved more than 50 miles away and 10 percent said they'd like to in the future. In short, there are a lot of Americans who are using their newfound ability to work from home as a reason to move elsewhere - whether for extra space, privacy, or to save money. It's not surprising. It's also likely to continue. That's because, just 17 percent of respondents said they thought their work-from-home arrangement would end when the pandemic subsides, while 72 percent said they expect it to be permanent. More here.

Mortgage Demand Rises 17% After                                                                  the Holidays According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey, demand for mortgage applications was up 16.7 percent during the first week of January. The increase includes an adjustment for the holidays, but represents a significant spike from the previous week. Refinance activity was up 20 percent, while purchase demand rose 8 percent. Joel Kan, MBA's associate vice president of economic and industry forecasting, says the numbers contain evidence that first-time home buyers are becoming more active in the market. "Sustained housing demand continued to support purchase growth, with activity up nearly 10 percent from a year ago, " Kan said. "The lower average loan balance observed was partly due to a 9.2 percent increase in FHA applications, which is a positive sign of more lower-income and first-time buyers returning to the market. " Also in the report, average mortgage rates were up slightly from the previous week, with increases seen for both 30-year fixed-rate mortgages with conforming loan balances and loans backed by the Federal Housing Administration. The MBA's survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

MORTGAGE NEWS

More Buyers Buying Homes Sight Unseen How we buy homes has undergone a significant transformation in the past year. The proof is in newly released data that shows a record number of recent home buyers made an offer on a home without having ever visited it in person. The numbers, from an online real-estate portal, show 63 percent of buyers who purchased a home last year made an offer without having seen the property. That's up from 32 percent one year earlier and 45 percent in July 2020. So what's driving the trend? Well, mostly it's the COVID-19 pandemic. The virus caused us all to changethe way we do things,including buying a home. After its onset,home buyers became more comfortable using technology like virtual home tours to further explore listings that caught their eye online. It also meant more Americans working from home,which lead home shoppers to look for houses in areas that weren't as easy to get to for an in-person walkthrough. The combination of pandemic, technological advancement, and remote work means an increasing number of us have had to - or have chosen to - take our home search virtual. It remains to be seen, though, whether or not the trend will continue after the virus subsides. More here.

ECONOMIC NEWS

Will There Be a Buyer's Market In 2021? A buyer's market means there are more homes available for  sale than there are interested home buyers. When this happens, home shoppers have more negotiating power and time to choose - since sellers are less likely to have more than one offer to pick from. This was the case after the housing crash and financial crisis, when the market was flooded with homes but had few buyers, outside of real-estate investors looking to capitalize. So what should we expect from 2021? Well, most likely, not a buyer's market. The number of homes for sale fell significantly last year and remains low. Conversely, home buyer demand is elevated and has been for a while. That means, more buyers than homes,  which leads to competition and higher prices. But while home buyers aren't likely to find a buyer's  market, they will find conditions softening from last year. With mortgage rates still at record lows and  new-home construction improving, experts expect home-price increases to moderate and inventory to begin its recovery. In other words, the 2021 housing market won't be a buyer's market, but it should be  better than last year. More here. Thanks to Sue Baxter at FM Home Loans for sharing this information