Great Time to Sell and Buy

While inventory has been coming to the market slowly we are still at lower levels than we've seen in the past several years.  There have already been signs of movement in some of the new listings that have come to the market since the beginning of the year, an indication of the pent up demand and buyers that have already started to look at homes.

In the meantime, in the past month or so, there has been a shift in the mortgage market as already low rates have come down to truly historic lows. 30 year fixed loans, even Jumbo loans up to $2 million are now well below 4%-I've seen rates of 3.625% today from Skip Wasserman at Atlantic Residential for these fixed rates, and rates as low as 2.625% for 5/1 fixed Adjustable Rate Mortgages.

So what does this mean to the buyer and seller?   For the buyer this is a market where prices have recently been holding steady or even declining slightly in some markets.  Prices, therefore, are at reasonable levels.  There has been talk about the Fed raising the interest rates on mortgages at some point this year.  It's hard to say how much this increase will be, but let's just imagine what that would
mean for someone looking to purchase a home with a $800,000 mortgage (putting 20% down for a purchase of a home selling at $1 million).  At current rates the monthly cost would be $3648 per
month for a 30 year mortgage.  If the rates go back to the levels that we saw only one month ago, at 4.125%, the cost differential would be $229 per month, or $2,748 a year. Looked at in a slightly
different way, this type of change would represent a 12% increase.  Seen in a different way,
if home prices were to go up 12%, a home now selling for $800,000 would be the equivalent of a home selling for $896,000 if the rate was at 4.125%.

For the seller, the fact that rates are so low means that buyers can now afford more than they could even one month ago (see above).  This will increase the buyer pool in different price points, and should therefore may it easier to sell their homes (especially if inventory levels remain low). 

How To Avoid Costly Pitfalls when Selling Your home

How can you best prepare your home for sale and avoid common mistakes in the process (and fetch the maximum return for your investment)? 

I will be leading a panel of experts in two Adult Continuing Education classes to discuss all elements of the preparation process.  These classes will take place at Staples High School in room 1036 on Wednesday, February 4 and the following week on February 11th, from 7-9 p.m. Registration online is at www.westportcontinuinged.com, or by calling 203-341-1209.

Included among the panel will be a Real Estate Attorney, Professional stager, Building inspector,
Organizer, Appraiser, Mortgage Broker, Appraiser, Surveyor and Family attorney. 

This information should be applicable for those looking at the short or longer term.  Hope to see you there.

Late Summer Activity-Going into Fall

It is hard to believe how quickly the summer went. Maybe it was the rainy June that brought us slowly into summer, or the blistering days of July that made us want to not think about summer, leaving us with the month of August with its mixed weather. In any case, it is now officially autumn, and kids are back in school. The beginning of September with back to school and end of summer vacations is traditionally a slow period in real estate, and there were fewer new listings coming to the market. We're now seeing some homes that came off the market in the summer coming back to the market along with a sprinkling of new inventory. We're also seeing quite a few price reductions from homes that have been on the market for some time. The activity in general continues to be moving toward more historic levels in terms of total number of sales. I often watch what's going on in new construction as an indicator of local builder confidence. Westport has the most active market for new construction in Southwest Fairfield County. Thus far in 2013 there have been 53 new homes sold in Westport, compared to 43 at this time last year, representing a 25% increase. There are also 16 new homes under contract. In addition, there are 49 new homes being marketed at this time. About half of those homes are in the early stages of development. We will most likely also see some additional inventory in the early spring for new homes. At this rate, it looks like builders are figuring that there will be an increase of new home sales for 2014. These figures also don't take into account some custom homes that do not enter the Multiple Listing service. One of the trends that we've seen the last couple of years, and continue to see, are new homes being built on smaller lots. These properties often have access to city sewer and city water, making construction easier for builders, and allowing homes to fall into more affordable price ranges. Though the numbers in August were below those seen in the very brisk spring market, almost all towns saw an increase in the number of properties that went to contract, up significantly (more than 50%) in all towns except Weston which saw its number of 23 in August 2012 fall to 21 in 2013. Year to date though, Weston has seen a 52.5% increase (year to date) of overall sales. Changes in Mortgage rates do not seem to have overly affected the number of sales. On the price side, it may have had some impact on the average sales prices. The median sales prices are just about where they were a year ago, when looking at overall statistics.