National update on Real Estate and Mortgage Activity

HOUSING NEWS

New Home Sales About 17 Percent Higher  From Last Year As 2019 comes to a close, there are several signs that the housing market will be strong in the year ahead. Among them, new home sales might top the list. For example, according to  the most recent numbers from the U.S. Census Bureau and  the Department of Housing and Urban Development, sales  of newly built single family homes are now nearly 17 percent  higher than they were at the same time last year. Additionally, the amount of new homes for sale is now at a 5.4 month's supply. In short, demand for new homes is high  and that's good for the economy and the housing market.  So, what's driving the increased demand for new homes? A large part of it is mortgage rates. Rates fell in 2019 and  helped offset home-price increases, keeping affordability  levels manageable. Combined with a strong job market and rising wages, lower borrowing costs motivated more Americans to want to make  a move. With buying conditions expected to remain fairly  stable in 2020, more of the same is expected in the year ahead. More here.

FINANCE NEWS

Most Markets More Affordable than Historic Average Measuring housing-market affordability typically involves  making some comparisons. Of course, with any comparison,  what you discover depends on what you're comparing.  Home prices, after all, could be down from where they were  last month but up compared to the same time last year. That's why the best comparison is usually one that takes the broadest and longest view. For ATTOM Data Solutions'  fourth-quarter 2019 U.S. Home Affordability Report, they calculated current affordability levels then compared them  to their long-term average. What they found was 53 percent  of the 486 counties included in the report were more  affordable than their historic average. That includes counties in and around Chicago, Washington D.C., and New York, with areas like Orange County, CA and  Bay County, FL showing big gains in the past year. Todd Teta, chief product officer with ATTOM, says mortgage  rates and wages are key. "Homes were actually a bit more  affordable because of declining mortgage rates combined  with rising pay to overcome the continued price run-up," Teta said. "As long as people are earning more money and shelling out less to pay off home loans, the market should  remain strong with prices continuing to rise, at least in the near term." More here.

MORTGAGE NEWS

Mortgage Rates Remain Flat, Just Above Historic Lows According to the Mortgage Bankers Association's (MBA)  Weekly Applications Survey, average mortgage rates were  flat last week from the week before. There were slight increases to rates for 30-year fixed-rate mortgages with  both conforming and jumbo balances and loans backed  by the Federal Housing Administration (FHA). Rates for  15-year fixed-rate mortgages were unchanged week-over-week. Despite rates remaining just above historic lows, demand for mortgage applications fell from one week earlier. Michael Fratantoni,  MBA's senior vice president and chief economist, said home-buying activity is typically slow at this time of year. "We are in the slowest time of the year for the purchase market," Fratantoni said.  "Purchase application activity declined after the seasonal adjustment, but still remains about 5 percent ahead of last year's pace.  The increase in construction activity will bolster housing inventories, which should be a positive for purchase volumes  going into 2020." Refinance activity also fell last week, though it remains 128 percent higher than last year at the same time. The MBA's weekly survey has been conducted since 1990 and covers 75 percent of all retail  residential mortgage applications. More here.

ECONOMIC NEWS

Personal Income Up 0.5 Percent The Bureau of Economic Analysis recently reported on personal income,  which has gone up by 0.5 percent. Disposable personal income, which is the money left over after taxes, increased at the same rate. Personal  income was mostly unchanged the preceding month, so the most recent  increase could be a sign of a new trend. Personal consumption expenditures (the money that people spend)  increased by 0.4 percent after staying flat the preceding month. The  personal savings rate was at 7.9 percent, which is under the recommended 10 percent, but is still a good sign that Americans are saving some of  their money. In short, Americans are earning more, spending more, and are saving a decent amount of money. If this trend continues, 2020 could shape out to be a good year for the economy and consumers. More here.

Thanks to Sue Baxter at FM Loans for the use of this information.

Wilton July 2019 Update

There are currently 200 active single family listings in Wilton with a median list price of $839,000.  These are distributed with 72.5% under $1 million (145); 23.5% listed between $ 1 million to 2 million (47) ; and 4% (8) listed over $ 2 million.  There are 39 properties that currently have accepted offers or have gone to contract.

Sales of single family homes through July 31, 2019 have numbered 134, a 17.5 percent increase over sales during the same time period in 2018.  The median price thus far in 2019 has been $725,000 which is a $70,000 drop from last year, representing a decrease of 8 per cent. The 2018 median price
through July 31 was $795,000. 

There have been 105 sales under $ 1 million representing 78% of the total sales.  28 sales were recorded for homes listed between $ 1 million to $2 million, representing 21% of the closed sales and there has only been 1 sale over $ 2 million. 

A Hot July

As the weather improved we continued to see improvement over what had been a late spring market. The number of homes that have gone to contract have increased in all the Mid-Fairfield towns, though the coastal towns showed more activity than our landlocked neighbors.

Westport had 29 homes go to contract in July, a 74.4% jump over the previous July. On a year to date basis there has been a more modest 5.8% increase in properties that have gone to contract.  Year to date sales through July stood at 220 single family homes compared to 216 the previous year at this time-a 1.9% increase.  Inventory levels at 8 months have decreased, but are not at levels one would
expect in an active market.  These levels are somewhat influenced by new construction and other high end properties on the market which are selling more slowly than properties below $1.5 million.
The median price is currently at $1,295,500 ( off 2%) through July, but some higher priced sales should see those levels rise.

Weston continues to have a solid though not spectacular year.  The median price now stands at 852k compared to 820k at this time last year.  Homes that have gone to contract are up 6% and inventory has been dropping, though at 11 months it is still too high.  The high end is weighing on those figures.  In terms of sales, the 94 homes sold through July was the exact same number as through July 2014.

Wilton has seen a big jump in median sale's price to $870,000, compared to $790,000 last year, and homes going to escrow have increased 3.4% to 152, but sales have been lagging, with 125 through July compared to 136 through July, 2014.  Inventory levels fall into the middle range of 8.7 months.

Fairfield entry levels sales continue to go strong.  With 458 sales compared to 392 through July 2014,
Fairfield has been an active market.  Homes going to escrow have jumped 24% with 534 through July.  The median price is holding steady at $575,000 compared to $573k last year.  High end sales have also been lagging in Fairfield.

February is a hot month for entry level homes

The earlier months of the year are not always representative of the year as a whole, but there seems to be a pattern for entry level homes, as the sales numbers trended toward the lower end of the market.


Despite record amounts of snow falling the number of entry level single family homes that went to contract increased dramatically this February when compared to February 2014. In Westport 41 homes went to contract versus 25 in the same month last year.  The median sold price for homes selling in February was at $883,000 compared to $785,000 in Feb. 2014.   These prices are well below the median sales price for the end of 2014 in Westport, which was over $1.3 million.  These
sales represent both properties going under contract in early 2015 as well as late 2014 contracts.
The year to date median sold price of $1.2 is much closer to those year end figures, implying a jump in entry level activity this month.  The median price at this time last year was at $1 million, so the trend of lower priced homes going early in the year is something to look at in the future.


Weston also saw an active market, with 16 homes going to escrow compared to 9 in February 2014
and for the year there has been an 80 per cent increase to 27 properties compared to 15 through February of last year.  The median sold levels in February were at only $558,000 compared to $710,000 last February, a decrease of 21.5%.  Year to date levels are also down considerably to $690,000 compared to $833,000 in Feb. 2014.


Wilton saw the most dramatic increase in contract activity, 160%, with 26 homes going to escrow compared to 10 last February.   The median sales price of $779,000 for February was slightly below last year's median price but well below the February average of $1.2 million.  Year to date the median sales price is $830,000 vs. $705,000 at the same time last year.  For the first two months of the year there have been 40 homes that have gone to contract, an increase of nearly 74%.


Fairfield, whose market is driven in much greater part by the entry level has seen its year to date median sales price  increase slightly to $558,000, just below the 2014 yearly median sales price.
The sales numbers have also  sharply improved.  Year to date there have been 125 homes that have gone to contract compared to 76 at this point last year.  That is a healthy 64.5% increase.  For February that increase was 84%. 


Inventory levels are slightly above historic averages.  Much of this inventory is represented by homes that were on the market previously in 2014.  New inventory has actually decreased thus far this year.
The coming months should see vibrant sales activity.

Watch out for Ice Dams in Winter Weather conditions

An ice dam is a ridge of ice that forms at the edge of a roof and prevents melting snow from draining. As water backs up behind the dam, it can leak through the roof and cause damage to walls, ceilings, insulation and other areas. 

How do ice dams form? 

Ice dams are formed by an interaction between snow cover, outside temperatures, and heat lost through the roof. Specifically, there must be snow on the roof, warm portions of the upper roof (warmer than 32° F), and cold portions of the lower roof (at freezing or below). Melted snow from the warmer areas will refreeze when it flows down to the colder portions, forming an ice dam. 
Although the primary contributor to snow melting is heat loss from the building’s
interior, solar radiation can also pro-vide sufficient heat to melt snow on a roof.   Gutters do not cause ice dams to form, contrary to popular belief. Gutters do, however, help concentrate ice from the dam in a vulnerable area, where parts of the house can peel away under the weight of the ice and come crashing to the ground.


Problems Associated with Ice Dams 

Ice dams are problematic because they force water to leak from the roof into the building envelope. This may lead to: 
 Rotted roof decking, exterior and interior walls, and framing; 
 Respiratory illnesses (allergies, asthma, etc.) caused by mold growth;   Reduced effectiveness of insulation. 
 Wet insulation doesn’t work well, and chronically wet insulation will not decompress even when it dries. Without working insulation, even more heat will escape to the roof where more snow will melt, causing more ice dams which, in turn, will lead to leaks; and peeling paint. Water from the leak will infiltrate wall cavities and cause paint to peel and blister. This may happen long after the ice dam has melted and thus not appear directly related to the ice dam. 
 
Prevention 

 Keep the entire roof cold. This can be accomplished by implementing the following 
 Install a metal roof. Ice formations may occur on metal roofs, but the design of the roof will not allow the melting water to penetrate the roof’s surface. Also, snow and ice are more likely to slide off of a smooth, metal surface than asphalt shingles. 
 Seal all air leaks in the attic floor, such as those surrounding wire and plumbing penetrations, attic hatches, and ceiling light fixtures leading to the attic from the living space below. 
 Increase the thickness of insulation on the attic floor, ductwork, and chimneys that pass through the attic. 
 Move or elevate exhaust systems that terminate just above the roof, where they are likely to melt snow. 
 A minimum of 3” air space is recommended between the top of insulation and roof sheathing in sloped ceilings. Remove snow from the roof. This can be accomplished safely using a roof rake from the ground. Be careful not to harm roofing materials or to dislodge dangerous icicles. 
 Create channels in the ice by hosing it with warm water. Because this process intentionally adds water to the roof, this should be done only in emergencies where a great deal of water is already flowing through the roof, and when temperatures are warm enough that the hose water can drain before it freezes. 
Prevention and Removal Methods to Avoid 
 Electric heat cables. These rarely work, they require effort to install, they use electricity, and they can make shingles brittle. Manual removal of the ice dam using shovels, hammers, ice picks, rakes, or whatever destructive items can be found in the shed. The roof can be easily damaged by these efforts, as can the homeowner, when they slip off of the icy roof. 

 In summary, ice dams are caused by inadequate attic insulation, but homeowners can take certain preventative measures to ensure that they are rare.

Thanks to BIS Home Reporter for this report.

April 2013-a Hot Month

Not literally, but there was a sense in April that with low inventories prevailing it was time to act. The numbers continued to show strength. Closed sales in the month of April were up in every town, with Weston seeing a big jump relative to the previous year, though the numbers were solid everywhere. All towns are ahead of their 2012 numbers, though closed sales in Wilton for the month of April were exactly the same as in 2012, with 13 closed sales of single family homes. I always focus my attention on the sales going to contract in the month, the clearest indication of current activity. There again we see strong numbers everywhere. Weston and Wilton saw some big increases in April. Weston had 31 homes go to contract versus only 12 in April, 2012, and Wilton had 46 versus 24 the previous year. Westport had 52 properties vs. 45 in April 2012, and Fairfield 91 vs. 81 in '12. Stamford numbers continue to track along similar lines to Fairfield, with the lower end of the market seeing the majority of the sales. The 89 homes going to escrow in April compared to 63 in the previous year. Inventory in North Stamford continues to be relatively low, though movement has been slow as well. There continue to be situations with multiple offers for new inventory especially those that are seen as excellent value, and several new homes being sold before completion. Marketing times have been fairly steady, but Weston & Wilton have seen a marked increase in Marketing time, with April days on market in Weston going from 132 in April 2012 to 255 days in 2013, and Wilton seeing even longer marketing averages from 150 days in April 2012 to 282 days in April 2013. Sales in the beach areas along Long Island Sound are moving slowly, though typically these areas pick up activity in the warmer months. It is still premature to know whether they will be affected by the storm events of the previous year. Early indicators in May show a trickling of new inventory. I would expect to see this continuing through May and June.

March 2013 Activity in Mid-Fairfield

The early 'spring' activity that began in February continued at a rapid pace in March. Escrow activity increased in all towns that we're following, including Westport, Weston, Wilton, Fairfield, and I've added Stamford to the mix, which has a number of similarities to Fairfield. The hottest town in the mix is Westport, which saw 56 properties go to contract in March. The number of properties that went to escrow in Westport through March was 120, an increase of 64% over the same time period in 2012. March was also a good month in Weston and Wilton with 14 and 19 properties respectively going to escrow. Closed sales were down in Weston through March, the only town in our group that saw a decrease, but escrows year to date in Weston stood at 37 versus 23 the year before. Homes under contract remain a better indicator of the current marketplace. Fairfield and Stamford, the largest of the group, also saw increases in March escrow activity and closed sales. Their median sale prices are quite similar with Fairfield now at $535,000 compared to $505,000 in Stamford, but Fairfield's median price has seen a nice jump from 2012. Westport has seen the largest number of closed sales (79) through March, which is an indicator that the Westport market starting to heat up before the other markets that we're surveying. Wilton has also seen good numbers, though the median sales price in Wilton has only increased 1.9% through March. Housing inventory continues to be relatively low, though turnover is still behind the height of the market back in the 2004-2007 period. Fairfield's 6.5 month's of inventory overall is close to historic levels, though the high end in Fairfield continues to lag.

October 2012 Market Update

Sales continued at an increased pace in October, and inventory levels are slowly decreasing. In Westport 45 homes went to escrow in October 2012, an increase of 164% when comparing to the previous October. On a yearly basis escrows are up 9.5%, to 334, though closed sales are still trailing 2011 by 4.2%. The median price of closed sales is now at $1,207,500, slightly off from earlier this summer indicating more activity of homes selling for under $1million. Weston continued its steady improvement. The yearly median sales price now stands at $745,000, which is $5000 less than the October 2011 level. 20 homes bindered in October compared to only 7 in October 2011. The 125 homes that have escrowed in 2012 vs. only 80 at this time last year, represent a 56.3% increase. The month's supply of inventory is now at 9.9 months vs. 30.7 months at this time last year. There have been107 closed sales year to date compared to only 90 at this time last year, a solid 18.9% improvement. Wilton's median sales price of $747,000 is a fraction higher than Weston's, indicating that historic parity between these similar towns is returning. This figure represents a decrease on a year to year basis of 9.5%. Some of this was due to the October median sales price of $650,000. As in all of the towns that I follow, homes on the lower end of the market have dominated recent sales activity. October saw a big jump in average days on the market. Yearly averages for marketing time of homes has increased to 163 days, an increase of 41.7% over the previous year. These figures are likely influenced by new measures of calculating these times instituted by the multiple listing service. Months of inventory in Wilton is now down to 8.9 months, better than Weston's 9.9. Closed sales were up in October in Wilton, and year to date there have been 185 single family home sales compared to 153 in 2011, a 20.9% increase (also slightly better than Weston's). Lastly, the largest town in Mid-Fairfield, Fairfield, saw the median sales price in October go to $578,000, a 30.6% increase over the previous October. The yearly median sale's price of $549,000 continues to make Fairfield the most affordable town of the Mid-Fairfield area. The 38 homes entering escrow in October nearly doubled the previous October's activity. Year to date 598 properties have gone to escrow in Fairfield, a very solid 29.2% increase. Closed sales were also up in October (33%), and year to date there have been 519 closed sales, an increase of 11.9% over 2011.

July 2012 Market Update

Westport saw a continuation of recent trends with 37 homes going to escrow vs. 31 in July of 2011. Closed sales are still slightly off 2011 numbers but catching up. There have been 230 closed sales of single family homes with a median sales price of $1,250,000. The number of new properties coming to the market has slowed, though current inventory is still above typical levels. The condo market slowed somewhat in July, with only one property going to contract, but closed sales are exactly even with 2011 numbers, and inventory levels are now at 5 months supply, which is at or below typical levels. The median price of Westport condos is now at $645,000, a 15.4% increase over last year’s numbers. Weston continues to slowly improve. July saw 13 properties going to contract vs. only 8 in July of 2011, and pending sales should bring yield an increase in volume over 2011. The median sold price of $726,000 is off only 3% vs. 2011 but is still well behind levels seen in 2010 and 2009. Current inventory now stands at 12.2 months, a drop-off of 26% from 2011, so indications are that Weston is turning the corner. Wilton levels are still running slightly ahead of Weston. The Median price year to date is $772,000, and inventory levels are at 9 months. Closed sales are actually 25% ahead of 2011 and July saw a big jump in sales, 35 compared to 15 in 2011. Easton has also seen a nice bump in closed sales in 2011, up 68%, with 54 closed sales. The year to date median sold price of $575,000 makes Easton an attractive buy. Inventory levels have dropped 32% compared to last year but are still at nearly 11 months. Fairfield’s pace has been very consistent. The Median price is practically identical to 2011 levels, as is inventory. With a 5.5% increase of single family home sales, and a 20% jump in July sales, Fairfield should end the year in good stead. Condo sales are also outpacing 2011 levels and inventory is now at 7.4 months, an indication that the market is evening out. Though we are still in a seller’s market demand in lower price ranges has led to multiple offers, and has also led to decreased marketing times for condos in Fairfield. The largest of Mid-Fairfield’s constituencies, Norwalk, also seems to be following a pattern similar to Fairfield’s. Closed sales are up 9.7%, and July saw a 68% spike in sales. Many of these sales are in the lower end of the market. With a median sales price of $421,000, home buyers who could previously only afford condos can now participate in single family home purchases (though many of these homes on the lower end of the scale may require updating). Although the median price is still far from historic highs with lower inventory levels (currently at 7.4 months), we shouldn’t be surprised if the median price begins to rise.