Wednesday, March 02, 2022

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.

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Thursday, February 10, 2022

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.


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

Residential Realty News

Why Waiting To Sell Your House Could Cost You a Small Fortune

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.

Why Waiting To Sell Your House Could Cost You a Small Fortune | Keeping Current Matters

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.

Why Waiting To Sell Your House Could Cost You a Small Fortune | Keeping Current Matters

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.

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.

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Best Paint Colors for 2022

 

Picture of an off-white colored home from the sidewalk, with a large front yard and a white picket fence in the foreground.

©  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.”

A group of six images of living rooms painted and decorated in neutral colors.

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.”

A group of six images of home exteriors showing the most popular colors for the outside of a house.

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Thursday, January 13, 2022

Dr. Lawrence Yun's Outlook for 2022 Real Estate Market

 

By Jordan Grice                          Rismedia

 

2022 Housing Market Faces Changes Amid Economic and Regulatory Activity

January 13, 2022

 

With real estate professionals gearing up for another strong year, two of the industry’s leading experts dove into the most significant economic and regulatory issues on the horizon and their implications for the real estate market, during RISMedia’s Real Estate’s Rocking in the New Year on Jan. 6.

Last year saw record-level activity on home prices and mortgage rates. Still, it also left several challenges facing the housing market this year.

During the virtual session “The Economy: Where Do We Stand Now…And What Lies Ahead?,”  Dr. Lawrence Yun, chief economist for the National Association of REALTORS®, laid out his predictions for the housing market as the economic recovery continues amid the pandemic.

“The economy is expanding,” Yun said. “Every passing month we are generating new jobs.”

While Yun indicated that recent job growth has been lighter than previous months, he said conditions in the labor market are improving monthly, which is a good sign for the broader economy.

“Nonetheless, the job improvement is implying one thing for the housing market: the rental demand has certainly picked up significantly,” said Yun, adding that there has been a 5% uptick in rents as a result.

Rising rents, coupled with elevated inflation, will likely motivate more people to enter the home buying market in the future as a hedge against inflation, according to Yun.

“In a rising inflationary period, particularly where it really hurts rising rents, it will motivate some of the financially well-qualified renters to consider buying a home,” said Yun. “That is why I believe that the spring homebuying season will be very robust.”

Last year saw intense competition for a razor-thin supply of homes, which ultimately drove home prices sky high and squeezed buyers out of the market. Despite Yun predicting strong activity in the spring, he suggested this year might not be as intense as 2021.

He cited rising mortgage rates as one crucial contributor.

“We don’t know precisely when, but when the mortgage rates rise, it will make a sudden jump, maybe a 50-basis-point jump—so mortgage rates going from 3% to 3.5% in one or two week’s time span and then staying at that level,” Yun said.

Yun then pivoted his report to address concerns over inventory constraints, stating that supply chain bottlenecks that strained builders last year will possibly start to dissipate in the spring.

Another source of inventory likely to take hold are homeowners that participated in pandemic-induced mortgage forbearance programs that are winding down, Yun said.

“That program is ending, which means that homeowners in that situation have two options: find a job and start making payments or list the property for sale,” Yun said, and went on to suggest that a portion of homeowners will opt for the latter, which will add to the pool of new homes for sale.

“Overall, Spring homebuying season should be very robust,” Yun said. “Maybe not matching up with last year’s intense multiple offers, but one of the best in the past 20 years.”

On the regulatory and legislative front, 2022 promises lots of activity that real estate professionals will want to pay attention to, according to Ken Trepeta, executive director of the Real Estate Services Providers Council.

Trepeta hosted the “Inside the Beltway: What’s Happening in Washington and What Matters to Real Estate” virtual session, where he dove into the activity to come out of the Biden Administration this year.

“2022 is going to be a very interesting year with a lot of wildcards, and it’s going to be a heated political year,” Trepeta said. “It seems like it’s full steam ahead for all of us in terms of the housing market so far, but there is a lot that can happen, and there is a lot to watch out for.”

Trepeta indicated that policymakers would be prioritizing social justice and equity for minority communities in the housing, finance, and mortgage industries.

“I think we’re going to see activity out of the Consumer Financial Protection Bureau and the Department of Housing and Urban Development,” Trepeta said, he added that there will be a greater focus on fair housing, fair lending geared toward dealing with disparities in homeownership.

As a result, he encouraged the virtual event attendees to take a more proactive approach in their outreach plans and policies to account for minority groups and communities.

Trepeta also said that the industry should keep an eye on increasing emphasis on the environmental front pertaining to housing construction.

“There is this idea that there’s something wrong with single-family housing—that it’s somehow environmentally wasteful—that has caught on with a lot of folks in the bureaucracy,” Trepeta said.

He also indicated that some are pushing for more rental housing than single-family construction as a result.

“Anything that discourages new construction of single-family homes, in particular, is going to have an impact on inventory and prices,” Trepeta said.

Another metric that has captured headlines in recent months has been inflation, which has remained elevated since 2021.

How the Federal Reserve decides to address inflation in the foreseeable future leaves many questions, according to Trepeta, who pointed to recent announcements that interest rate hikes are on the horizon in 2022.

“Will it be under control and how soon will that be?” Trepeta asked. “I think that will definitely affect folks.”

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Friday, August 06, 2021

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.


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Sunday, July 18, 2021

The Housing Shortfall is driving up prices, but a crash is unlikely

 Summer of the Speed buyer

This recent article by chief economist of the National Association of Realtor's economist Lawrence Yun puts the current real estate market into perspective:

Remember when it could take years to sell a home.  MLSs were flooded with distressed properties.  In Miami, it was up to six years according to new accounts in the wake of the 2008 Financial crisis.

Today, of course, its the opposite story.  It's generally taking just of couple of weeks, and sometimes day, to find a buyer.  From listing to contract, homes sold in typically 17 days in April, the fastest rate ever.  In most markets, home buyers can't risk leisurely weighing several listings before committing to most likely the most expensive purchase of their life.  Rushed decisions can easily lead to buyer misgivings-about overspending for the home, its size, or having insufficient reserves for upkeep.  Still, most buyers come to see that they made the right decisions in these competitive times.  Seeing prices, and hence their wealth, rising helps.

Could it all crash as happened in 2008 to 2010?  Not likely.  The current housing cycle is fundamentally different.  We thankfully don't have risky subprime mortgages that overstretched buyer's budgets.  The gateskeepers at banks, mortgage brokers, and government regulators demand that loan-to-value ratios, debt-to-income ratios, and income documentation meet guidelines before a mortgage is approved.  To be sure, even with soundly written mortgages, we know some defaults can occur.

A second major difference is supply.  Leading up to the housing bubble heyday, builders overbuilt.  By my calculations, America had 2.1 million surplus housing units by 2006.  Following the crash, underproduction steadily chipped away at the surplus, such that inventory normalized by 2011.  Continuing underproduction led to the housing shortage.  By 2015, the shortfall was 2 million homes.  By the end of 2020, it totaled 4.8 million homes.  The lack of inventory is why home prices are in no danger of falling sharply.  

Homebuilding activity in 2021 will be slightly above historical norms, but it will take at least a few years to correct the massive shortage.  In the meantime, we expect the national median home price to rise 9% this year and another 3% in 2022.  Hyperseed homebuying should taper off by year's end as supply improves and affordability challenges persist.

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Wednesday, July 14, 2021

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 CoreLogicsaid 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 Americannotes:

“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 NARsays:

“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.

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