ReCap of 2012 New Canaan Real Estate Sales

Happy New Year and welcome to a chilly New England week. After putting away the Christmas decorations and already breaking those New Years food resolutions I finally had a chance to look at the numbers for the 2012 New Canaan real estate market.

New Canaan real estate ended on a strong note with a higher than usual number of closings in November and December. The so called “fiscal cliff” and threats of higher taxes prompted buyers and sellers to seal their deals by December 31st.  All in all, we closed about the same number of properties in 2012 as we did in 2011. There is still a demand for new construction and 18 lots sold to make way for new homes.

The hardest part for me last year was finding the right house for a buyer ready to purchase.  There simply were not enough choices. Many homes had offers as soon as they were listed (read, they were priced right) and only a 140 single family homes were put on the market.

More numbers will follow. From all the signs it looks like we will have an upswing in the spring market. So what are you waiting for?

 

The State of the New Canaan Real Estate Market / a Snapshot of 2011

First let me thank all of my clients who ventured into the local real estate market in 2011. It is a joy and a privilege working with such wonderful people who honored me with multiple closings including the listing and selling of one of New Canaan’s landmark homes in less than a week. I appreciate all your referrals and business.

This past year was the second straight year of modest improvement for New Canaan real estate. While we are not back to our 2006 highs, we have experienced two consecutive years of volume and price appreciation.

The real estate market has stabilized.  We are getting more of the distressed properties sold and out of the bank system. It was predicted that Shadow Inventory (foreclosed or ready for foreclosure homes) would flood the market. Well, it never happened. Foreclosure filings in Connecticut dropped sharply in 2011 compared with the previous year, plunging 48%, according to RealtyTrac.

New Canaan saw year over year increases in every category, a trend suggesting a growing optimism on the part of buyers and sellers for 2012 market conditions. Here are some important numbers for the past year:

2011 Single Family Homes:

Median Price: $1.60 million as compared to $1.46 million in 2010, up 9.4 %

Average Price: $1.90 million as compared to $1.69 million in 2010, up 11.9%

Homes Sold: 214 homes sold in 2011 as compared to 195 a year ago, up 9.7%

Absorption Rate: 10.7 months of inventory compared to 15.38, an improvement of 30.4%

Active Inventory: 207 houses for sale compared to 236 a year ago, an improvement of 12%

 

2011 Condominiums:

Median Price: $657,000 as compared to $595,000 in 2010, up 12 %

Average Price: $711,000 as compared to $656,000 in 2010, up 8.2%

Condos Sold: 62 condos sold in 2011 as compared to 39 a year ago, up 59%

Absorption Rate: 7.88 months of inventory compared to 21.94, an improvement of 64%

2011 Land Sales:

Perhaps the most dramatic increase has come in the market for land sales, again indicating an increased optimism on the part of builders and their customers.

The median sale price for the 3 lots sold in 2010 was $1,025,000.  For 2011 the median price fell 31% to $700,000 and builders did respond, buying 19 lots this past year, an increase of 533% in volume.  New construction activity has picked up as a result; builders are buying land at a cost that makes sense to build, primarily midrange homes.

The rental market has improved. The absorption rate for rentals has dropped from 7.4 months to 4.1 months. That is how long the current inventory of properties would last at the current rate of sales. The number of rentals closed in 2011 increased 16.5% to 120 from 103.  And while the average rental price has increased 40% to $3550, the median rental price has increased 162% to $4200.  The rental market tells us a good deal about the broader market. The reduction in the rental inventory and higher rental rates is due to a number of reasons; tighter lending requirements, people’s damaged credit, loss of equity hence the inability to produce a down payment, job insecurity and the continued lack of confidence in the overall economy. For some it is a wait and see before purchasing.

The rental market is starting to produce much better cash flow and investors are actively purchasing more rental real estate.

Interest rates broke their historical lows of 2004-2005. The rates on average are about .5% to .75% below last year rates. A sample of rates as of first week of November 2011 with zero points: Loans under $417K=3.87% (conforming loans). Loans between $417K to $625K=4% (this is the new Jumbo conforming) Loans above $625K=4.5% (this is Jumbo loans). $729K  is no longer the jumbo loan limit.

This year was a much better year than last year and we expect it to continue to get even better next year.  The reason?  We’re experiencing an improving economy, low interest rates and an upcoming presidential election. Historically, presidential elections bring about increased real estate activity, and coupled with low interest rates and increasing consumer confidence, it will help the New Canaan market to continue to grow in the coming year.

Finally, it is always important to bear in mind that in real estate there are neither “good” nor “bad” markets.   The market is simply the market and value is ultimately a function of supply and demand.  In the current market cycle, as we see an alignment between the expectations of buyers and sellers, the statistics are encouraging.  But while statistics provide a snapshot of the marketplace there is no substitute for the full picture.   For reports like this throughout the year come visit my website, https://wendyfog.com  and please call me.

Wishing you and your family a prosperous 2012!

 

The Housing Update for New Canaan CT.

The New Canaan real estate market has been an interesting ride this year with fits and starts. Record low interest rates and realistic listing prices have resulted in increased sales within the higher price ranges. Of the 179 single family homes sold so far, 6 have sold over 5 million, 7 houses have sold in the 4 million bracket and 17 have closed over 3 million. In 2010 there were a total of 17 homes that sold over $3 million dollars. Land sales have also increased with 25 lots sold to date and ranging from $275,000. for a .12 acre parcel on Sunrise to $1,550,000 for 2 acres on West Road. The majority of sales in this category are end users with only a few builders dipping their toes back into the waters of spec. building. Condominiums sales are on par with last years numbers with 40 units closed to date. However, no sales have occurred over $1 million dollars compared to last year where a total of 43 units sold with 3 condominiums selling over that number. In addition, there are 24 properties currently pending which should close in the next month or two.

The  fall real estate sales are also ones to watch. They start right after Labor Day and goes through to Thanksgiving. Buyers are out looking and kicking tires, but the volatility in the stock market and general uncertainty is slowing down a traditionally healthy market place.

Housing Market Update for New Canaan, Ct

When Warren Buffet speaks, the volume on the TV goes up, phone calls are ignored and people weigh his comments pretty carefully. Recently, he said “[h]ome ownership makes sense for most Americans, particularly at today’s lower prices and bargain interest rates.” He also said of home ownership,”the third best investment I ever made was the purchase of my home” (wedding rings being his number one and two best investments). His approach to home ownership is based on 3 basic steps.
1. Buy a home you can afford. What is better is to buy a home that makes sense for your family’s future and its finances. In other words, make sure your eyes aren’t bigger than your wallet.
2. Plan to hold. Buffet’s stock investing advice has long been to avoid making investments you can’t hold for at least 10 years. Likewise, buying a home should be done with a long-term plan to avoid catastrophe when home values fluctuate in the short term.
3. Fixed affordable mortgages. A good rule of thumb is to stick with a fixed mortgage payment (including taxes and insurance) that’s under 30 percent of your take home income.
From the number of real estate sales so far this year, people are taking his advice.

[image title=”Yearly Comparison of Sales in New Canaan, CT 2007-2011″ size=”large” id=”1346″ align=”none” ]

So how’s the New Canaan real estate market now?

Lurking within the halls of the state governing bodies was the insane piece of legislation that proposed a conveyance tax on the home buyer. This just in from the Connecticut Association of Realtors, Inc:
“Senate Bill 1019, was killed in the State Senate. This bill would have resulted in ANOTHER increase in real estate conveyance taxes – this time on homebuyers! This is good news for consumers and the housing market. Thanks to all who helped protect CT home buyers! We appreciate the Senate not making it harder to buy a home in Connecticut.” Despite a painful and fragile real estate recovery government officials actually thought an additional tax would help matters? Government officials did however raise the existing real estate conveyance tax that home sellers are required to pay.
The New Canaan market continued to churn, albeit a little slower than during our active spring market….holiday weekend, graduations, weddings and summer activities have curtailed some of the momentum. Currently there are 252 homes on the market with 43 pending transactions waiting to close.
[image title=”weekly update 6.10.2011″ size=”large” id=”1168″ align=”none” linkto=”viewer” ]
[image title=”weekly update 6.3.2011″ size=”large” id=”1171″ align=”none” linkto=”viewer” ]

How is the New Canaan Real Estate Market?

The first quarter ended with decent home sales activity. Single family and condominium sales were up 33% from the same period last year. The remainder of the year should be better still for the followng reasons:
~ More jobs
~ Rising apartment rents
~ Rising stock market wealth
~ Home values at historically justifiable levels
~ Continuing high affordability conditions
~ Investors looking to hedge against inflation
~ Foreigners buying U.S. homes on the cheap
“Still the stars are not all aligned. High gas prices are a daily reminder that something is not right with the economy and will hold back consumer confidence. Washington policy makers are debating the ending of government quaranteed mortgages and requiring minimum down payment of 10 to 20% on conventional mortgages, even though the FHA and VA mortgage programs have very low down payments and have yet to require a single dime of taxpayer’s money”, writes a chief economist of the National Association of Realtors.
At least the improving 2011 market developments should outweigh the negative impact imposed by Washington policymakers. Having said that, here is last week’s market update…
[image title=”market update 5.20.2011″ size=”large” id=”1155″ align=”none” linkto=”viewer” ]
[image title=”market update-2 copy” size=”large” id=”1157″ align=”none” linkto=”viewer” ]