2009 New Canaan Market Summary
January 2010
Dear Brotherhood & Higley Friends,
2009 was a very complicated and difficult year for all of us and for residential real estate firms in particular. Brotherhood & Higley wants to thank all of our clients who were bold and ventured into the local real estate market and either bought or sold in 2009. Despite the tumultuous 2009 real estate market, we are pleased to announce that Brotherhood & Higley has maintained our first place standing for total transactions as we have for the past 25 years.
2009 Total Transactions (selling and listing)
2009 Average $ Volume Per Agent Transaction
The first half of 2009 experienced the slowest activity levels in the past 30 years. While potential buyers were not only waiting for prices to decline further, they were also very concerned about their own job security. Being unable to sell their present home or unwilling to take the ‘hit’ on their present home, buyers were not even searching for a new home until the middle of the second quarter of 2009. Sellers were slow to adjust their expectations and reluctant to lower their prices. As a result, few qualified buyers were able to negotiate a successful purchase. Banks’ lending requirements have become more prudent in contrast to the liberal lending practices of the last several years. These changing dynamics have created a new environment for our residential real estate market.
2007-2009 Residential Sales
On a positive note, our local real estate market became considerably stronger in the second half of 2009 – sales activity has seen an average of 24 transactions per month, which is consistent with the monthly transaction numbers of more robust years. There has been less interest in higher priced properties during 2009. The most active segment of our market were properties under $2 million, however we have recently seen more transactions in the $3 to $4 million dollar offerings.
2009 Property sales
We are optimistic that we will see a continuation of this positive trend in a stronger real estate market in 2010. Even though New Canaan properties have declined 20-25% from 2007 to 2009, property values are more stable as we approach the 2010 spring market. Interest rates are the lowest they have been in nearly 40 years. Some analysts believe that these low rates present a once-in-a-lifetime opportunity. Buyer confidence continues to improve as the media focuses on the stabilizing of the economy and the resurgence of the real estate market with increasing sales. This is a great opportunity to purchase and to sell. The new year typically brings new inventory to the market and should be matched with the pent-up demand for housing among those who typically choose the spring market to purchase.
Please give us a call if you would like to discuss the market.
Best wishes for good health, peace and prosperity in 2010.
Sincerely,
Hugh Halsell
Wendy Dixon Fog
Want to know what they are buying in New Canaan?
Yes, my third quarter Sold Book ( compilation of all homes sold from Oct ’08 through Sept ’09 ) recently arrived much thinner than previous years, but those buyers who have stepped up to the window have walked away with some incredible deals. As an example, an 11 thousand square foot home built in 2007 sold for under $6 million, a 7500 square foot home built in 2008 sold in the low 4 million dollar range and several houses consisting of 8,000 sq. ft listed in the $4 million category were obtained in the $3 million range. In the high end, meaning homes priced at $4million and up, homeowners accepted offers on average 12% below their last asking price. In many cases this was after several price reductions from the original value placed on the home. Across the board houses have sold for between 11% to 15% below their listed price. The most activity has been in the lower price ranges and inventory below $2 million has begun to dwindle. Less supply translates into a stabilization of prices if not an increase.
Sellers will begin to take their homes off the market for the holiday season. Look to see a number of those to return after the first of the year and it will be interesting to see if real estate stays on Weight Watchers or goes for some real gains.
Housing trends in New Canaan CT. January thru October ’09
This year’s fall season has seen the traditional influx of new homes to the market in the month of September. With a short window of opportunity before the holiday season sellers scrambled to list their homes in hopes of capturing those buyers who are taking advantage of low interest rates and greater inventory. Prices have stabilized and with banks continuing to offer low rates now is the time to get on board. My prediction is there will be an active market after the first of the year..not the market we saw during 2004-2006, but a healthy exchange in the number of transactions. All indications point this direction from the number of people attending public open houses to the increase in the number of showings on listed homes. Buyers are amassing information on specific homes and the market in general in preparation of moving forward after the first of the year.
What’s happening in the New Canaan housing market?
August house sales show an encouraging up tick with the sale of 37 single family homes. Buyers continue to take advantage of the sizeable inventory and choice. For the second month in a row the majority of homes were purchased under $2. million with 14 homes selling in the price range of $1-2 million and 12 homes selling below $1. million. 7 properties had sales prices between $2-3 million and the high end continues to poke along with only 1 sale at $4 million. Sales prices were on average 13% below original list price and 9% below final adjusted list price.
Since the end of August 6 homes closed and 7 properties have signed contracts. Typically September brings new inventory onto the fall market and 23 new homes have just been listed.
We all love data and easy to read charts so I have included one that compares the monthly sales from January 2007 to the present. All information was gathered from the New Canaan Multiple Listing which is a reliable source. There have been a handful of private transactions over the years and are not included in the stats. What is interesting and encouraging is the spike in the August 2009 transactions, a typically slower month than June and July. Expect to see it slow down next month and continue the trend through the winter months.
New Canaan Housing Trends
The lines on this chart show the relationship between how many homes are put on the market, how many are getting offers and how many are actually closing. At the beginning of the year New Canaan had 338 single family residences listed for sale and as of July 31st, there are 261. There is still more listing activity than there are sales, but notice how the lines are starting to converge. The trend is beginning to change. The strongest sales segment has occurred in homes within the price range of $1- $2 million: 37 homes have closed to date. This is followed by 16 closings of houses that sold for under $1 million. The higher price range has been the slowest with a total of 7 homes selling for $3 million and up.
It is still a buyers market, especially in the higher priced homes, but the selection of that perfect home under $2 million is beginning to shrink.
