The market? What is going on? Leaves aren’t the only thing falling. What to do?

According to a recent article in  the Hartford Courant –  Home sale price gains — key to the recovery of the state’s housing market — remained elusive in Connecticut in August, as prices paid by buyers slid for the fifth month in a row on a year-over-year basis, a new report Tuesday shows.

We just got an email from our political action committee pleading for attendance at a legislative breakfast. I quote from her email “Hi All – I hope you’ve paid attention and that you see that the real estate market is in a deep dive and that ‘everyone is leaving Connecticut and going to the Carolinas’, and I hope that you’re aware that companies and industry are leaving Connecticut because of the unfriendly business climate, there aren’t any jobs in Connecticut, our utilities are the second highest in the country, and that our taxes are almost the highest in the country……. and we’ve had some pretty difficult winters.  People are leaving the State (like lemmings, commented one broker in Fairfield County) for one reason or another – jobs, retirement, cost of living”

Yikes! So, now it clearly is a Buyer’s market with a huge amount of inventory to choose from. Buyers just do not have a lot of confidence in the stability of home prices. The American dream of owning a home and having it appreciate as has been our history. This has  just has not happened in the last 9 years. Now, no one wants to pay for property and have it lose money.  Great time for Buyer’s to buy. Buyer’s just need to 1) be careful, do your homework on value so you know, that even if the market continues to slip, you should be OK 2) get your financial house in order so that your offers looks more attractive to a seller 3)  for your protection your offer should contain an inspection contingency. There’s more but this is enough for now.

Sellers. What to do? I just read the report of a study saying that Americans now have the greatest gap between what they think their homes are worth, and what an independent appraisal shows.  You can see the problem here–how can we sell your property for what you want, if you think it’s worth more than the experts do?  That doesn’t mean that some buyer might not agree with you about value, but the general idea suggests that many homes wouldn’t sell for what the owner would agree to take.  If you have doubt about your properties current value, get an appraisal. That $400+- might save you a lot of headache and cost in the long run. Also, what is your ultimate goal?  This brings me back to the old proposition I have been saying for 36 years, that it doesn’t matter whether you sell low or sell high, as long as you are buying in the same type of market. Therefore, if you sell your current property for 10% less than you think you should get, if you are honest, you are probably buying your new property for the same differential. At some point, you need to move on with your life, whether that means upsizing, downsizing, changing towns, or just changing. It’s better to do that when rates are (still) historically low, which will matter more in the end than the price you pay. And it’s better to live your life in the present, not the unpredictable future.

Hopefully when you look at the leaves falling this fall, you will enjoy the beauty of the season.

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