State of Real Estate 2019

 Mar 5th, 2019

As always, I hope this finds you and yours in good times and in good health.  Here’s the official 2019 State of Real Estate. Figuring out the real State of Real Estate and where the market is headed is akin to forecasting where a storm will land and how bad it will be. Typically, real estate is affected by a variety of outside factors, i.e. interest rates, employment and sometimes the weather. Interest rate increases are a good example.  As agents, we can help clients navigate rising interest rates, as we can budget for them. When they start to go up, it often spurs sales because buyers can see that costs are rising, and they act in order to limit those increases.  Now, interest rates ticked up a bit but have come back down some. It appears that rates will remain fairly even over the next few years, having little impact on the real estate market. Weather is another valuable that impacts the market. Last year, sales were slow overall to get going. January was actually pretty good, owing to mild weather, but then we got slammed by 4 nor’easters in a row and things were fairly slow until April. Now, here we go again.

Uncertainty is bad for business.  What has been going on the past two years in Washington has been unsettling to the country. Politics impinges on real estate sales whenever buyers and sellers are unsure what will happen in the near to medium term.  The shutdowns affected the ability to process FHA and USDA loans. The stock market has been up and down. It’s hard to quantify the uncertainty factor, but easy to see that people don’t like to guess about the future.

While the national economy has recovered somewhat, CT still has a ways to go. CT is just not a business- friendly state, nor is it tax friendly to the elderly. People are moving to states with lower probate fees,  property and income taxes. Bottom line: slowly, more people are moving out of the state than in. More importantly, I’m seeing a population shift as well. Shoreline towns have experienced drops in population. In 6 years from Jul 1, 2009 to Jul 1, 2015 Guilford’s population decreased by 119, Clinton’s by 562 and Madison’s by 601, and Branford’s by 869. Meanwhile, New Haven has increased in population by 6,992. I don’t think that necessarily means that people are moving out of the shoreline to New Haven; it means that more new buyers are choosing an urban setting than suburban. You can see Guilford has been less affected- I think the new school’s impact is huge. Also, both Yale and Yale New Haven Hospital encourage shorter commutes and sustainable transportation, which does not bode well for towns farther out.  Not great news all around, but not too bad for Guilford.

Comparing sales from 2018 to 2019. Overall there was a slight downtick in both number of sales and prices. There were really no huge swings in most towns. Some experienced marginal gains while other saw some decreases. Using Guilford as a model I see the following: It appears to be about the same volume of activity year to year. From Jan 1, 2018 to Mar 1, 2018 there were 30 sales in town. In 2019 from Jan 1 to Mar 1, there were 29. A difference of one sale is no big deal, but the average sales price moved a fair amount. In 2018 the average sale was $386,941 while in 2019 the average sale was $437,774. In 2018 there were no sales during this time period over $700,000. In 2019 there were 4. My observation is that the affordable and well priced homes in the lower price brackets – under $400,000 – sold at a much better pace in Guilford. Please know that every town is different, considering location relative to New Haven and the shoreline. I’d be happy to look at your area for statistics relative to your town, price bracket and style of home.

NAR survey – A recent National Association of Realtors survey showed a breakdown of the changing demographics in buyers: married couples accounted for 63%, single females 18%, single males 9% and unmarried couples 8 %. Low inventory/high competition in the lower price bracket as well as lingering student loans hamper millenials and other first time buyers. Boomers are living longer. More buyers are looking at multigenerational homes; they are dealing with aging parents and homes they can live longer in (i.e. w/1st floor MBR, walk-in shower), or seeking in-law setups for adult children. Also, couples are having fewer children, requiring fewer bedrooms and less overall space. Schools are still important, and proximity to green spaces and veterinarians are emerging as more important factors than ever before. Access to mass transportation is a final consideration.

General comments– Realtors should always be honest with sellers about market conditions and pricing. I see too many properties on the market for a long time, many with their 2nd or 3rd  Realtor.  #1 should have been more honest. On the buyers/demand side- while it is slowly getting better for sellers, there is still a fairly large inventory for buyers to choose from. If you want a good deal (who doesn’t?), buy with your head and not just your heart. Banks and appraisals are unsurprisingly still making life difficult. Some prefer to rent as opposed to buying. Best to get a full document approval before you buy, not just a “prequalification”. Giving the seller the comfort of knowing they are dealing with an informed buyer who is prepared to financially perform will result in a lower price for you. Get current inre the buying process before you start looking. Things could be a little or a whole lot different now than when you last bought. For example, inspections are far more in depth than ever and I see more transactions falling apart as a result of buyers going into them uninformed and with unrealistic expectations. Realtors should attend with their buyers so issues can be easily explained and overcome. Legislation has also changed. If you have to sell in order to buy, be careful! Let’s talk! We offer a 2 hour “Boot Camp” to familiarize our clients with all the current issue from inspections, zoning, finance, contract and more.

Check out our web site Easy to negotiate, chock full of great information and some fun stuff. We are local and have a combined 130 years of experience. Meet Siena! Get a $500 credit at Sunset Storage.  Give us a call for anything, FREE advice, contractor recommendation, or just stop by for a cup of coffee.

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 All the best.

Allen B. Jacobs, GRI, Broker, Owner

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