I have to say, the market really did not “perform” the way we have traditionally grown accustomed to. What I mean by that is – there are usually peaks and valleys in the market such as spring and fall markets being the busiest time, with a “slow down” during the winter and holiday months. While this was is true to some extent, the peaks and valleys have not been as obvious as in recent years. This was partly due to the lack of consumer confidence, low interest rates and the extreme weather conditions, which all played a part in it.
Median home prices in Fairfield County declined 3% overall, while Brookfield saw a decline of 14% over the same twelve month period. It is important to point out that the median price is not a true reflection of actual pricing dynamics. In a “stable market” the median price would certainly be a true gauge, but in a “recovering market” such is this – the median sales price is more reflective of the type of home sold and not the actual price change.
Closed sales in Fairfield County at year-end saw a decline of 7% vs. 2010, but still ahead of both the 2008 and 2009 markets, while closed sales in Brookfield saw a decline of 25% vs. 2010.
It’s important to note that sales in the higher price ranges were inclusive of these numbers which would indicate that the discretionary buyers are stepping back into the market which will open up a broader sales platform for 2012. This year, Fairfield County kicks off to a good start in 2012 due to a strong year-end close with 4th quarter pending homes sales up 14% overall versus 2010.
Interest rates are still unbelievably low (currently, a 30 year fixed rate mortgage is at 3.25%). The tighter lending standards that are in place can certainly make it more difficult for some buyers to obtain a mortgage, but for others – it has given them the opportunity to purchase homes they never thought possible.
I am beginning to see a shift in the mindset of the buyers right now. It appears very few buyers are looking at homes as an “investment”, but rather “a place they can call home”. That’s not to say there aren’t investors out there, looking to buy a property at a “good price” and flipping it for a profit. What I’m talking about is the “traditional buyer” looking to purchase a home to live in. Before the market went crazy and prices sky-rocketed, “the plan” for the first time home buyers would be to buy a modest home, live in it for a few years then sell it. Pull the equity out of the home and then “move-up” to a larger home. Not so much the mindset of the buyer now, and for obvious reasons. Buyers are thinking a little more practical these days when it comes to their home purchase and are looking at the key factors that quantify the value of the home – price, condition and of course, location, location, location!!
It is important for sellers to understand that although our local real estate market is showing signs of revitalization, supply still exceeds demand, and buyers are looking for value! Buyers will pass over properties that do not meet their expectations and move on to the next. So it is critically important for sellers to maintain their home well and have it “show” its best – and of course, price it competitively!!
Looking back at the market over the last few years, if I had to take away one “good thing”, I would say that what I am seeing are that people are make wiser choices when it comes to their home purchase and realizing now that they should not over-extend themselves. There will be of course, people who want and who can afford those luxury homes, and that’s great– but no longer do I believe it is the “reach” of the “typical buyer” in our current marketplace.
The people that know me know I am a total optimist!! I think that is why I have become successful in my career as a Realtor. Knowing the tools to ride out the storm, and understanding that you always have to look forward! By looking for the positives and not dwell on the negatives – you find solutions!! “Look to the good” is what I always say, and realize that things will and are getting better!! I have counseled my clients the same way – discussing their real estate goals, whether buying or selling and helping them to realize what is their best plan of action given their particular circumstances.
I remain optimistic for 2012 due to home prices stabilizing, our improving economy, and the rise in consumer confidence, continued low interest rates and the pent-up demand of home buyers. These are all factors that will revitalize the market. Without anything unforeseen happening that could create uneasiness in our economy, I think we will continue to show good signs of improvement in our real estate market for 2012!
To view the entire Connecticut Market Watch Report, click on the following link: View the 4th Quarter 2011 Market Watch.
Just a bit about “us”…
Having the combined experience of 21 years along with my partner Laurie Levitt, we have seen the “changing markets” and understand the difficulties that are faced for both buyers and sellers. We offer our clients the highest level of service as consultants and advisors. If you or someone you know have any real estate questions or concerns, Laurie and I are here to help you get the answers you need — just give us a call!
Your Key Real Estate Team ~ Laura & Laurie