Q. How have single family home sales fared in Hartford compared to the rest of Connecticut? How about compared to New England?
A. As RE/MAX New England reported in the Q3 and Q4 Housing Market Outlook, single family home sales showed double digit increases over the previous month in all six New England states. Transactions across New England’s major hubs are far surpassing the national increases with closed sales up 47.2 percent in Manchester, N.H., 40.2 percent in Boston, 21.5 percent in Augusta, Maine and 26.8 percent in Hartford.
Hartford, like the other areas across New England is seeing the strongest growth in the first time home buyer price range. The $8,000 tax credit coupled with low interest rates and excess inventory has really pulled people off the fence. As prices have continued to drop in the region, as much as 25 percent in some areas, buying a home as become more attractive – especially a first home.
Q. When do you see home values rebounding in Connecticut?
A. I like to use the word “recovery” rather than rebound. Recovery suggests a steady increase which is what we are seeing in the Hartford area. Every month this year, January through July, the number of homes sold in the Hartford area have increased month over month. This is a great sign.
As we all like to say with real estate, “location, location, location” never has that been a truer statement. There are very big differences in the housing market between some neighboring towns. Traditional first time home buyer communities like East Hartford and Manchester are already seeing the recovery with homes sales up 12 percent and 21 percent respectively over the last 12 months. However in towns with higher average sales, prices area are still struggling with sales down in Farmington (15 percent), Avon (36 percent), Glastonbury (38 percent) and Simsbury (37 percent). The city of Hartford continues to struggle as well with home sales down 25 percent, despite the opportunities that exist with lower prices and even special financing programs offered by the city to attract buyers.
Q. Are you personally seeing more home buyers now, than you did say 6 months ago? A year ago?
A. Absolutely! The number of buyers we are working with has continually grown each month since late March. As the weather warmed this spring the buyers came out of hibernation. Basic economic theory applies to the housing market – as prices have come down demand has increased. The $8,000 first time home buyer tax credit has been a very big motivator. The looming expiration date of that credit at end of November has also created a big increase in activity in the last few weeks. September looks to be the best month for us in the nearly five years I have been in business. We are all keeping our fingers crossed the credit will be extended into 2010 – RALLY CAPS on everyone!
Q. What has been more difficult finding people who are willing to buy homes or finding potential homebuyers who can find financing to purchase a home?
A. Actually the biggest challenge is getting both buyers and sellers to be realistic about their local housing market. What’s happening in California is not happening in Connecticut – what is happening in Glastonbury is not even what is happening in the border town of East Hartford. Buyer’s are watching the national evening news and hearing about the how the “sky is falling” in real estate across the country and want to apply that information to the local market. Yes prices are down, and yes we have more foreclosed and bank owned properties than we did one or two years ago. However, this is not Florida, California, or Nevada. Buyers are struggling when I tell them that inventory is actually down in East Hartford and that homes are being sold in days in multiple bid offers.
As you can see from the information above, seller’s are slow to react to a changing market and have taken too long to drop prices to keep up with demand. It is very difficult for a seller to hear that their home may now be worth 25 percent to 40 percent of what it was worth just 3 years ago. Even homeowners that made large down payments when they purchased their home 3 years ago have seen the market decline “eat” that equity and as a result can potentially be “upside” in their home.
Again despite what you hear on the national news, for the most part financing is not a problem. The state of Connecticut and some municipalities have programs that still allow first time buyers to finance up to 100 percent of the purchase price of their home. Has the bar been raised on who qualifies – absolutely. People that are in the position to buy, that is they have a credit score above 620, they have been working for 2 years and have some money saved will have no problem getting financing. If however, there has been a bankruptcy, inconsistent income and low credit scores the days of NO DOC/LOW DOC loans are over.
