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Peter P. Ogilvie |
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New Canaan at Sept 2010New Canaan Real Estate thru Sept 2010 Real estate in this area has bounced back nicely, especially last Spring, though the Summer and Fall have experienced a major setback in sales activity. The road to prosperity is a bumpy one however so we go through fits and spurts. With year-end bonuses coming soon, the market should rebound nicely this Spring.
The supply of houses for sale has dropped sharply as sales have picked up and owners of overpriced listings have taken their homes off the market. Inventory is actually at its lowest level in years -- a very good sign for the overall market. The market is glutted only at the higher price points (so over $3MM). Unit sales jumped 49% after declining in each of the preceding two years. While the market is not back to its peak levels, the overall statistics look pretty good. Over half of these sales were completed in the 3rd Quarter, after having been contracted for in the 2nd Qtr. Unfortunately, the remaining buyers seem to have lost their nerve during the 3rd Qtr such that new contracts were scarce and market activity seems to have ground to a virtual halt. Brokers and sellers are all hoping for a strong resurgence in the Jan-Feb bonus season. Average sale prices appear to have bottomed out, tho median prices continue to fall as almost all activity is at the lower end of the market (so under $1.5MM). Activity at the top of the market is limited to truly spectacular properties, mostly equestrian and direct water. Proper pricing is of paramount importance. Well-priced houses sell within weeks. Over-priced houses take years to sell and often go for 50% of original list price… Condos are the weak sister in the market and thus show the greatest volatility. This year most condo sales closed in August, which is usually very slow. Demand for condos is building as our population ages; more and more buyers however are looking for ground floor living whereas most condos in New Canaan are townhousestyle. The supply of condos is off slightly (so 10%) from last year, but remains problematically high. Selling a condo today is a long, hard process; the market is glutted. Ironically, condo sales are up 100% compared to last year, indicative of the volatility of the condo market (and of small numbers). Interestingly, most of these sales closed in August, though no-one seems to know why there should have been this surge. The lesson is to be prepared for surges and spurts of activity in real estate.
Average sale prices for condos continue to decline, which is helpful for the longer term viability of the condo market. The price decline is also influenced by the absence of newly built condos for the past two years. Unfortunately, most condos on the market are “dated”. Rentals have dominated real estate for the past year or two. Supply soared as sellers were unable to sell their homes and tried to cover their cash outflows by renting instead of selling at a loss. More recently, the supply of rentals plummeted, causing rents to soar by 50% in some cases. Higher rents and the lack of attractive rental units is forcing some renters to consider buying instead; many of them are focused on condos. This is a wonderful time to buy either a house or a condo, assuming you have cash or assured financing; bargains abound. Listing prices are often very misleading however so use of a good broker is of paramount importance, as is tough bargaining. Homeowners can sell quickly in this market too as there is lots of pent-up demand, but pricing is key. Call me for a proper price evaluation.
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