Health of the market

The real estate market in Connecticut is showing signs of improvement. Home transactions increased approximately 17% year-over-year.

The median price ticked up 0.3% from $285,500 in May of last year to $286,250 in May this year. In Fairfield County, prices remained unchanged or slightly dipped. Greenwich increased 23% in sales transactions respectively. Greenwich sales volume increased 21% for the same period while prices in Greenwich decreased 2%.

The overall health of Connecticut’s real estate market is tied to slow job growth and its stagnant economic growth, according to some analysts. The Greenwich real estate market in the past has been more impacted by Wall Street and other economic developments. The Greenwich inventory has been low on new and renovated homes that are affordable in preferred neighborhoods. Sellers understand that their homes need to be renovated, decorated in today’s styles and organized to do well when they’re listed.

Buyers are well educated, discerning and cautious about purchasing homes. And it’s important to remember that home sales are still contingent upon a bank appraisal if the buyer is seeking a mortgage. Even with multiple-bid situations, homes are not going significantly above ask.

For example, there’s 21 Shore Acre in Old Greenwich with an asking price of $1,275,000. It sold for $1,357,000. Or look at 20 Winthrop in Riverside, which sold for $1,560,000 with an asking price of $1,450,000.  It could be argued that these homes were priced low in their price range and buyers quickly bought them for market value given comparables.

Homeowners across the country should be aware that lenders will be offering loan modifications soon in the mail to those who are behind on their mortgage payments. The Federal Housing Finance Agency launched a new streamlined modification initiative where mortgage servicers must offer borrowers who are three to 24 months delinquent a plan to assist them in avoiding foreclosure. Borrowers may be approved without providing and proof of hardship in repaying a loan with this new plan. This program also does not require paperwork, which simplifies the process.

The borrower need only make a new payment and they are in the trial period of the program. The borrower need not sign a new agreement or contract. Borrowers need only to make three timely monthly payments to finalize the modification. The program is for loans owned or guaranteed by Fannie Mae or Freddie Mac. The program is already under way and will last until Dec. 31, 2015.

The program applies to primary residences, investment properties and second homes. The resulting payment only has to be equal to or less than the unmodified payment. The arrears are added to the loan balance and the term extended to 480 months at an interest rate of approximately 4%. Should a borrower owe more than a property is worth, they will not pay interest on up to 30% of the loan balance still owed. The new program will not permit the principal balance to be reduced.

Homeowners may still apply for loan modification through Home Affordable Modification Program (HAMP) while making payments under the above program. Loans that qualify for modification through HAMP have to have been originated before Jan. 1, 2009 and the loan needs to have been held for at least 12 months.

The purpose of the revised program is to keep people in their homes and to further strengthen the real estate market in which they are located by not selling at a distressed price.

 

Mary Ann Clark is a Realtor with Coldwell Banker at 177 West Putnam Avenue in Greenwich. Questions or comments may be emailed to [email protected]

By participating in the comments section of this site you are agreeing to our Privacy Policy and User Agreement

© Hersam Acorn. All rights reserved. The Greenwich Post, 10 Corbin Drive, Floor 3, Darien, CT 06820

Designed by WPSHOWER

Powered by WordPress