Home prices are going up

It’s important to remember that pricing or positioning a property going on the market requires a Realtor considering comparable homes or land for sale and those recently sold.

A recent survey from Coldwell Banker found that turn-key homes are 10-30% of a home’s value. In Greenwich, a home’s location comprises 60% of its market value.

Reuters has reported that national home prices increased the most in more than seven years in May, with more increases expected in coming months, according to Corelogic. Home prices increased 2.6% from the previous month. This is the largest increase since February 2006.

With the exception of foreclosures and short sales, home prices were up nationally 11.6% on a yearly basis. Low inventories of homes for sale across the nation have driven home prices to increase. The inventory of existing homes is at its lowest level in seven years and the inventory for new construction recently reached a 50-year low point.

Unfortunately, not all markets are strong. It is expected that inventory will further decrease this winter. Typically, home inventory is approximately 15% lower in the winter than in the summer. Last year the winter inventory of homes for sale decreased 25%, according to the National Association of Realtors.

What are some of the contributing factors to the anticipated drop in home inventory? Distressed home sales are expected to decrease as fewer homeowners are delinquent on their loans. And while some construction is starting to increase, it’s only at 50% of the historic average of housing starts. Realtors are negotiating deals on homes under construction in areas of Greenwich. And, unless existing homeowners wishing to trade up find a home, they are not listing their current home.

The real estate market on the West Coast have shown the most price gains. Including foreclosures and short sales, the following states had the most price appreciation: Arizona, 16.9%, California, 20.2%, Hawaii, 16.1%, Nevada, 26% and Oregon, 15.5 %. Home prices, however, remain relatively less expensive when compared to the peak of the real estate market. Relatively, low prices combined with low interests has enticed buyers and investors.

Prices for all types of homes in Greenwich have increased 2.35% when comparing April of last year with April of this year. Single-family homes increased in price by 6.25% whereas condominiums decreased 13.75% for the same period.

So, as buyers expand their search if they cannot find what they’re seeking, it is important to know the following: Darien home prices increased approximately 20% and there weren’t any sales reported for condominiums. New Canaan reported about a 15% increase in condominium prices whereas home prices ticked down 1%. Westport single-family home prices increased about 36% while condominiums were down 100%.

All of this information comes from the commercial record.

Buyers are sensitive to price increases as it means that they can afford less and will be concerned about financing in those areas that are rising the fastest.

In closing, should a homeowner plan on selling their home, it is worth renovating kitchen and baths and decorating in today’s styles. How your home appears on websites is very important. Buyers are looking for turn-key properties that don’t represent work.

This preparation will pay off in attracting buyers.

 

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]

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