Home prices are increasing

Single-family home sales increased 10.5% across the state of Connecticut during the first half this year. Last week it was also reported that single-family home sales across all counties increased during that time when compared to the same period last year.

In Darien, however, single-family home sales decreased over 16% although median sale prices increased over 15%. In the town of Greenwich, 299 properties sold in the first half of this year as compared to 257 in the first half of last year. The median home price went from $1,550,000 in the first of last year to $1,587,500 in the first half of this year, which is the highest first-half-of-the-year median sale price in Fairfield County.

Buyers are motivated by anticipated increase in interest rates. Mortgage rates have increased approximately 1% since May. The number of closed sales, pending contracts and decreasing home inventory are signs of a strengthening real estate market.

Home prices in Connecticut are increasing with median single-family home values increasing 2.7%. The median price of condominiums increased 5.1%. Buyers have increased in all price segments of the real estate market. Turn-key properties that are well priced and in preferred areas are getting a lot of showings and are on the market the shortest period of time.

An increasing number of renters are purchasing homes. The demand for rentals is starting to decrease and the median price for rental properties is holding at $1,450 per month in Connecticut.

During the first six months of this year, home prices registered their largest gain across the nation since the peak of the real estate market in 2006.

Home prices increased 2.7% in June, the largest half-year gain reported since 2005.

Last week the Standard & Poor’s Case-Shiller index indicated that home prices in 20 major U.S. cities increased by 12.2% in May as compared to May 2013. It also indicated that home prices are now down by 24.4% from their peak in 2006. This is an improvement of the “peak-trough” decrease of 35.1% that was reported in March 2012.

According to the quarterly Wall Street Journal’s survey of the housing market, Phoenix, Seattle, Denver and Sacramento had less than a two and one-half month supply of homes for sale at the current sales rate, while Dallas, Los Angeles, San Diego, Washington, D.C., and Orlando had less than three months of inventory. Real estate professionals consider a six-month supply of inventory indicative of a more balanced supply and demand market.

After the peak of the real estate market, sellers were having a difficult time adjusting to it being a buyer’s market.

Now buyers are having a difficult time adjusting to it being a seller’s market. Sellers are concerned about buyers performing once an offer is accepted.

Realtors are encouraging their buyers to be prequalified for a mortgage prior to their home search and learning about closing costs.

Sellers priced to sell are looking closely at the terms and conditions of offers they receive.

A seller does not want to be tied up for months while the buyer tries to obtain financing. Also, buyers trying to include additional conditions of sale outside of mortgage and home inspections represent concerns for sellers.

 

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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