Purchase and sale considerations

Investors have been driving up single-family home prices in areas across the country having been hit the hardest by the economic downturn and having the most distressed properties.

According to Standard & Poor’s Case-Shiller, the prices of the least expensive homes in Atlanta have more than doubled since March 2012.  Institutional investors have accounted for 14% of home buyers in Atlanta for the past two years, according to RealtyTrac. These investors are private equity firms, hedge funds and pension systems. Institutional investors are purchasing the homes to rent them.

Local investors have been saying that institutional investors have been out bidding them for a while. Investors and cash buyers have helped the real estate markets recover. Analysts wonder whether sales and prices will continue to rise should these buyers reduce their purchases.

In the New York area, institutional buyers only comprised 2% of the home buyers. Institutional investor percentage is the proportion of home sales from March 2012 through April 2014. This area covers Princeton, N.J., to New Haven and is different from the other regions a part of the Case-Shiller study. In the New York market, less expensive home prices increased only 10% during this time frame, which is significantly less than the other studied regions and slightly more than the 9% increase for higher-priced homes.

Greenwich has always had tax advantages relative to its surrounding areas. Last week it was reported that Stamford, in an effort to boost revenue and minimize the property tax burden, is weighing an increase in the conveyance tax rate. Currently, it is the only municipality in Connecticut that does not charge a 0.5% conveyance fee. Stamford’s conveyance fee is 0.35% on all real estate sales.

Property owners pay state and local conveyance fees when homes and businesses are sold. Municipalities can charge a maximum of 0.5% conveyance rate under state law with enterprise tax zones. The primary reason why Stamford has not increased the conveyance rate is because of seniors wishing to sell their properties.

Today’s buyers are willing to pay more for specific amenities in a home. According to a PulteGroup Home Index, 51% of buyers want their next home to be larger than their existing home and 64% want to move into a turnkey, which is a new or renovated home.

Among the most important features to buyers are his and her closets in the master bathroom, spa-like features in master bathrooms, a large eat-in kitchen with a kitchen island, and at least one bathtub in the home.

There are regional differences in desired attributes. In the Northeast, balconies off the kitchen and rooftop terraces are highly desirable. The most important areas to home buyers when selecting a new home are the kitchen followed by the bedroom and the living room.

Most importantly, buyers are seeking more efficient use of space and a greater area for work spaces like the kitchen. In Greenwich, Realtors are reporting that buyers are continuing to seek new or practically new homes having an efficient floor plan and supported by public utilities.

 

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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