Home trends

Double-digit home price appreciation was seen last year in some parts of the country as prices increased upwards of 20%.

This year, however, home price increases in these areas have slowed as the number of foreclosures decreases and the number of investors purchasing fell. Realtors across the country are reporting that buyers don’t have the same “sense of urgency” as previously seen. Home prices increased 18% in Los Angeles during the third quarter of 2013 from the previous year as compared to 8% in 2014.

Should a property be priced high, buyers will wait for it to come down in price and it will sit on the market until it is appropriately priced. Buyers are not making offers on properties that are not perceived as being competitively priced (given solds and other listed properties in their neighborhood).

Sellers need to remember if a buyer is getting a mortgage, an appraiser will be assessing the home’s value. If an offer of sale is higher than the bank’s appraisal, the offer may have to be renegotiated to secure the mortgage.

The average time on the market for homes in Greenwich for the third quarter of this year is 146 days — up from 143 days.

The home price surge from 2012 to 2013 is attributed to the Federal Reserve buying billions of dollars in mortgage-backed bonds causing interest rates to drop to historical lows. Buyer demand increased and investors scooped up discounted foreclosures. As expected, the states with housing markets that suffered the worst because of the economic downturn and had the highest rates of foreclosures (i.e., Arizona and California) are realizing the most changes to price appreciation.

Markets where the housing recovery has been more gradual are seeing slightly better price gains this year. Household formation and job growth are vital to sustaining the recovery of a real estate market.

Another trend is that an increasing number of single-family homes have become rental properties, according to the 2013 American Housing Survey by the U.S. Department of Housing and Urban Development and U.S. Census Bureau. Reportedly, 65% of all homes were occupied by owners in 2011 while 35% were occupied by renters. Fewer homes, or 13%, remain vacant in 2013 as compared to 2011.

The American Housing Survey also showed that parcel or lot sizes are getting significantly smaller. The median size of a single-family lot was 0.25 acres in 2013, compared to 0.36 acres in 1973. Buyers are also increasingly seeking smaller homes and lots in Greenwich. This is attributed to people entering the market and downsizers seeking to minimize maintenance costs and streamlining their responsibilities.

Less is more is important to both the millennials and boomers explaining their demand for efficient homes that do not require renovation. Another factor affecting purchase decisions is weather. It is expected that we will be experiencing more extreme weather and this may also affect the types and location of homes selected by buyers.

Have a Happy Halloween, everyone.

Mary Ann Clark is a Realtor with Coldwell Banker at 189-191 Mason Street in Greenwich. Questions or comments may be emailed to [email protected]

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