Home prices

By Wednesday of last week, there were 41 price reductions on listed properties and this exceeded new listings, which was at 33, those with accepted offer and/or under contract, at 21, and those sold at 11.

This is a good reminder that pricing remains key in successfully selling a property. Many agents are working to align prices with the market and convincing sellers to do so. Some sellers have not gotten over the peak of the market prices.

And, as has been reported, not all markets in Greenwich are seeing increases in prices.

 

Nationally, home prices have increased the sixth consecutive month.

The median price of a new home increased 11.2% in August. This represents a two-year high in housing and is the highest level since March of 2007, according to the U.S. Census Bureau. Prices, however, are 30% below the peak of the market.

The price of new homes in August spiked 17% compared to August of last year. The number of homes that sold in excess of $400,000 rose significantly as well in August, according to the National Association of Home Builders.

As the prices of homes increased, inventories of new homes in August remained at record lows. It would take approximately 4.5 months to sell houses on the market at August’s rate based on information from the Census Bureau.

On a regional basis for August, new home sales increased 20% in the Northeast, 1.8% in the Midwest and 0.9% in the West. Meanwhile, new home sales decreased 4.9% in the South.

Reuters projects that home prices will increase 1% in 2013 and 2.5% in 2014. What this also means is that owners of homes can believe that investing in them is safe. They are becoming confident that they are not throwing away money to make improvements or renovations. Home Depot reported increased earnings over this past summer, making it one of the best for this season in some time. And what’s good for them can be good for a lot of people because investment in homes creates jobs and bolsters the economy.

Buyers are being enticed to purchase larger homes in recent months. KB Homes posted a 17% increase across the nation for larger homes. In Sacramento, Calif., sales of large-size homes increased 24%, with the average square footage rising to 2,100 in the second quarter compared to less than 1,700 square feet in 2010.

The demand for large homes decreased during the recession as more households had reduced incomes. The average home size in the early 1970s was 1,660 square feet and in 2007 it peaked at 2,521 square feet.

During the recession, average home sizes decreased to 2,392 square feet, but the average home size began bouncing back in 2011 and increased to 2,480 square feet, according to the U.S. Census Bureau.

With the increased affordability of larger homes and low interest rates, buyers demand returned for these homes.

 

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] or she may be reached directly at 203-249-2244.

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