Where Are We? — National Year-End Review

Existing-home sales increased 7% in 2015. Strong household formation — 1.4 million households were formed in the year-ending September. Distressed sales (short-sales and foreclosures) decreased last year. Home sales to investors, international buyers and second-home buyers also dipped.

Across the country, home prices slightly increased from 5% to 7%. Increases in home prices benefit home owners by increasing their equity position. Price appreciation differs in markets as it is dependent on available inventory and economic factors specific to the area.

New-home sales increased 13% last year. However, the majority of new-home sales was in apartment building and not single-family homes. (Source: Realtor.com)

According to chief economist of realtor.com, despite the 20% growth in new construction, only 900,000 housing units (representing less than 65% of new households) were created. A large amount of new households forming are renters. This is causing problems as renting households are finding it difficult to save in order to purchase a home.

Nonetheless, homes are still perceived as affordable despite increasing home prices.

Connecticut Review As Of November 2015

In Connecticut single-family home sales increased 6.3% last November as compared to 2013. The median sales price of a home in Connecticut was $236,000, a 3.7% decrease from $245,000 from the same time period the year prior. There was an increase of 136 homes sold in 2015 as compared to 2014 for the same time period. Condominium sales (includes town houses) increased 5.1% while sales prices dipped slightly (5.7%).

Regional Review As of November 2015

In the Northeast, home sales increased 1.5% with a median sales price of $254,800.

Mortgage Rates

There is good news regarding mortgage rates. The 30-year fixed-rate mortgage decreased back below 4%. According to Freddie Mac’s chief economist, U.S. Treasury bond yields dropped during a global equity selloff and investors seeking safer investments. The 30-year mortgage rate responded by falling.

Realtors in Greenwich are reporting an increase in showings and buyers making offers. Buyers are encouraged to learn and evaluate carefully the comps of properties under consideration. If the preferred property has distinctive attributes, it is advisable not to discount them in an effort to reduce the price. This will only cause issues in negotiation.  If the offer is significantly less than the list price and comparables, it will prompt the seller to reject an offer outright and taint negotiations. Terms and conditions need to be considered as well. Should a buyer be getting a mortgage, the rest of the offer needs to be reasonable. Sellers don’t want to be tied to a buyer that has made a low offer who may or may not be able to get a mortgage. The time until the mortgage contingency can be removed may prove costly to the seller. Buyers need to put themselves in the seller’s place to test how reasonable the terms of their offer.

Mary Ann Clark is a realtor with Coldwell Banker at 177 West Putnam Avenue in Greenwich. Questions or comments may be emailed [email protected]

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