‘The Soft Parade Has Begun’ For $Million Homes In CT
The Connecticut Business Journal reports on the housing bubble in that state. “Whether an anomaly or a harbinger of spring, the housing market appears to be cooling, even at the high end of the spectrum. ‘Throughout New Haven County as well as throughout Connecticut there is a softening, which affects the luxury home marketplace,’ explains James Porto, president of the Greater New Haven Association of Realtors.”
“Connecticut Association of Realtors President Mark Foreman reports January and February home sales down this year at every price level. ‘The agents I’ve talked with over the past couple of months say there’s definitely a reduction,’ he says. ‘What we have seen is a rise in the level of housing stock and time on the market.’”
“Guilford $1 million-plus luxury home listings skyrocketed from 11 in 2004 to 42 last year, a 281.8-percent increase. The number of sales remained the same, ten each in 2004 and 2005, but the average sale price dropped 20.4 percent, from $1,772,250 to $1,689,997.”
“In Milford, the number of luxury listings rose 253.8 percent, from 11 in 2004 to 42 last year, with 11 sales in 2005 versus ten the year before. Madison luxury home listings likewise soared, from 29 in 2004 to 67 in 2005, a 131-percent increase. Twenty-three sold in 2004 and 27 last year.”
“‘I’ve been shocked at the number of multi-million-dollar houses that have come on the market in the last month, from $3.5 million in North Haven to $5 million in Madison,’ says (broker) Barbara L. Pearce. However, ‘I haven’t seen houses in that price range closing, so I’m kind of wondering what’s going on there.’”
“She has a theory. Pearce says she suspects that ‘Things are coming on [the market] as though prices were going up at the same rate they were a couple of years ago. But I don’t think that buyers believe it.’”
“‘In 2004 and 2005, we would see houses go into multiple offers within hours,’ (agent) Lory Walz recalls. ‘Since last summer, we’ve been seeing price reductions, and more inventory is staying on the market a bit longer.’”
“Upward creeping interest rates are having an impact, on builders as well as buyers. ‘While they’re still low, every time they go up a little, it takes out a sector of the market,’ says John Shwecky, president of the Home Builders Association of New Haven County. ‘The market has been falling down for homes $1 million and up,’ Shwecky adds, ‘and some builders are actually having to give a little more options when they sell.’”
“Rising interest rates have transformed the mortgage lending landscape over the past 12 months. ‘Volume is down in the 25-percent range,’ says Christopher Danner. Danner notes that interest-only loans are popular now, as are reverse mortgages for older people with liquidity ‘who can’t afford’ to live in their homes.”
Here’s a quote from the New Haven realtor president:
‘ While 2006 may see some ‘pricing adjustments’ I believe it will be a fabulous year for all of us.’
And a reader sent in this quote from a Connecticut MLS official:
‘Whenever we gather people just love to talk about real estate and as Real Estate professionals we inevitable get asked ‘How’s the market’? For many of us our answer may be influenced by what is currently happening (or not happening) in our individual business. Let me suggest that the way we answer that question, potentially can affect our local market. I don’t mean we need to be ’spin doctors,’ but as the local experts, our words have the power to instill confidence or concern. What buyer will want to buy today if he thinks by waiting he can get a better buy? There may be a slow leak in the real estate balloon, but it is not about to burst. No Henny Penny, the sky is not falling. It still is a wonderful time to buy and sell real estate. ..So when you are asked ‘How’s the market’? consider answering along the lines of a well known real estate trainer: ‘Unbelievable.’
Sounds like this guy could work for the Bush Admin. and give us some good updates on the war in Iraq.
Please leave politics at the door, they just pollute the blog.
Jeapordy game answer: ‘Unbelievable’
The implied question: ‘How’s your realtor?’
Why don’t you just come out and say what you mean here? Just lie about what is going on so some poor bastard is convinced to buy an asset that will most likely bankrupt him and his family while you go spend the 10K you got for opening the door for him. You f*@King scumbag!What a bunch of absolute A$$holes these people are. Do they have no conscience at all? Do they not see what they are doing to the folks taking their advice? This just pisses me off royally.
I’m with you auger-inn . Cant realtors t say ‘Interest rates are up,
the inventory of listings are high , and its appears that the prices went to high last year ,so a correction is in order .To the degree of the correction is a matter of opinion ,but its something to investigate before purchasing .If you want to sell I would not want you to miss you opportunity to sell if the market might be worst in the near future if the correction is more or interest rates go up more than some people hope for ,”
Better yet , why don’t realtors say they just don’t know ?
“‘I’ve been shocked at the number of multi-million-dollar houses that have come on the market in the last month, from $3.5 million in North Haven to $5 million in Madison,’ says (broker) Barbara L. Pearce. However, ‘I haven’t seen houses in that price range closing, so I’m kind of wondering what’s going on there.’”
“She has a theory. Pearce says she suspects that ‘Things are coming on [the market] as though prices were going up at the same rate they were a couple of years ago. But I don’t think that buyers believe it.’”
Sounds like she has been reading here…
Smart woman. She should probably keep reading. She’ll learn quite bit.
BayQT~
quite bit = QUITE a bit. Dang it. I didn’t proofread.
["In the 1980s, buyers were highly leveraged and banks were doing drive-by appraisals with 100-percent financing," says Walz. "Now people are more conservative about their purchases and financing."]
say what?
["The market has been falling down for homes $1 million and up," Shwecky adds, "and some builders are actually having to give a little more options when they sell."]
{”Once you get into the $2 million to $3 million range, that’s a marketplace that doesn’t get affected by the economy,” says Doran, managing partner of South Cove Landing, LLC in Essex.}
THIS IS IN THE SAME ARTICLE!
*yawns*
whatever happened to the Wall St. bonuses saving the CT market? oh wait, most of those guys already own. the few who don’t aren’t dumb enough to buy into this market.
take a look at what $1 million gets you in southern CT. no wonder these places aren’t selling.
you need to make at a minimum $250,000 to safely afford a $1 million house (assuming 20% down). Is it any surprise that people such as this aren’t jumping up and down at the chance to live in a run down 3 BR /2Ba raised ranch built in 1965?
EARTH TO SELLERS: MILLIONAIRES DO NOT WANT TO LIVE IN YOUR SH*TTY MIDDLE CLASS HOMES.
Yep, that’s what they’re saying here in Westchester too. Even my more sensible friends say the market can’t soften because of all the Wall Street money. It makes me laugh. What Wall Street tycoon is going to spend $1 million on your “as-is” starter home on .11 acres?
how about this 2 BR /1 Ba BARGAIN in Rye, NY for $820,000?
http://www.realtor.com/FindHome/HomeListing.asp?snum=1&locallnk=yes&frm=bymap&mnbed=0&mnbath=0&mnprice=800000&mxprice=850000&js=off&pgnum=1&fid=so&stype=&mnsqft=&mls=xmls&areaid=1394&poe=realtor&ct=Rye&st=NY&sbint=&vtsort=&sorttype=&typ=1&typ=2&typ=4&x=45&y=7&sid=0667A36994C9C&snumxlid=1057225367&lnksrc=00002
it’s got a huge 0.11 acre lot, and look like it hasn’t been worked on since it was built for someone’s cleaning lady in 1920. Cozy!
That’s funny, I’ve actually passed that house on my bike this weekend, but I had no idea what they were asking for it. Even for Rye, that’s shameless.
I rent a place in Rye that’s about the same size for less than half the cost of owning that place. If you eliminate the 20% downpayment (a mere $164,000), the cost of renting is approximately 1/3 the cost of ownership.
it is hard to imagine who is buying right now.
I rent a place in Harrison (spacious place, but on a less than great street in the “wrong” part of town) that was just appraised at $1.2 million, my landlords claim. Again, for less than half the cost of owning.
Ditto, New Canaan.
Yep, no bubble in that neck of the woods. What an effing joke. The very fact that anybody would price that house anywhere in the world for over $100,000 amazes me. What a complete dump. I don’t care if that place sat on the beach in SoCal.
Rationality left the real estate market years ago, and prices will have to drop 50, 60, 70 percent or more for places like that dump to be priced anywhere near what they are truly worth.
The only “millionaire” moving into that pile of lumber is some make believe, $30K/year whack job, who lands himself an Option ARM liar loan with the hopes that an even bigger fool will come along before his teaser resets.
This is happening all over this country and yet, all the bigshots are pretending like everything is just great. Somehow, evolution quit a few years ago, or the fittest just quit having children because we are truly a country full of complete utter morons.
You got that right. Did you see the 550K one bedroom loft on Commerce Street I posted on here over the weekend?
And look at this! This works out to be over 500K in Austin, TX for 1800 square feet! No wonder they advertised it in San Diego. People in Austin would have you binned for less than this!
http://sandiego.craigslist.org/rfs/147906669.html
It looks like a 2 year old lego build!
And Charming. You forgot CHARMING!
well, for many wall street employees 1 million is just the year-end bonus. If they are as clueless as they were regarding the stock market around 2000, they might well use that money to hold up the housing market in their area a little longer…
depends on how you define “many.” sure, there are far more wealthy people in the NYC area than in most places, but $1 million bonuses are still the great exception, not the rule. also, the number of wall streeters in general is often greatly exaggerated. the street employs about 200,000 total. hardly enough to dominate the RE markets of NY, NJ, and CT completely
And in any event, you still need people in on the entry level to sustain the market. As mentioned before, the Wall Streeters aren’t interested in these $700,000-$1,000,000 “starter” places. Nor are the empty nesters. The people who would normally purchase these houses are the first time homeowners, and they are pretty much priced out at this time.
They might check their numbers: “the average sale price dropped 20.4 percent, from $1,772,250 to $1,689,997.”
I wish it was a 20% price drop but it’s more like a 5% drop. You would expect them to make a mistake in the opposite direction.
commission on that average sales price is still north of $100,000.
pretty good incentive for Realtors to start talking down their clients expectations so they can close deals
No it isn’t. Nobody is paying 6% commission on houses north of $1 million. Try 4%, max.
you are right. if they are paying 6%, they are on drugs, shy and nonconfrontational. that’s not right.
http://www.dcbubble.blogspot.com
Can anyone PLEASE enlighten us on how the UK handles it? The rates are supposedly 1-2%, per side or total, I don’t know which.
don’t know about the UK, but in the Netherlands the rates have been around 2% for normal homes and a bit lower for more expensive homes (over 500K euro orso) for many years.
I can assure you that RE agents get filthy rich from this (sometimes); they even got rich on this 2% commission 15 years ago when home prices were 5-10x lower than now.
Last 1-2 years rates are dropping below 1% here ( with a-la-carte services where you do part of the work yourself) and there is more room for negotiating.
Part of the explanation for the lower fees is that for most RE agents the properties they represent are very close to their office (within a few km) so they don’t have to spend as much time traveling as in the US.
That’s not true.
if the stock market cools, Ct homeowners are going to really feel the pain, especially those within commuting distance to high paying wall street jobs.
http://www.dcbubble.blogspot.com
I live in Manhattan and was looking to buy a house in the ‘burbs. Showed up at the realtors feeling good and ready to look. Moving to the ‘burbs I yelled! What’s you price range?, the broker asked. Feeling flush with a nice bonus, I said “half a mil, honey.” She smiled and said that she had a few in that market. My day ended exactly 7 minutes later when we pulled up in front of what could generously be called a cottage. This is not going to work, I said. The broker patted my knee and told me that my dream didn’t need to wither on the vine. Yea, I said. It must. Oh sweet house, why hast thou forsaken me? Was I not worthy of the ‘burbs?
LOL, Bank. My wife and I went through a similar experience. We truly wanted to cry when we pulled up to our starter home at 700k, supposedly 4 bedrooms if you can accept on of the bedrooms not being able to fit the crib and the “master” bedroom only big enough for a bed OR dresser (but not both).
Renting a supposed $1.2m house for $3,200 now. $3,200 doesn’t get you much around this neck of the woods, but I’d rather pay $3,200 for a pile of shit than $6,000.
Bonk, you need realtor.com to do some property searches. You could have saved yourself some time.
bad math on the decrease in prices. that’s a 4.6% decrease, not a 20% decrease.
Things have cooled throughout Connecticut- from entry level low priced condos (conversions) to upscale townhouses, mid priced SFH’s and upscale listings- Wall street may be up- but thus far it has not helped the slumping RE Market. Everything is just sitting on the market longer-with listings growing larger everywhere. The spring season is turning out to be slow. I read the local listings weekly- have seen no price drops as of yet- but if things do not begon to move the reductions will begin.
YO, why all the hate for the realtor? Capitalism is a game to separate the stupid from their money and they are playing it in the great time-honored fashion—along with car salesman, insurance people, car repairmen, o the list does go on. How about blaming the people who made this happen instead, and who will probably try to keep it going? Write your congressperson. And save a little hate for the Enron guys, the Worldcom people, maybe the kids at Halliburton, etc.
I mean, it’s like calling the miners jerks for cashing in on the California gold rush. Hello, they just went where the money was. No I am not a realtor.
To Catsipt1,
Because Realtors, quote (having taken ethics courses), should try to apply them in their business dealings. Slimy dealings here as will be apparent later this year are going to affect a huge section of people that didn’t partake in or overindulge in this housing fiasco. The ones keeping it going are the front line realtors feeding the news media and those entering their office with chocolate covered pap and then lining them up with mortgage lenders and appraisers to seal the deal.When they’ve priced themselves out of a job like in Medera (they can’t even get a job selling cars) I will gloat, and gloat, and gloat.But I’m sure that there’ll be an abundance of WalMart greeter jobs for the asking.
I’m just amazed at the obscure Doors reference in that headline!
Not obscure — “Soft Parade” is a well known Doors song and the link to New Haven is especially appropriate as the New Haven Coliseum was just imploded this year and that locale is where Jim Morrison was arrested on stage for allegedly whipping his wanker out during a show.
Blood in the streets in the town of New Haven
Blood stains the roofs and the palm trees of Venice
Blood in my love in the terrible summer
Bloody red sun of Phantastic L.A.
Peace Frog - The Doors
A great song that leads into the very peaceful “Blue Sunday.” Doors were a very big part of my youth (early 80’s).
New Haven County is at the very edge of commuting distance to NYC, and Wall Street money should not be influencing the RE prices of places like North Haven. There are wealthy people in the county and many upscale houses, but Ive seen a lot of home improvements done by owner-occupiers, not flippers. Ive seen some rather nice kitchen renovations at parties. The numbers of homes quoted in this article (
The numbers of homes quoted in this article ( less than 50 in each market segment) is too small to be investor-driven. New Haven Co. is not like Westchester CO in NY or FairfieldCO CT. The outrageous RE listing quoted by others in this thread are not from NH County. The bump in the expensive houses for sale could be owner-occupiers trying to time their downsizing move. The empty nesters are legion in this neck of the woods.
many of the houses in Westchester and Fairfield appear to be oldsters trying to downsize as well. there is a huge number of $2 million+ homes for sale in these areas. seems to me these people, who have likely owned for a long time, can afford to make deep cuts in price and still make a healthy profit. I expect the high end to drive down prices across the board
True, the original article was about CT as a whole, not Fairfield County which is part of the NYC suburbs. In most of CT, a million dollar house is still considered high end, in Fairfield County, it is just average.
“Madison luxury home listings likewise soared, from 29 in 2004 to 67 in 2005, a 131-percent increase. Twenty-three sold in 2004 and 27 last year, with the average sales price rising 2.4 percent, from $1,633,810 in 2004 to $1,672,400 in 2005.”
I know people who live in Madison and they want out because they don’t like being 25 miles away from the troubled Dominion Millstone Power Station aka Nuclear Reactor. This is the reactor, along with Brookhaven’s that has been blamed for the huge breast cancer rate in the Hamptons, all the way across LI Sound.
wow, now spring is the slow season for RE
breast cancer coiuld be from implants
”Once you get into the $2 million to $3 million range, that’s a marketplace that doesn’t get affected by the economy,” says Doran, managing partner of South Cove Landing, LLC in Essex
Umm, is the thinking that rich people are dumber and don’t look for value. Oh please, the cheapest people I know on earth are also the rivhest.
Simmsays…
http://www.AmericanInventorSpot.com
AmericanInventorSpot.com
I grew up in Madison, and even before the bubble there were people living in GIANT homes they couldn’t afford to furnish.
I will say, one of the agents quoted in the article is a good person, perhaps just as caught up in the frezy as the buyes and not a bad person per se.