‘The Buyers Are Online, Biding Their Time’
An update on the Connecticut housing market. “Wallingford: The cost of a home remains high in Connecticut, but the housing market is slowing down a bit. Houses are sitting unsold longer.”
“It’s buyers like Gary Helbling who realtors say contribute to a soft real estate market. He’s biding his time. ‘We’ve been doing a search for quite some time,’ says Gary. ‘Now we’re finding a lot more homes out on the marketplace that’s meeting what we want to really look at.’”
“Ruth Ratner has been trying to sell this financial analyst a home for almost two years. She says buyers are cautious and do their homework. ‘The buyers are online, it doesn’t even matter what age group. And they will find what they want to find.’ Ratner says that’s one reason for sale signs sit in front of homes a lot longer these days.”
“A million dollar home in Branford was on the market for a year before it recently went under contract, and a four bedroom Colonial in Wallingford is priced at $599,000. That’s much less than the original asking price of $800,000 a year ago.”
“‘The last couple of years you would see the prices just going up, up, up and up. And now it’s just not there. It’s softer. It’s stable,’ says Ratner. ‘The prices are a little more reactive to knowing the buyers aren’t going to be buying right away,’ she said.”
“And that works for buyers like Helbling, who’s engaged to be married. ‘We’re looking for homes that are starting to come down in price a bit. Which we’re starting to find a little bit now, but the menu that’s out there is absolutely amazing.’”
I just read an article in the NY Times about buyers’ brokers on Long Island. The article referenced a publication for Long Island homebuyers called Gillan Guide, so I googled it and found their site. It seems these folks are on the side of the homebuyer, as opposed to the home seller. It’s an interesting site.
The following is what they say about a bubble - not exactly your typical brokerspeak:
Bubble, Or No Bubble? That Is The Question
While there is ample evidence that prices are near or at a peak, home prices have proven to be remarkably stable over the last 40 years and in our region on Long Island prices only declined about 10% during a perfect storm of savings & loans crises, rising interest rates, and a tumbling stock market which led to significant job and income losses.
> Neighborhood Rankings
Schools, Crime, Shopping,
Commuting, etc…
> Review Neighborhoods
> Best Schools
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> Best for Families/Singles
> Best for Families/Singles
The quick and to-the-point story on home prices is that we are likely at a peak and we will almost certainly not see appreciation over the next five years as high as we did in the last five years. Home buyers are spending a high percentage of their income on homes and if interest rates rise dramatically, we will likely see a decline in prices.
While the long term history of home prices has been and should continue to be great, we would not bet on 10% plus appreciation over the next 3-5 years.
For a more in depth analysis, CLICK HERE to get emailed our full article on the subject.
For a very in depth discussion of the subject, CLICK HERE.
http://www.gillanguide.com/Step%201%20-%20Where%20Will%20Home%20Prices%20Go.htm
If a buyers broker was really working in the buyers interest, they’d recommend that the buyer wait a couple years. However, even the buyers brokers need transactions to make money, so you won’t hear that advice.
I live on Long Island. Sold last April, renting and apartment since then. Affordibility is extremely low. Many young people are leaving for better quality of life elsewhere. Already high property taxes have been going up about 10% per year, add that to higher interest rates, and youv’e got a lot of pressure on home values. I think a 20% decline over the next two years is reasonable. Since Long Island was already built out, there wasn’t the massive overbuilding there was in areas like AZ,NV,FL,CA. Still there was a good amount of building by small builders. Mainly because mortgage costs ,property taxes,and utilities are going through the roof, new buyers are only going to be able to afford to pay much less for the property, in order to compensate for other costs. That’s where I see most of the pressure coming from around here. There’s also a lot of suicide loans here, that will be defaulting in the future.
Where are the young people moving to for better quality of life?
By this, do you simply mean more affordable homes factoring in both home prices and what the jobs pay elsewhere?
Chester, It’s become clear to me that many are headed to Albany and north on a mission to destroy anything good and to deliver what is bad. How these people make a living up here in VT and in upper NY is beyond me. What I do know is this….. We really dislike these people coming. They are unrefined pigs.
Didn’t Quebec annex your asses yet?
The southeast, from the Carolina’s down to Florida, seems to be the most popular. Although Florida has lost it’s luster. I know several young couples, in their twenties through early thirties that made the move south. They all had the same reason, housing affordibility. In the Carolina’s they can get a nice house for around $200,000, certainly less than $300,000. On Long island it’s $350,000 - 450,000 for a fixer upper. It’s daunting for them here.
They’re all going to Nevada and Arizona! The chart below indexes each state’s % growth from 1990 to 2000 Census to the national growth figure during that period of +13%. So Nevad’s 504 means Nevada has grown 5 times as fast as the total U.S. Or New York’s 42 index means NY has grown 58% slower than the U.S. average. (100%-42% = 58%)
Of course this doesn’t say how many people are migrating from each state to each of the other states. I’m not sure that exists, but I may take a look for it.
Here in Maine, we are grew 59% slower than the nation. We’re the oldest state so we probably have a very low birth rate. And we don’t have many high paying jobs, so typically about 25% of our young people simply leave. At the same time, sizable amounts of NYC area, NJ, Ct., Mass and California people are moving here. They generally have a lot of money, so they are not all that dependent on huge jobs. Many are the boomer retirees whose bones can take the winter cold or whose wallets can buy them trailers in sunny Florida. Still others are small business people who can work remotely using the Internet. Jet Blue comes to town next month, so we are battening down the hatches for even more semi-telecommuters and long weekenders. Meanwhile, native Portlanders are fleeing our rising prices by heading north.
The folks in Labrador & Newfoundland are thus served notice.
BTW, the colimn on the right is density, i.e., 2000 population divided by land area in square miles.
Index to Nat’l Pop/Sw Mile
504 18 Nevada
304 45 Arizona
232 41 Colorado
225 27 Utah
217 16 Idaho
200 141 Georgia
179 296 Florida
173 80 Texas
163 165 North Carolina
161 89 Washington
155 36 Oregon
153 15 New Mexico
134 401 Delaware
127 138 Tennessee
115 133 South Carolina
110 179 Virginia
106 1 Alaska
105 217 California
104 51 Arkansas
98 6 Montana
95 62 Minnesota
87 138 New Hampshire
82 542 Maryland
80 61 Mississippi
76 88 Alabama
74 50 Oklahoma
74 170 Indiana
74 102 Kentucky
73 99 Wisconsin
71 81 Missouri
71 189 Hawaii
67 5 Wyoming
67 1,134 New Jersey
66 223 Illinois
65 33 Kansas
64 10 South Dakota
64 22 Nebraska
62 66 Vermont
53 175 Michigan
45 103 Louisiana
42 810 Massachusetts
42 402 New York
41 52 Iowa
35 277 Ohio
34 1,003 Rhode Island
29 41 Maine
27 703 Connecticut
26 274 Pennsylvania
6 75 West Virginia
4 9 North Dakota
100 80 Grand Total
Ooops. I misread my own state’s index. Maine’s index to national growth is only 29 - meaning we’re 71% below the national percent increase in population from 1990-2000.
But we do have a herd of 30,000 moose and about 22,000 blacks bears!
“We’re looking for homes that are starting to come down in price a bit. Which we’re starting to find a little bit now, but the menu that’s out there is absolutely amazing.”
The menu is definitely getting bigger but it’s not yet at the Wendy’s Super Value Menu stage.
BTW, whoever listed a 4 BR Colonial in Wallingford for $800,000 was living in some alternate reality or else had a terminal case of Brass Elephantiasis.
Agreed- $800,000 is way out of line for this town.I have lived here for almost 20 years.
The for- sale signs are sprouting like tulips here in Wallingford.
“For Sale” signs for everyone!!
Anybody out there have some experience in commercial RE specifically in the South Bay area of LA? The amount of “available” signs in front of buildings is unbeleivable yet very few “for sale” signs… Over the years we have tried to acquire a 10-20,000 sqft building but it seems like every building that size in the Gardena area is owned by some friggin RE group. I wonder how long these “available” signs will have to be up before someone decides to sell???
good look. every 1031 joe and his brother have picked the west la commercial market clean. it’s hotter than the housing market ever was.
West L.A. Commercial is always hot no matter the market. But if your willing to step up there are deals to be had. But most of that stuff is not for the faint of heart. Recently looked at I think it was 2000 sgft of Commercial Retail 5 parking spots. They wanted 2 million for it. It’s out there but if your not an established player owners won’t talk to you. If your interested you need to find an established commercial broker, show him the money, and hope he has enough contacts to find you something. If residential realtors make you whine. Your going to have a really rough time with the commercial boys.
If your looking for “for sale” signs. Your not going to find very many of them typically unless the owner is desperate. Your going to need an experienced commercial broker to find what you need. There’s a lot of stuff out there for sale especially if 3-5% cap doesn’t bother you. But it’s not in the MLS. Real Commercial Brokers very rarely use the MLS. Gardena shouldn’t be that hard it’s tons of stuff over there. And they have pretty good velocity.
Oh and I forgot there’s a very high demand for space in the South Bay region or Los Angeles in general. I was going to post the article from the Times but I can’t find it now. A lot of those available signs are for really weird space. Like maybe 500 sgft overage between to 10,000 sqft spaces or filler I should say.
OT:
OC Register article on Strategic Hotel Capital liquidating $400M in commercial RE in OC.
http://www.ocregister.com/ocregister/money/yourcounty/article_1105131.php
Strategic, which bought the Ritz in 1997, plans to sell it as part of an ongoing liquidation of its holdings. Laurence Geller, one of the principals of Strategic, is more focused on the publicly traded real estate investment trust he leads, similarly named Strategic Hotel & Resorts Inc.
Reay said the sale of the Ritz-Carlton, rated five diamonds by the AAA, would mark the first top-level hotel to change hands in the county since 2002. Orange County has lagged other California markets in hotel sales, he said.
Scott Evans, director of sales and marketing for the Ritz, said room occupancy in the first quarter was as high as it’s ever been - in the high 70 percent range.
OT: Here’s a story about an arrest of a Florida homebuilder for taking buyer’s money and never building the home. The name of the guys company: American Dream Custom Homes. Priceless.
http://tinyurl.com/pvcxo
“‘The buyers are online, it doesn’t even matter what age group. And they will find what they want to find.’”
So tell me again why we need realtors, or why they think they’re entitled to a 6% cut?
That’s a topic worth discussing. Are traditional realtors doomed? Will the housing bubble, on-line access, alternate forms of selling be the perfect storm that dooms the 6% comission?
Imagine what online searches will be like when Zillow, Google or CraigsList can consolidate into one search every detail of every house for sale for any region. Sellers will no longer be able to fish for fools. Only the best priced houses in each category will be considered by buyers. Maybe there will even be wanted adds by buyers. And sellers will line up to sell to them at the cheapest price.
Great Idea!!!!!
I’d also like to see the newspapers in each market start faithfully reporting some valuable metrics that would lend better insight into local market conditions such as price per square foot, inventory and Days on Market, all year over year.
You know, they may not do it because they wouldn’t want to lose their real estate brokerage advertising. But realistically, the brokerages will continue to advertise there as it’s one of the places they have to be - along with the Web.
Great as these tools are, I suspect there is a sufficient quantity of lazy people (you might call them “fools”) who would rather let someone else do all the work than do the research for themselves. Think about all the people out there who didn’t bother to read/understand their “exotic” loan docs before signing. And regardless of what research tools are out there, there will be plenty of people who make house purchase decisions for emotional rather than logical reasons.
On the other hand, I think this will increase the opportunities for those of us who are smart enough and diligent enough to do our homework to negotiate better prices and lower realtor commissions. The fools will just end up paying more to compensate.
Oh man. That’s a stretch. That would rely on eliminating greed out of the enire process. Not going to happen
If the brokerages keep on advertising maybe this site should drop leaflets with this web site address on it so all prospective buyers can be informed by their peers and those informed by facts not gibberish from the ill informed RE agents who want a sale at any cost. AND I say cost because if the buyer makes a bad decission it will really COST them in the future.
Housing has been on a run-away-freight for the last 4 yrs. However, the coal for the tender has been Word-of-Mouth; everyone at work knows someone who has made a ton of money in town by buying an extra house or two. Until Word-of-Mouth starts conversations around the water cooler about how Joe, Mary, Harry, etc, can’t sell their house or are in foreclosure or BK court, we are not going to see the turnaround that we are all looking for.
I agree with you. There has to be some fear in the average joe. Just about Everybody has made money in real estate here of late. In the stock market bubble a monkey could be a stock picker and have some success. It has become way to easy to make money from real estate. Investing is supposed to have a little challenge to it.
I agree with you too. And the water cooler conversations which will be most likely to prick the bubble will be local. Long after certain markets have tanked the NAR will try to candycoat things by steering the conversation to the less severe national numbers.
There will be many slow or even rapid leaks in the bubble in many markets that will bring prices down over a period of a few years.
But nationally, there will be less of a housing bubble and more of Pricing Osmosis - where bubbles in one market leak due to fleeing equity bandits and prices in destination markets rise as a direct result.
Word-of-Mouth has already started how selling houses has become difficult here in the Twin Cities - I overheard some conversation in the cafeteria line. No forclosures or bankcruptcies yet though, and I am not particularly eager to hear that either.
Lingus-
Don’t know about VT., but I do know that these southern refugees are welcomed with open arms in Upstate NY and inject a lot of good energy into the culture up there.
How will they support themselves? That’s a good question, but I guess they’ll figure that out for themselves.
Well, I can tell you that the fat Tony’s and hairy Maries aren’t welcome in upstate. My wifes family has been in Saranac for generations and their are alot of them and they all want the NYC/NJ/CT slobs out. I don’t know what anectdotal evidence you’re referring to but is sure doesn’t apply in upstate.
My wifes family has been in Saranac for generations and their are alot of them and they all want the NYC/NJ/CT slobs out.
We have been saying this for years in Florida about all New York/Jersey/Ct…All of them!!
They overun and ruin the culture wherever they land in the south.
I dont know about depending on “word of mouth” to speed up the collapse. Everybody wants to brag when they win big at the gambling tables, but they usually dont bring the subject up if they are losers. Why let everybody know how stupid you were? Many people will still tell acquaintances they are doing fine right up until the wrecker backs up to their Hummer in the driveway in the middle of the night.
A great visual you painted. Perhaps there should be a Schadenfreude Reality TV show that covers things just like that - “America’s Most Mortgaged”.