There is a feeling among real estate professionals, including Realtors, Attorneys and Mortgage Bankers that the home selling market has come to a stretching halt during these first 2 months of 2019. I really did a deep dive into statistical numbers and spoke with my trusted professionals to try to come to some determination on what is happening.
I used a composite look at 6 towns which included New Fairfield, Danbury, Bethel, New Milford, Brookfield and Newtown. The inventory levels have fallen. In 2017 there were 1517 and 1547 homes and condos for sale in January and February. In 2018 those numbers fell dramatically to 727 and 770 which is about half of what they were the year before. This year the numbers rebounded slightly to 784 and 842 but it was the feeling that the quality of the homes was significantly lower than in previous years.
James Philipakos, from Flagstar Bank, noted that he has written three time the amount of rehab loans (203K Loans) this year compared to this time period last year. The buyer side transactions have been relatively stable over the past 3 years for this time period except for this February. The numbers were 181/169/164 for 2017/2018/2019 in January and 161/143/100 in February. It was a mild but dreary winter so that shouldn’t have played into the low actual sales this past month. Interest rates, although rising slightly throughout 2018, are back to the levels that they were in January and February of that year. March is still looking extremely slow for buyer side transaction.
I think there may be several factors involved in the slow down:
1- Lack of quality inventory available. Mr. Philipakos noted that a home in Danbury came on the market this week and his office wrote 5 pre-qualification letters for that home. That is, just from his office, five buyers fighting over this one home.
2- Buyers may not realize that the interest rates are back down to about the 4 ½% level.
3- The new SALT Cap (State and Local Tax) at $10,000 may be discouraging potential move up buyers.
4- Concern about the slowing economy nationally and the uncertainty about what new taxes will be initiated in CT.
5- Concern from Sellers that when they sell their homes, they may not be able to secure their next home because of the lack of quality inventory.
The moral of the story here is, if you have a quality home and it is priced correctly you should have multiple offers.