Nine months into 2017, mixed momentum for Connecticut real estate
Published 12:00 am, Sunday, October 8, 2017
Amid a stalled real estate market nationally, southwestern Connecticut buyers and sellers head into the final months of the 2017 market with ample uncertainty but reason for optimism after a third quarter that showed pockets of momentum.
Over the first nine months of the year, Fairfield County sales were up 4 percent from a year earlier to just over 6,800 units sold, according to the most recent data posted online by Stamford-based William Pitt Sotheby’s International Realty.
In town and city sub-markets throughout the region, there were surges — Berkshire Hathaway HomeServices New England Properties tracked third-quarter sales up by half from a year ago in both Darien and New Canaan.
The market continues to be impacted by limited inventory of new listings and the prospect of future interest rate hikes. Compared to a year earlier, the average interest rate for a 30-year, fixed-rate mortgage under $425,000 was up slightly the first week in October to 4.12 percent, with the interest rate on larger, “jumbo” loans escalating at a wider margin to 4.09 percent.
Last month, the Federal Reserve signaled it would begin selling bonds it acquired during the recession, a move expected to inch interest rates up gradually over time. And with the Trump administration’s initial proposal for an overhaul of the U.S. tax code, the National Association of Realtors is warning that any such changes could amount to a tax on homeownership by limiting deductions on mortgage interest for the majority of Americans.
Back from the dead
On a year-to-date basis, Berkshire Hathaway tracked a Stamford market that was in front of all others in the region with more than 660 sales through the first three quarters, a 4 percent increase from the year before. And the 2016 market leader Fairfield maintained its vigorous sales totals with about 245 homes sold in the third quarter, the most of any municipality over those three months as tallied by Berkshire Hathaway,
In other major markets, sales in both Bridgeport and Danbury are up 6 percent this year, with Norwalk off 3 percent and Greenwich down 7 percent.
Within Greenwich, however, there is optimism in the luxury segment after an Oneida Road mansion went under contract to be sold for $25 million. If the deal is completed, it would mark the town’s third sale at $20 million or more this year, tying a record, with 11 more estates listed for sale at or above the $20 million threshold.
In a September analysis of the Greenwich market, Berkshire Hathaway HomeServices New England Properties agent Mark Pruner stated the high-end market is “back from the dead” despite fewer homes on the market heading into the fall from a year earlier. In September 2016, Pruner could point to momentum for sales below $3 million, with the luxury segment still stalled.
Inventory versus affordability
Nationally in August, pending home sales retreated for the fifth time in six months and are at their lowest level since January 2016, according to the National Association of Realtors. NAR predicts this year’s sales of existing homes nationally — excluding newly constructed houses — will be down 0.2 percent from 2016, pulled down in part by the damage from Hurricane Harvey in Texas and Hurricane Irma in Florida that affected many listings in the South.
In 2016, existing home sales rose 3.8 percent nationally.
In the Northeast in August, pending home sales were down 4.1 percent from a year ago, the biggest drop of any region in the country. In an interview posted in late September on NAR’s website, the association’s chief economist Lawrence Yun said he expects many of the Texas and Florida home sales that would have occurred between September and December will now occur in 2018, but that other factors dog the market as 2017 nears its close.
“It is not only about hurricanes, but (other) economic … factors,” Yun said. “The other factors are inventory shortage … and affordability challenges.”
Includes prior reporting by Macaela J. Bennett.
Alex.Soule@scni.com; 203-842-2545; @casoulman