Home sales in Fairfield County on the upswing
Fairfield County: An economy on the upswing and pleasing interest rates drive single-family house sales
Published 1:36 pm, Thursday, August 1, 2013
Mix an improving economy into a pot full of attractive interest rates, and you have concocted a recipe for increased home sales.
An increasing number of people across Connecticut treated themselves to some home-buyers stew during the first half of the year as single-family home sales rose 10.5 percent, and all eight counties reported higher sales rates than last year in the same period, according to Prudential Connecticut Realty's market report.
Of the 23 municipalities in Fairfield County, sales declined only in Darien, slipping to 123 from 143.
However, the median sale price in Darien increased to $1.38 million in the first half of this year from $1.17 million in the year-ago period.
Noting that the number of sales in the first half were just 20 less than in the previous year, Liz Bacon, office leader of Prudential's Darien and Rowayton section of Norwalk offices, questioned the importance of the figure.
"I'm not sure how meaningful that 14 percent change is because we aren't talking about a big number," said Bacon, who has been selling real estate for a decade. "Our inventory is so tight. We just don't have enough to sell."
But she said Darien is in a "sweet spot," touting its positive aspects as a lure for prospective homeowners, citing its top-tier school system, beachfront location and proximity to New York City.
Supporting her contention, Bacon said she saw multiple bidding for appropriately priced homes starting in early spring, and she continues to see it.
"One of the unique aspects of Darien is that we're physically small -- only 13 square miles -- and we're built out," she said. "There are no open lots out there."
"I think it's people seeing that interest rates have played out at their lowest levels, and it's time to act. It may act as a motivator for folks," Beaty said, adding a 30-year fixed mortgage is now in the high 3- to low 4-percent interest range. "I'd also say there is more confidence in the real estate market and economy."
"Mortgage rates have gone up 1 percent since May. We continue to see pretty strong application levels, but refinance activity has fallen off quite a bit," said Pat McRedmond, vice president, residential, at Ridgefield-based Fairfield County Bank. "People are thinking that rates are going up, so it's time to act. Thirty-year, fixed-rate mortgages are now at 4.25 to 4.50 percent with zero points based on the down payment, credit score and equity. Still, historically, rates are fantastic."
Closed sales, new deposits and a continued decline in home inventory are good indicators of an improving market, Beaty said.
Prices in Connecticut are increasing, with median single-family home values rising 2.7 percent to $249,000. Condominiums rose 5.1 percent to a median price of $162,000.
Median sale prices for the 23 communities in Fairfield County for the first half, as determined by Prudential, were nearly evenly divided between those that declined and increased. Twelve declined, 10 rose and one -- Wilton remained the same at $775,000.
The highest first-half median sale price in Fairfield County was in Greenwich at $1.59 million -- up from $1.56 million in the first half of 2012. The lowest was in Bridgeport -- $125,000 in the first half and down from $130,000 in the same period last year.
Northern Fairfield County experienced an upswing in home sales in the first half, though median sales prices declined slightly in many communities, according to the Prudential report.
"It's a function of supply and demand," said Morey, who focuses on the Danbury area from his Newtown office.
The area has worked its way through much of the short-sale and foreclosure process, he said, slowly returning to a more normal real estate market.
"Activity has picked up. We're seeing multiple offer situations. The fact that mortgage rates are going up is indicative of the strength of the market, but you want to make sure that rates don't warm up too fast," said Morey, a real estate professional since 1985. "Hearing that rates went up to 5 percent is a lot better than hearing that rates went down to 18 percent, like in 1979-1980."
The more attractive mortgage rates and the increased numbers of people interested in buying a home has heartened Morey, who said he still enjoys helping buyers reach their goal.
"It's a generation-changing event," he said.
"Customer interest has increased in all price segments," he said, adding that while nationally, the number of first-time home buyers are down from their peak in 2007, Fairfield enjoyed a strong interest in first-time home buyer traffic in the first two quarters of this year. "Properties that are well-priced and that are in move-in condition with today's amenities are experiencing very strong interest with the shortest market time."
The resurgence should continue through 2013, Beaty said, noting the strong first half was bolstered by 789 new deposits for condominiums in the second quarter in Fairfield County -- a 38.4 percent increase over the second quarter of 2012.
Rentals not as strong
"I don't see anything going backwards, except the rental market. The rental market is nowhere near as strong as it was. People are getting back in the market to purchase," Beaty said, adding that Stamford is bucking the trend, and apartment rentals there will hold their place for the next year or two. "Median prices for rental property (in Connecticut) remained stable at $1,450 per month. Furthermore, with the purchase market improving, rental days on the market is projected to remain flat."
A dramatic improvement in the state's housing market depends on an improved economy, he said.
"In certain economic categories, Connecticut has significant competition in attracting and retaining businesses," Beaty said. "When compared to our main economic growth rates, our real estate market may end up being one of our best growth indicators moving forward."