The Northeast leads the country in recent home price growth. Prices are still high in our local market and inventory is slowly increasing. The average sale prices for homes in Fairfield increased 12.9% since this time last year, and in Easton increased 3.1% from this time last year. Days on Market in Fairfield have decreased 11.1% since last year, and 8.3% in Easton since last year. It’s an extremely active and competitive buyer environment. Open House and showing traffic is robust, and many homes are receiving multiple offers (many over asking) and are under contract within days. The 7% interest rates don’t seem to be affecting our local market activity!
Buyers, let us help you see the opportunities in this market instead of the obstacles. We can help you prepare to compete. Make sure your mortgage preapproval is current and consider putting it through underwriting to be more competitive. Work with a local agent and mortgage lender who understands the market, and don’t give up on finding the home you’ve been dreaming of. Stay in the game and let us know how we can help. We have strategies for buyers!
It’s still a great time to sell and get top dollar for your home. Sellers, even if you’re just beginning to think about selling, start planning how to get your home looking its best. Presentation matters! We are happy to speak with you about ways to present your home in its best possible light and price it to get the most eyes on your property. Consider Coldwell Banker’s RealVitalize program to prep your home for the market with no upfront cost. I’m here to help!
Prices are still high in our local market and inventory is starting to pick up. Easton’s inventory is up 33% with 16 homes listed for sale on May 1st as compared to 12 in April. Until recently, there were NO homes on the market in Easton for under $1MM, and that is starting to change with 7 of the 16 homes listed being under $1MM. Fairfield’s inventory has increased 10% with 77 homes for sale, as compared to 70 last month. It’s an extremely competitive buyer environment. Many homes are receiving multiple offers and are under contract within days.
Buyer fatigue is a living breathing thing right now. Buyers need to be ready in order to compete, so stay on top of things. Make sure your mortgage preapproval is current and consider putting it through underwriting to be more competitive. Make sure you are working with a local agent and mortgage lender who understands the market, and don’t give up on finding the home you’ve been dreaming of. Stay in the game and let us know how we can help. We have strategies for buyers!
It’s still a great time to sell and get top dollar for your home. Sellers, even if you’re just beginning to think about selling, start planning how to get your home looking its best. Presentation matters! We are happy to speak with you about ways to present your home in its best possible light and price it to get the most eyes on your property. Check out the RealVitalize link below for information on how you can prep your home for the market with no upfront cost. I’m here to help!
As always, reach out if you are thinking of buying or selling. I would love to hear about your real estate goals and discuss creative buying and selling strategies or answer any questions you may have. And I wish you a very happy holiday!
The question I hear the most from friends and people I meet is “When are prices and interest rates coming down?” I wish I could tell you when interest rates are coming down, but nobody can say for sure. Many economists are predicting lower mortgage rates later this year and I’m hoping that’s going to happen.
Prices are still high due mostly to lack of inventory. Right now there are only 12 homes for sale in Easton, compared with pre-pandemic figures of 69 in March 2020 and 77 in March 2019. Fairfield has 70 homes for sale at the time of this writing, compared to 518 in March 2020, and 439 in March 2019. So why isn’t there inventory? Many homeowners refinanced their homes in the last three years with interest rates in the 3-4% range and aren’t motivated to purchase again for a rate between 6 and 7%, and a much higher monthly payment. Because many are waiting on the market to change, homes aren’t turning over and inventory has stalled. Lack of inventory combined with a high demand for housing results in escalating prices. We don’t see this changing anytime soon – economic change takes time – but that doesn’t mean you should give up on finding the home you’ve been dreaming of. Stay in the game and let me know how I can help. Our team has strategies for buyers!
If you’re a seller thinking of listing your house, the time is now! Inventory is still low, so this is a great time to list your home, as we have an abundance of motivated buyers and not much competition from other sellers. If homes are priced correctly, they often receive multiple offers over asking. I would love to give you an opinion on your home, so please contact me if you are considering selling.
Looking to spruce up your garden in the Connecticut area? We’ve got plenty of suggestions that will make the perfect addition to any gardener’s flower beds, with many of the best flowers we list below growing natively right here in our area.
1. Trumpet Honeysuckle
This native plant makes a great alternative to the invasive species of Japanese honeysuckle that is prevalent in our area and beyond. Twining vines that spread quickly make this the perfect plant to add a bit of greenery anywhere, with beautiful orange-red tubular flowers that are known for attracting hummingbirds.
2. Blue-Stemmed Goldenrod
Another beautiful flower that is native to our area, blue-stemmed goldenrod sports beautiful flowers and is a great pollinator. There are over 25 native varieties of this flower available, allowing for some variety that will make this plant fit in just about anywhere. And don’t let goldenrod’s reputation for being a cause of hay fever put you off, as that is simply a myth.
3. Allium
The beautiful, colorful bulbs that are characteristic of the allium plant make this another popular choice among gardeners in our area. Plant this bulb in the spring and you’ll see the tall stalks and globes of flowers form that summer, attracting plenty of hummingbirds and butterflies to your garden for you to admire.
4. Petunia
These annual flowers thrive in the heat, so you’ll notice more plentiful blossoming during especially warm summers. They are low maintenance and can grow just about anywhere regardless of light exposure, making this a versatile plant that will fit in anywhere in your garden.
5. Dahlia
A unique shape and striking multicolored petals make dahlias another popular option among gardeners in our state. They grow bests in a container and require little water to thrive, making this a great low-maintenance plant that won’t require too much work on your part.
6. Eastern Red Columbine
Blooming in the spring with vibrant colors and distinctive “nodding’ petals” eastern red columbine makes a wonderful addition to any garden. You’ll love the eye-catching appearance of this flower almost as much as the birds and butterflies who will frequent your garden will, with finches, in particular, being one type of bird that is attracted to this flower.
7. New England Aster
One of our region’s most iconic flowers, New England Aster blooms late in the season but is well worth the wait. They’ll bring much-needed color to your garden when other plants begin to fade for the season, showing off the vibrant purple petals that make this flower so popular among gardeners.
8. Pearly Everlasting
Relatives of the sunflower, this perennial flower will keep coming back to treat you to the beautiful sights of its blossoms. The white and yellow coloration will add a nice touch in any part of your garden, and this drought-resistant plant needs minimal water to flourish.
9. Swamp Milkweed
So many lovely plants are native to our local area, with swamp milkweed being another name on that long list. The large, showy blossoms are instantly recognizable and will look great in any garden, reaching heights of two to five feet in height and showing off violet and white flowers along with purplish-green leaves.
10. Common Witch Hazel
Our state is known by some gardeners as the witch hazel capital of the world, making this another leading choice for anybody looking for a new addition to their garden. The flowers are recognizable for their distinctive yellow color and unique shape, and some medicinal properties can also be derived from the plant.
11. Marigold
This iconic flower features a beautiful color that will liven up your garden, with blooms that can last for between six and eight months. They’ll attract plenty of pollinators to benefit your garden even more and also thrive in either the heat or the cold to give you a durable plant that lasts through the seasons.
12. Lily
These beautiful flowers bloom perennially, giving you something to look forward to every time the summer comes around. Their vibrant colors bloom throughout the summer so that you can enjoy this flower’s attractive looks year-round. They are one of the rare flowers that grow completely vertically, making them a good flower to fill in any small spaces in your garden.
13. Coneflower
Named for the distinctive shape of its blossoms, coneflower is another terrific choice that can be planted anywhere in your garden. There are 24 different varieties of this flower to let you find the aesthetic that you like the best, coming in varied colors like yellow, pink, purple, or white.
14. Tulip
Out of all the many flowers that blossom in the spring, tulips may just be the most attractive, as seen by their popularity among so many gardeners. Coming in shades of white, black, purple, orange, pink, yellow, and a variety of others, this flower can thrive in any soil and with any amount of sunlight.
15. Black Eyed Susan
Deriving their name from the black center that sits amid the beautiful golden petals of this flower, black-eyed susan thrives in low-water conditions to give you a minimal need for maintenance and upkeep. They’re perfect for any part of your garden because of their ability to thrive in any type of soil.
16. Daffodil
Looking for an easy addition to your garden? Daffodils are low-maintenance plants that require very minimal care, and they thrive in both hot and cold weather. They can survive through periods of inclement weather, attacks by garden pests, as well as different plant diseases and fungi, making them one of the most durable flowers on our list.
17. Turtlehead
With beautiful blooms, usually in white or pink colors, that really do resemble a tortoise’s head, the turtlehead is one of the most distinctive flowers that you can add to your garden. Since they naturally thrive in marshy land, they need a bit more water than your average plant, requiring moist to wet soil in order to properly grow.
18. Pale-Leaved Sunflower
Also known as the woodland sunflower, this stunning golden plant is sure to draw plenty of attention when it blossoms in your garden. They grow up to three feet high, showing off their signature bright yellow blooms that come in between July and October.
19. Cardinal Flower
Another native plant that will look right at home in your garden, cardinal flower gets its name from the red color of its blossoms that resemble the feathers of a cardinal bird. The long, tubular flowers are known to attract feeding hummingbirds, letting you catch a glimpse of these amazing creatures in your garden.
20. Blue Vervain
Last on our list but far from least, blue vervain sports beautiful blossoms that range in color from blue to violet. Also known as birdsfoot violet, this flower is known to be very beneficial to birds and butterflies, as well as adding its lovely appearance to your garden.
Want to add some color to your yard? We can put you in touch with landscapers that will help you with your gardening or any other outdoor project you want to get done. Start your search on Landscaper Locator today!
Design pros are turning to a chic alternative to the roof-puncturing skylight: the interior window. Here’s what you need to know.
ROOM WITH A VIEW OF A ROOM In her 1902 home in Grand Rapids, Mich., interior designer Jean Stoffer repurposed vintage storm windows.STOFFER PHOTOGRAPHY INTERIORS
THE OPEN floor plan lost considerable appeal once the din of WFH video calls began echoing through it. As Americans have grown more interested in walls, but no less interested in airiness, a new-old solution has emerged: interior windows. These apertures let light jump from room to room while creating a soothing sense of separation.
When renovating her historic 1902 home in Grand Rapids, Mich., interior designer Jean Stoffer found 100-year-old storm windows there. As part of a new wall pierced by a wide doorway, they proved a handy way to introduce a distinct but not too darkening division between her grand living room and kitchen-seating area. She then painted the windows’ wood sashes black, in keeping with the home’s exterior windows. “The style of an interior window should be the same as or complementary to the home’s exterior windows,” Ms. Stoffer advised.
Other designers stress the importance of visually quiet portals. Max Worrell, an architect in Brooklyn, recommends windows with slight frames that “go away as much as possible.” In a South Carolina home, interior designer Barbara Westbrook also wanted an interior window to disappear. Atlanta architecture firm Historical Concepts installed nearly floor-to-ceiling glazing between a living room and a reading room (which has windows overlooking the outdoors), making the reading room “look like a porch,” she said. She matched the trim work around the interior windows to the color of the reading room’s walls so that “your eye does not stop at the window but looks through the window.”
Vintage windows have advantages. Designers in search of handsome frames have more leeway when they needn’t factor in heat retention and element resistance. Retrouvius, a salvage company and design studio in London, often repurposes exterior windows no longer up to code, to add “an instant historical reference” in older buildings, said co-founder Adam Hills.
Atlanta architecture firm Historical Concepts installed windows between a living room and reading room, making the reading room “look like a porch,” said Barbara Westbrook, the interior designer on the project. PHOTO: ERIC PIASECKI/OTTO
Wedging even a small transom window above a door frame can brighten darker spaces like laundry and powder rooms. Assuming the doorway is a standard 80 inches tall, you need a ceiling height of at least 9.5 feet, said Stephanie Sabbe of Sabbe Interior Design, in Nashville, Tenn. Any lower, and your transom will look squished.
Costs for an interior window vary greatly. On one end of the spectrum, explained Ms. Stoffer, is a simple wooden-sash window with minimal millwork set into a non-load-bearing partition wall that’s, say, 6 feet wide in a room with an 8-foot ceiling. A skilled carpenter can turn such a project around for roughly $1,500. Ditto for a standard transom.
Meanwhile, if you’re planning to install a custom steel window with complicated moldings into a bigger existing wall with mechanicals in it, you’ll need an engineer and other tradespeople. Cost: in the tens of thousands of dollars.
If all this glass seems like an overshare waiting to happen, know that light and modesty can coexist. To brighten a windowless bathroom in a Brooklyn home, Mr. Worrell cut an aperture in the wall between bed and bath, then filled it with a translucent but not transparent glass. “In the bath, you get daylight from the bedroom’s windows, while in the bedroom, you see only a shadowy figure,” he explained. The result is less edgy than it sounds, he said. “There’s a bit of play with voyeurism, but it’s discreet.”
When searching for a mortgage you have two options when it comes to getting a professional to help secure funding: a loan officer or a mortgage broker. Roles of loan officers and mortgage brokers are similar in that they will both gather information about your financial picture and help you fill out a mortgage application and get it processed. But they are different in other ways.
A mortgage broker is an independent loan officer and works on a borrower’s behalf to find the lowest available mortgage rates and best loan programs through multiple lenders based on your income and credit profile. By shopping the application around to different lenders they can find the best rates and terms for borrowers. They collect your relevant documents and forward to the mortgage lender for approval and underwriting. However, there is a fee for their services that are paid by the buyer, the lender, or both. These fees may not be transparent to borrowers because the lender may just charge a higher interest rate, or the fee will be paid at closing. Not all banks work with mortgage brokers which means you could miss out on some funding options. Mortgage brokers don’t lend money, but help connect you to a lender that will, and mortgage brokers do not service the loan.
A loan officer works for a bank, credit union, or mortgage lender and offers programs and mortgage rates from their financial institution only. They must be licensed and have a comprehensive knowledge of banking industry rules and regulations, and generally receive a salary plus commission for the loans they originate. The approval and underwriting process is completed “in house” as opposed to a third party.
There are generally no extra fees when working with a bank directly. Sometimes lenders offer discounts on intertest rates or closing costs because they don’t have to pay a third party. Also, if you are getting a mortgage through a bank that you already have a relationship with, you may qualify for relationship pricing on the loan. Loan officers and mortgage banks are direct lenders and generally service the loans they originate.
Another thing to consider when deciding on a mortgage lender is partnering with a LO or MB who is local versus an online lender. Local lenders know their markets and will be able to counsel you on different lending options based on what is happening in that particular market. Local lenders are generally more responsive in answering your questions and getting your mortgage pre-approval ready, and their reputation as a local trusted lender will instill confidence to the selling agent of the property you are bidding on. We partner with Guaranteed Rate Affinity – local experts who have their fingers on the pulse of our market. Contact me for more information or go toWww.Grarate.Com/timmartinto connect with Tim Martin of Guaranteed Rate. He is happy to speak with prospective home buyers about financing options and understands the market.
Whatever you decide, it’s important to use a responsive lender or broker that is available to answer your questions, give sound counsel on how much home you can afford, and explain the financing options available to you. Regardless of your preferred partner, there are benefits to them being local and knowledgeable in the market you are looking to purchase. It’s in your best interest to do some research before choosing how you will finance your new home. It’s most likely going to be the largest investment you’ll make in your lifetime.
I focus on real estate brokerage and the New York City market.
The real estate agent’s job, perhaps more than any other, is to really HEAR the buyers and show them alternatives that allow their perhaps inchoate desires to find expression in the choice of the best home they didn’t even know they wanted.
Do buyers tell their agents the truth about what they want? The phrase “Buyers are liars” was one of the first I learned when I entered the real estate brokerage business forty years ago, and it has stuck with me for a variety of reasons. First and foremost, it evinces an intense lack of respect for the buyer who is in the process of purchasing a home. But second, and perhaps ultimately more important, the phrase demonstrates a complete lack of comprehension of the process through which buyers pass to arrive at a final purchasing decision.
Most home buyers, including both first-timers and those who have purchased before, enter the search process with a series of well-defined parameters. For a few of those buyers, the parameters will remain constant throughout the search. But for most, the hierarchy of needs that governs the final decision mutates over time as more properties are seen, and more vistas open up. How does this happen?
In the beginning, most purchasers have a clear sense of how many bedrooms they want, what kind of exposure they want, what kind of building they want, and where that building should be. And for most of them, as time passes and they see more properties, the realization sets in that they probably cannot match up every item on their priority list. This tends to happen regardless of the price range in which they are active. So this requires a next step: a prioritization of priorities.
As buyers come to grips with the fact that the perfect amalgam may not exist, they must make choices. Does space matter more than location? Or is living in a particular spot so important to a buyer that they will sacrifice a few hundred square feet to live in the center of their geographic comfort zone? Does being within walking distance of schools matter more than making sure each family member has a bedroom (and bathroom) of their own? Or can the buyer make their peace with traveling to school every day in an Uber to get that extra space that gives every member of the household more privacy?
And then, of course, there is the view – does it need to be Park or River, or is good light good enough if the other criteria are satisfied? Finally, the question of timing may loom. Can this buyer keep looking for two years to find exactly the right thing, or do they need to be settled before the summer sets in.
None of these questions have the right answers. Each functions on a sliding scale with the others to create the moving target of the features that will lead to a satisfied buyer. And, of course, all of this comes before the issues involved in negotiating the price!
So the answer is no, buyers are not liars. Their decisions evolve as the search process continues, and they refine their own criteria as to what amenities they care about the most. A good real estate agent is, above all, a good and attentive listener. Often the savvy agent can sense, in the interstices of the buyer’s conversation, the real priorities of which they may not even be aware yet. The agent’s job, perhaps more than any other, is to really HEAR the buyers and show them alternatives that allow their perhaps inchoate desires to find expression in the choice of the best home they didn’t even know they wanted.
When it comes to painting your house before you list it, it’s not about you – it’s about potential buyers.
Red, orange, yellow, green, blue, purple, brown, black. The primary colors we learned in school are beautiful in a box of crayons. When you’re putting your home on the market: not so much.
You may love colonial red living and dining rooms, watery blue bathrooms, and bright yellow kitchens. The problem is that buyers might not share your taste. Normally, you don’t really care if other people like your taste in paint colors. But you do care when these colors could cause your house to languish on the market.
What’s the best color to paint your house before putting on the market?
Neutral wins the day, say experts.
We love this rosy pink shade from Benjamin Moore, especially in a bathroom. But according to real estate experts, poppy hues aren’t always a hit with homebuyers.
(Image credit: Benjamin Moore)
According to Candice Williams, a real estate agent at Re/Max Space Center in League City, TX, a neutral color, such as beige, light grey, or a warm white is your best choice. “Neutral colors take the attention away from the walls and redirect it to the openness and flow of a home,” she says.
On the other hand, bold colors distract buyers. They can walk and chew gum, but according to Williams, they can’t digest your bold colors while also imagining their own belongings in your home. “And this changes the discussion to whether they want to deal with the hassle of painting to match their personal style.”
Karen Kostiw, an agent at Coldwell Banker/Warburg Realty in New York, NY agrees. “A neutral paint palette should be used for a prospective buyer to envision their lifestyle,” she says. “Warm whites, beiges and grays are the go-tos and paints now come in many beautiful hues to choose from.”
The most neutral of neutrals: white.
When pressed to choose just one color, white is the overwhelming color choice among our experts – and many of them also prefer specific shades of white paint.
“The best color to paint your home is Decorators White by Benjamin Moore,” says Kathryn Landow, also an agent at Warburg Realty. “A white room creates an open feeling and can make spaces appear larger, and this clean coat won’t be too stark of a white and will add a modern clean feel.”
Her colleague, agent George Case of Warburg Realty, admits that he’s not a fan of the “just paint it all white” school of staging. “However, I love Farrow and Ball’s Wimborne White, because it’s warm and clean – a tough combo to beat.”
Farrow & Ball’s Wimborne White on the doors
(Image credit: Farrow & Ball)
We also asked a home stager, Justin Riordan, who is an interior designer, architect and founder of the Portland, Seattle and LA home staging company Spade and Archer Design Agency(opens in new tab),” for his recommendations. He agrees that white is the best color to paint your home when you want to sell it.
“We want two qualities in every house we put on the market: It should be filled with light and easy for the buyer to move into,” Riordan says. And white fits the bill perfectly.
“Every color has a number assigned to it, called the Light Reflectance Value or LRV,” he explains.” And the higher the number, Riordan says the more light bounces off that color, as opposed to being absorbed into it. “White has the highest LVR – even higher than a mirror which is very directional in its reflectiveness, but not as efficiently as white.”
He admits that he doesn’t use white in extremely traditional spaces, since it can sometimes be too harsh. “Cream has just enough softness to keep the traditional space easy to read while still being light.”
And the beauty of white/cream is a seamless blending in any background. “We have no idea if the new buyer will have neutral mid-century modern furniture or Louis the 16th furnishings in Rainbow Bright colors,” Riordan says. But it doesn’t matter, because he says the furniture won’t clash with cream or white. “Keep in mind that of all the people in the world who might buy this house, you are not one of them, so design for the ‘unknown buyer.’”
SO WHAT ARE THE BEST COLORS TO PAINT YOUR HOUSE BEFORE YOU SELL IT?
We got Riordan to share his specific color recommendations for walls, ceilings, and cabinets throughout the house. Here’s what he recommends:
Walls: Benjamin Moore, Superwhite PM-1in Flat or Benjamin Moore, Navajo White OC-95 in flat
Trim, cabinets and doors: Benjamin Moore, Superwhite PM-1 in semigloss or flat
Ceilings: Benjamin Moore, Benjamin Moore Superwhite PM-1 in flat
Bathroom walls and ceiling: Benjamin Moore, Superwhite PM-1 in eggshell
Kitchen walls: Benjamin Moore Superwhite PM-1 in Eggshell or Benjamin Moore, Navajo White OC-95 in eggshell
In an unusual pattern, the 12 major housing markets west of Texas, plus Austin, saw home prices fall in January, while the opposite happened in the rest of the country.
Seattle home prices fell 7.5% in January from a year earlier.CHONA KASINGER FOR THE WALL STREET JOURNAL
By Nicole Friedman Wall Street Journal March 27, 2023 10:56 am ET
The United States is a country of two housing markets. In one, home prices are falling from a year ago. In the other, they’re still posting annual gains. That division runs right down the center of the U.S. In all of the 12 major housing markets west of Texas, plus Austin, home prices fell in January on an annual basis, according to mortgage-data firm Black Knight Inc.’s home-price index. In the 37 biggest metro areas east of Colorado, except Austin, home prices rose year-over-year. This pattern of geographical disparity is highly unusual, if not unprecedented, housing analysts say. “We’ve never seen anything quite like this where it’s so stark, west to east,” said Andy Walden, vice president of enterprise research strategy at Black Knight.
Home prices are falling in the West, while prices in the East are increasing.
After more than two years in which the pandemic-driven housing boom and low mortgage rates boosted prices in every corner of the U.S., from big cities to small towns, the country’s housing markets are now diverging, responding increasingly to local factors such as affordability, supply and job growth. Certain housing markets in the West have enjoyed long price run-ups since the 1990s, when the rapid growth of the technology industry fueled a housing market boom. Now, the cities most closely associated with tech have the fastest falling home prices. San Jose, Calif., and San Francisco home prices were down more than 10% from a year earlier in January, and Seattle prices fell 7.5%.
In the Eastern half of the U.S., Florida and other Southern markets are still attracting companies and adding jobs. Orlando home prices were up 9.3%, while Miami prices rose 12%, the top increase among the 50 biggest metro areas. A slew of financial companies moved to Miami in 2021 and 2022, and their employees are still arriving, said Judy Zeder, an agent with the Jills Zeder Group at Coldwell Banker Realty in Miami. “We still have a lot of buyers who are here that we still can’t find homes for,” she said. In places such as Hartford, Conn., and Buffalo, N.Y., more affordable homes and limited housing supply supported annual price gains around 8% in January.
“The uptick in interest rates does not seem to have had any effect on our market,” said Lisa Barall-Matt of Berkshire Hathaway HomeServices New England Properties in West Hartford, Conn. Housing markets in the state lagged behind most of the country for years following the housing crisis. She said the area’s relative affordability compared to Boston and New York is now keeping demand strong.
Alison and Dylan Conway, who are expecting their first child in May, are moving from Maryland to Connecticut to be closer to family. They lost out on three offers in the Hartford area to higher bidders before having their fourth offer accepted for a three-bedroom house in East Hampton, Conn. “We really didn’t think that it was going to be so competitive,” Ms. Conway said. “We went to several open houses in Connecticut, and there were 20 cars packed outside the second it opened. It was wild.” Existing-home sales rose in February, snapping a 12-month streak of declines, the National Association of Realtors said last week. The median existing-home sale price fell 0.2% in February to $363,000, the first year-over-year decline in 11 years.
Many economists expect home prices to fall further on an annual basis this spring or summer, as Western markets continue to slide and some Eastern markets start posting year-over-year declines. Metro areas in the Southeast that experienced big price run ups in recent years such as Nashville, Tenn., or Raleigh, N.C., are especially vulnerable to price declines, analysts say. The housing market is at a pivotal moment heading into the crucial spring selling season. Declining mortgage rates in December and January spurred a pickup in activity, but some of the momentum halted in February as rates started to climb again.
San Francisco’s home prices have dropped more than 10% from a year ago, while Miami’s continue to rise. SHELBY KNOWLES FOR THE WALL STREET JOURNAL, BRYAN CEREIJO FOR THE WALL STREET JOURNAL
The average rate on a 30-year fixed mortgage was 6.42% last week, down for the second straight week but up from 6.09% in early February, according to Freddie Mac. The Federal Reserve approved its ninth consecutive interest-rate increase Wednesday and said it was too soon to tell how recent turmoil in the banking industry could slow the economy. The metro areas posting the biggest price declines tend to fall into two categories: markets where prices skyrocketed in recent years as people moved in from other states, such as Phoenix and Austin, and markets where prices didn’t surge as dramatically during the boom but that were already prohibitively expensive, such as San Francisco and Los Angeles, said Black Knight’s Mr. Walden.
The hard-hit California markets have long been some of the nation’s priciest. Housing costs up and down the West Coast surged in the 2010s as the tech boom generated new high-paying jobs and enormous wealth. San Francisco home prices rose 112% between January 2012 and January 2020, outpacing a national 58% gain in that period, according to S&P Dow Jones Indices. The median existing single-family home-sale price in San Francisco was $1.465 million in February, down from a peak of $2.06 million in March 2022, according to the California Association of Realtors. West Coast markets have also long been supply constrained due to high land costs and regulations on new-home construction.
As home prices hit new highs in 2021 and early 2022, these markets became even less affordable. In Los Angeles, about 63% of the area’s median household income would be needed to make mortgage payments on the average priced home in January, according to Black Knight. Laura Johnson, a 59-year-old technology project manager, put her Seattle house on the market in September for $800,000. In October, after dropping the price to $745,000 and getting no offers, she took the house off the market. “In Seattle, sales just completely dropped off,” she said. Ms. Johnson relisted her home in February for $750,000. “I was very cautious about putting it back on,” she said. She cut the price to $740,000 last week. If she sells her home, Ms. Johnson plans to move to Florida.
Laura Johnson has been unable to find a buyer for her home in Seattle. CHONA KASINGER FOR THE WALL STREET JOURNAL (2)
Seven of the 10 least-affordable markets in January were in the West, including San Francisco, Seattle and Los Angeles, according to Black Knight. Along with those, the quickest areas to slow down when mortgage rates rose in 2022 were the “Zoomtowns”—the metro areas that experienced rapid population growth during the pandemic as remote workers and retirees moved to lower-cost housing markets.
The housing markets in cities such as Boise, Idaho, Phoenix, and Austin had become flush with money from out-of-state buyers and less affordable to those with local incomes. As rates climbed, demand slowed sharply, weighing on prices. The median home-sale price in Idaho’s Ada County, which includes Boise, was $492,115 in February, down 10.5% from a year earlier, according to Boise Regional Realtors. That price is almost $130,000 above the median price nationally, making it unaffordable, or at least less of a bargain, for many out-of-state buyers.
“Now you have to have some other compelling reasons why you are looking at the Boise market other than just pricing,”said Debbi Myers, president of Boise Regional Realtors. That’s good news for local shoppers, who are facing less competition, she said. Nearly all the frothiest housing markets going into last year were West of the Mississippi River. In January 2022, an analysis from Florida Atlantic University and Florida International University named Boise, Austin and Ogden, Utah, as the most overvalued housing markets in the U.S. Eight of the top 10 most overvalued markets that month were in the West, Mountain West or Texas.
This year, some of the most stretched prices can be found further east, a sign that prices in these markets may turn negative on an annual basis soon. In January, the analysis found Atlanta, Cape Coral, Fla., and Charlotte, N.C., were the most overvalued, based on how far prices have risen above their long-term pricing trends. The top 10 were all in the South and Midwest. “Markets are overpriced,” said Ken H. Johnson, a real-estate economist at FAU, but “they’re not as overpriced as the markets a year ago.”
Boise, Idaho, was named the most overvalued housing market in the U.S. in early 2022.
A year later, Charlotte, N.C., is considered one of the most overvalued. KYLE GREEN/BLOOMBERG NEWS, ANGELA OWENS/THE WALL STREET JOURNAL
Even with more price declines expected, lower-than-normal supply of homes for sale is one reason that economists and market participants say the current housing slump won’t bring the national price collapse that followed the subprime crisis. The U.S. had a low inventory of homes for sale heading into the pandemic and the number of active listings is still well below pre-pandemic levels. Home builders have been hampered by supply-chain issues and labor shortages. Most homeowners with mortgages have a current rate below 4%, and many don’t want to give up their current rate and pay a higher rate for a different house. Many homeowners are also sitting on large cushions of equity, which is likely to prevent a big wave of foreclosures and distressed sales.
“Home prices absolutely are going to drop” in many markets, said Matthew Gardner, chief economist at Seattle-based brokerage Windermere Real Estate. But “the only time you see a significant decline in home values is when you see significantly more supply than you do demand, and that is not going to happen.” Joe Stanich and Cait Peltyszyn started looking to buy a house in northern New Jersey in December, but they were discouraged by the lack of inventory and the persistence of higher borrowing costs. The couple had an offer accepted on a two-bedroom home this month, but the seller backed out to accept a higher competing bid, Mr. Stanich said.“It is frustrating,” he said. “Any talk of the market coming back to reality, or at least cooling off, coming down, is not playing out in this area.”
Usually when someone mentions March Madness we think of basketball, but that also describes the real estate market in our area right now. The national narrative on the news is grim, but things are picking up. Pending home sales, an important market indicator, were up 8% nationally in January on top of a 2.5% gain in December. Our local market here in Fairfield County is quite robust. After a slower November and December, things are really picking up. The number of people attending Open Houses is higher than pre-pandemic levels, and agents are still receiving multiple offers, many over asking.
Homes in our area are typically trading at 8-15% over asking, making it tricky and intimidating for buyers to stay engaged and submit competitive offers. We have strategies to help buyers feel confident and compete in this market so please reach out if you are thinking of buying. You won’t win if you don’t play!
Homes that are trading over asking have a couple of things in common: price and presentation. If you’re a seller and your home is adequately prepared for market (all repairs done, good curb appeal, updated), and it’s priced correctly, it will trade quickly. Price matters!! It’s very tempting for sellers to “test” the market by listing their home at an increased price – we get it. But the longer a home stays active on the MLS, the more buyers will wonder what’s wrong with it. Let us help you with a pricing strategy. And when those offers come in we can help you evaluate each one. A high offer price is fantastic, but terms also matter. We can help you manage those offers and choose the best one for you.
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