How’s the Real Estate Market? July 2007 Real Estate Market Statistics
August 22, 2007
The New London Day published a column written by Jeff Blodgett of the Connecticut Economic Research Center on the market in southeastern CT but this commentary relates to all of CT.
Although regional housing prices are high by historic standards, I see no apparent indication of a bubble bursting in this region. Continued declines in number of sales could lead to some price reductions but, even if median prices were to decline by 10 percent to 15 percent, housing values would still be double what they were in 1998.
The ongoing housing slump, unlike that of the early 1990s, is not fueled by widespread speculative lending by banks or a tremendous overbuilding by builders that resulted in the large inventory overhang that precipitated the 1989-1992 real estate collapse. Uncertainties about further weakening in home prices are causing many buyers to remain on the sidelines.
The biggest wild card, in my opinion, is further bankruptcies among large sub prime lenders, a phenomenon that is now extending to near-prime lenders, as shown by the near bankruptcy of American Home Mortgage. The ripple effect of a few of these types of lenders would be widespread.
Here are the statistics released by the Greater Hartford Association of Realtors for single family home sales in Greater Hartford. The trend over the last year has been that home prices are rising but that more houses are on the market and are spending more time on the market.
Signs of a Weakening Real Estate Market
Using year-to-date figures for 2006 and 2007 and figures for the month of July 2006 and July 2007.
- The number of closed sales in the single family residential market is down
- 10% fewer closed sales for the year compared to YTD 2006 and almost 7% fewer than just the month of July in 2006
- Average days on market is up
- Homes are spending 5 more days on the market compared to last year, YTD
- Homes are spending 2 more days on the market compared to July of 2006
- Inventory is up
- 14% more homes are on the market in July 2007 than in July 2006
Signs of a Stable Real Estate Market
- Pending sales are higher, not enough to soak up the extra inventory but people are still buying homes
- YTD, there are almost 2% more pending home sales than last year
- When compared to the month of July 2006, there are almost 6% more pending sales
- Median sales prices are still notching upwards
- YTD, the median sales price is $260,000, up from the same period in 2006
- In July, the median home sales price was $273,900, up from $265,000 in July 2006
Entry Filed under: Connecticut, Housing, Prices, Real Estate, Real Estate Market. .
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1. Los Angeles Attorney | August 22, 2007 at 5:59 pm
Good real estate info. Thanks for the read!
As far as the real estate bubble goes, it looks worse in San Diego.
I came across a San Diego real estate broker’s blog post that is to be the only one I’ve seen that does not spout the ‘industry line: “It’s always a good time to buy real estate.” This broker calls it like it is. No it’s not PC, but it is amazingly informative and insightful.
Bob Schwartz, the San Diego real estate broker who publishes the blog, wrote a great article back in 2005 that predicted today’s huge home deprecation. You can read this article at: San Diego real estate the url is:
http://www.brokerforyou.com/brokerforyou/?p=11
2. Pete | August 22, 2007 at 8:24 pm
Good reading, but the year end data will be more telling as the subprime effect did not begin to take hold until June and July and the data do not reflect what prices homes sold for in July and August, historically, fairly big months for moving and house buying. A lot of financial writers have described the whole mortage implosion/meltdown as watching a train wreck in slow motion.
3. Pete | August 22, 2007 at 8:27 pm
there is another good book out there titled “Empire of Debt” that touches on the real estate market crashing - it draw a comparison to where the US is and comares the US to where japan was in the late 1980s and early 1990s - 10 years of declining real estate values occurred in Japan and they had one fo the highest savings rates in the world whereas the US has one of the higher debt rates - both the govt and taxpayers both being in deep debt simultaneously - setting up for bad things to happen down the road…
4. The Feed Bag - All The To&hellip | August 23, 2007 at 12:37 am
[...] Jessica Beganski has a nice overview up for the Connecticut Real Estate Market. [...]
5. berealct | August 23, 2007 at 12:07 pm
Time will tell in CT. I’m not sure we’ve seen as much subprime lending in CT or speculative real estate so I don’t think we’ll see prices dipping by much. Thanks, Pete, for that book recommendation. I will definitely read it because I agree that the debt culture is not sustainable.
6. Lyn | August 29, 2007 at 3:10 am
I want to buy but this is all so confusing to me. I just want to someone to tell me if I buy a home right now at 290 if that is going to come back and bite.
7. Pete | August 29, 2007 at 1:53 pm
Lyn, the smart money is on the sidelines right now, earning interest. The CLI economic indicators are falling which is a bad sign for conditions down the road. The stock market might suffer greatly next month, which will feed upon the problems in the housing market. In my opinion, current and future real estate market conditions favor neither buyers nor sellers - unless of course you are a billionaire and have some cushion of protection - the top 3% of wealth never feels economic crunches. The inventory problem in housing will not go away until prices fall by A LOT. This is basic laws of supply and demand from economics 100. Try to find out what that 290,000 house was worth in 1999 and that would be about what you’d want to pay to be insulated from falling home values which will continue for some time to come….good luck.
8. berealct | August 29, 2007 at 2:11 pm
Lyn,
I think the answer depends on your situation and the market can only be one factor. Sorry, Pete, but I think your answer is too simplistic and applies to only a certain segment of the buying marketplace.
For example, are you buying for investment purposes only?
How long are you looking to hold onto the property?
Where are you looking to buy?
What type of mortgage? 100% financing or 80/20 and what rate?
Are you renting? Are you trying to sell something?
9. angelo | August 31, 2007 at 4:09 pm
berealct,
So which situation of the ones you mentioned would be favorable?
10. berealct | August 31, 2007 at 7:22 pm
I think buying a house makes sense if you can buy at a good price (a little or a lot under “market value”), you can afford the mortgage (and have some play money still), you’re going to hold onto it for a few years, and you want the responsibility. Interest rates are great, there is a good supply of houses which increases your chances of buying under value, and buying is much more likely to earn you some money when you sell.
Buying doesn’t make sense if you’re not going to stay in it, you don’t have any money to put down, you can rent for cheap and save money, you have bad credit or you’re going to try to flip it without any previous experience. Those are some scenarios where I would stay away from buying.