By John Tarducci, CMP, CRB Senior Vice President New Homes Division www.raveis.com

(from http://blog.raveis.com)

 Emerging from the economic slowdown that began in 2007, the new home construction sales market in the Northeast has turned a corner. Although signs of stabilization vary widely by region, and even by town, there are clear signals that the rate of decline has largely leveled out and is paralleling the turnaround in existing home sales. 

In Connecticut, for example, 2009 building permits should settle in the 3,000 range by year's end. While still far short of the more than 11,000 permits issued in 2005 or the 7,746 permits issued in 2007, the slowdown may have reached its end.    

High Levels of Affordability Drive Home Sales

The good news for buyers is that housing affordability is currently at one of the highest levels that we've seen in nearly 20 years, driven by attractive mortgage rates and adjusted home values.  New levels of affordability are motivating buyers to re-enter the housing market so they can take advantage of unusually low pricing levels throughout much of the Northeast.  

Sales data in some areas confirms that buyers are indeed becoming more active. The number of existing home sales in Massachusetts that were pending (or put under agreement), for example, was up 27% in October 2009 for the fifth month in a row, compared to October 2008. And both single family home sales and condominium sales were up 17% in October from a year ago, the Massachusetts Association of Realtors reported. Massachusetts realtors attribute the spike in sales, which has been more apparent at the lower price ranges, to the $8,000 federal tax credit available to first-time homebuyers. 

A similar trend is apparent in neighboring Connecticut, where sales of single-family homes and condominiums rose by 11.5% and 10%, respectively, in October.  

The $8,000 federal tax credit has been extended through June 2010 and the income limits for eligible homebuyers has been raised, enabling a greater number of buyers to quality for the credit. We believe that the extension of the first time homebuyers' tax credit will continue to help drive buying activity, as will the new $6,500 tax credit for step-up buyers who wish to trade up.  ("Step-up" buyers are those who have owned and occupied a residence for at least five of the past eight years.) 

New Construction Pricing is Determined Differently

Unlike sales of existing homes, however, pricing in the new construction marketplace is not only determined by supply and demand, but also by the cost of land, materials and labor.  

While some economists remain pessimistic, predicting that a full market recovery could take another three to five years, others sense that the worst is behind the industry and that a recovery is indeed underway.  In either case, certain markets show greater resilience and tend to recover more quickly, simply because they are great places to live; many offer perennial value and will always be perceived as desirable due to waterfront locations, proximity to a major university or commutability to a leading jobs center. 

Buyer Priorities Have Shifted Dramatically

Still, today's buyers are exhibiting strikingly different buying behaviors than their predecessors did just a few years ago.  Today's consumers are opting for smaller square footage with the same quality features of larger homes  and are shrewdly assessing the huge cost savings that come from heating and cooling a smaller home, not to mention reduced maintenance and furnishings expenses as well as lower property taxes. 

In the past, one often universal mindset among buyers was "Bigger is usually better." Today's buyers, in contrast,  have developed a new sensibility, one characterized by a pragmatic, frugal assessment of the "cost to operate" over the long term as well as a newfound appreciation for the financial benefits and enhanced quality of life that energy-efficient homes offer.

By Angela Thelin, Managing Director - Exceptional Properties on January 25, 2010 Exceptional Properties | 1 Comment »

Let's start by defining "Luxury Properties". In essence, they are properties  with distinct price points that differ from area to area. For the purpose of this writing, I have split this market into three different price levels: $1-3M, $3-5M and $5M+.  

After an increase in listing inventory over the first half of 2009, I see some clear signs of movement and a hope for positive things to follow.  In general, there was an increase in activity level after May, however it was primarily the lower end of the luxury property market that was moving.  This follows the same pattern as previous years, keeping in mind that the total sales volume is higher in this price range. Interestingly, the listing inventory was lower than 2008 at the same time. The lower inventory translates into less properties on the market for buyers to choose from and better opportunities for sellers.   With all that said, pricing the home correctly is a big component in the sales activity.

 

 From January to October last year, 779 sales were reported in the range of $1-3 million compared to 1168 for the same time in 2008 and 1791 in 2007. Sales in 2009 was consequently 33% below 2008 and 57% below 2007. If we just look at the last five months for the same years we see that sales are 22% below 2008 and 45% below 2007, which is a sign that we are moving in a positive direction. On top of this, sales in October were higher than for the same period in 2008. You can expect properties at this price point to stay on the market for an average of 144 days compared to the average of 126 and 118 from same period in 2008 and 2007. 

 

 At the $3-5 million listing price range, we had 89 sales through October 2009, again with the highest number of sales during the summer.  Sales for the same period in 2008 were 151 and 252 for 2007.  Just looking at the last three months we can see that the number of sales during the two last years are almost on par at 40 sales and just 35% lower than 2007. The average time for a property to be on the market at this price point is around 171 days.  From the chart below you can see the inventory in 2009 is higher than the same period over the past two years.

 

 Moving onto the higher tier of luxury homes, $5+ million, there were 55 sales in Connecticut from January to December 1, 2009 compared to 77 sales in 2008 and 141 in 2007.  The number of sales from September through November was slightly higher than this same time in 2008: 22 vs. 20. Even though it is considerably lower than the 41 in 2007, it's still a positive development. At this price point you can expect your average days on the market to be around 196, which is in line with the situation for 2007 but about 50 days longer than in 2008.You can see the total inventory building over the past years and remaining at a higher level in 2009 compared to the prior two years.

 

Fairfield County is following the trends of the State as there is a higher concentration of the higher end homes in this County than the rest of Connecticut. 

For information on the latest statistics in your specific city or town, visit

http://www.raveis.com/localhousingdata.asp . 

To learn more about how to analyze the data visit http://blog.raveis.com/2009/11/16/analyzing-the-data-for-buying-and-selling-a-home/

More luxury market watch blogs to follow for MA, RI, and Westchester County, NY

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This home is designed to bring water views into every room in the house. Features include high ceilings, spacious rooms and natural stone fireplaces. First level entertainment and media room with fireplace accessing sloping waterfront backyard. Second level is surrounded by walk out deck and sliders in every room for spectacular sunrise views. Stainless eat in kitchen, beautiful hardwoods and open floor plan.

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This property was on the market for only 42 days!  Listed on September 23, 2009 and went under contract on November 4th, 2009.  We had a multiple bid situation and went to "highest and best" offer.

This is a truly wonderful property in an excellent location on Bellevue Avenue in Newport.  Originally built in 1871, the property remained in the same family until 1999 when it was sold as an estate sale.  The home will be lovingly restored to the original grandeur by the new owners.  We can hardly wait to see this home finished!!

The real estate market is alive and well in Newport!

Beautiful Carnegie Abbey Golf Lodge residence with magnificent views of the 18th green and Narragansett Bay. This 2 Bedroom, 2 ½ bath residence is just next door to the Clubhouse, close to all of the amenities and services. Shamrock owners will enjoy a fabulous widow's walk, stone fireplace, a golf cart, storage and more. $1,250,000

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Our months of inventory is getting much more in line with what we need to see for any appreciation in 2010.  With virtually no new construction, we will continue to see erosion in supply.(Please note that the Active category includes all Pending sales; short sales, market sales; pendings, etc).

One thing that really jumps out at me is the concentration on the low end.  89% of all sales in the State of Rhode Island in the past 12 months have been under $400,000.   Guess the first time homebuyer tax credit really is working!!  Also, investors are jumping into the market in a big way.  Why not?  Lots of multi-family properties are paying over 10% return on cash - I've seen some deals that are paying nearly 40% return on cash!  Who wouldn't make that investment!!!

What a diffference a few months can bring!  In February/March the end of the world was near, but now we have a vibrant and very active real estate market!

Sales volume will be up over 6% from last year, prices are stablizing and some markets have a VERY low supply.  For instance, properties under $400,000 in Newport and Middletown are seeing less than 5 months of supply - indicating APPRECIATION!!  WOW! Prices going UP!?  CRAZY!!!

Yes, Virginia, there is a Santa Clause!

Keep Hope Alive!!

If you are thinking of buying in the next year or so and decide to wait - all indicators say that you will be seriously dissapointed.  Analyze the market, find a good buyers broker and DIVE IN! 

Visit www.arthurchapman.raveis.com for local housing data.  Do your "home"work!!

Rhode Island has seen a significant recovery in the real estate market.  Our volume of sales is a strong indication of this rebound.  While our unemployment numbers are still very high, there is significant job creation slated for this year in certain areas of the state.  Our supply is dropping rapidly and there isn't a tremendous amount of available land for new construction.  Therefore, appreciation in our real estate market is near, if it hasn't already started.  In some markets we are seeing less than a 4 month supply of properties on the market - which would suggest significant appreciation in the short term.  With historically low interest rates and low supply, NOW is the time to invest!

The month of November saw a strong number of closings.  In fact, it was one of the strongest months in the past 13 years!

Our sales are already 17% above last year and are projected to be on par with 2007. 

We are offically "walking out of the woods".

Keep Hope Alive!!

Relax on your waterfront dock, kayak or boat on the saltwater pond or glide out to the bay from your backyard. Private and serene setting on lush landscaped acreage in a desirable peninsula location close to Ocean Beaches, Newport, Providence and one hour from Boston.

This home is designed to bring water views into every room in the house. Features include high ceilings, spacious rooms and natural stone fireplaces. First level entertainment and media room with fireplace accessing sloping waterfront backyard. Second level is surrounded by walk out deck and sliders in every room for spectacular sunrise views. Stainless eat in kitchen, beautiful hardwoods and open floor plan.

Get ready to move in and enjoy, your waterfront dock is waiting!

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The demand for real estate on Aquidneck Island has surged this past summer and suddenly we are facing a shortage of supply!  Are we ready to see prices INCREASING in the area soon?  Prices going UP?  Very strange, but a real possibility.

Newport County has seen a nearly 30% reduction in values since 2006.  That's a big chunk of the value of your home just vaporizing in the air.  Gone..But recent demand in the under $400,000 range of the market has been very strong.  In fact, we are at 8 months of supply on Aquidneck Island between $300,000 and $400,000.  This short supply could create increasing prices in the area as our demand isn't slowing. 

In fact, there is significant job creation happening on the island, bringing in 300 full time employees to the US Naval Base and the student population is slated to nearly triple - from current 6,000 to projected 16,000.

Strong demand + decreasing inventory=Rising prices!!

Perhaps we are starting to come out of the woods!

Keep Hope Alive!