Wednesday, November 05, 2008

Fairfield County Market Update

Single family sales on the Greater Fairfield County Consolidated multiple listing service, during the first nine months of 2008 continue to lag behind last year’s pace. To date, we have 4,163 closed sales and an active inventory of 5,252 homes. That represents a unit sales decrease of 29% vs. 2007 resulting -in 11.4 month supply of homes on the market, as we move into the slower selling months. The median selling price county-wide on the Greater Fairfield County Consolidated MLS is $520,000 down 8.8% but that includes a range of prices differing by town with increases in some towns and decreases in others. So it is important that you ask your REALTOR the specifics about the town that interests them.

Buyers are being very cautious. They don’t want to overpay in a declining market. Lenders are also being very cautious. They are instructing their appraisers to take a conservative approach in determining property value.

The top end of homes sold continues to represent a disproportionately low percentage of sold properties. Homes over $2mm represent 5.8% of the total and those over $3MM represent 2.5% of the total.

Among the properties currently on the market, 12% are over $2MM and 5.9% are over $3MM. That is more than double the percentage of homes in those price ranges that have sold this year. It is also interesting to note that the median price of the active single family homes is 20% higher than the median list price of the homes that are under contract which would indicate that unless there is a sudden change in market conditions, sellers will have to reduce prices to get their homes sold.

There are 441 properties with non-contingent contracts waiting to close. The median price of those homes is 15.8% lower than the median of the closed homes so far this year.

There are 239 properties with accepted offers. The median list price of those with accepted offers is $392,000, 24.6% lower than the median selling price for the properties that have closed so far this year. This shows that the sales rate is slowing and that is expected at this time of the year. But it also shows that the median price of those properties that are selling is decreasing. If this pattern continues, those sellers who sell first will get more money.

Interest rates are increasing and although they are expected to continue to fluctuate, the trend over the next year is expected to be upward. Thus, this a great time to purchase a home. Buyers who wait until interest rates rise might as a result get less house for the same monthly payments if they purchase at a higher rate.

Sellers should talk to their REALTORS about ways to make their homes stand out above their competition and if they really want to sell they must price realistically! Buyers should be cautious about working with reliable lenders. Many lenders are currently heavily leveraged and buyers should remain in constant contact with their REALTORS and lenders and close as quickly as possible.