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Judy Hendrickson's Blog

By Judith Hendrickson, Agent | Agent in New Canaan, CT

New Canaan Market Trend


The current average list price for a single family home in New Canaan, CT  is $2,406,345. July's average sale price was $1,536,645. Based on this difference you may begin to think all houses in New Canaan are overprice. That's not necessarily true. In fact, the sale to list price ratio was over 95% for the month of July. What is causing the reduced average? It's simple. Many of the higher price homes were rented. These houses were often listed for sale AND rent. If a $4,000,000 house gets rented instead of sold, the house is removed from the system but the "for sale" statistic doesn't get removed.



Comments

By Jeff Metcalf, REALTOR®,  Tue Aug 28 2012, 11:40
Thanks for sharing~
By ** Stephan von Jena **,  Tue Aug 28 2012, 12:04
Thanks Judy, however see the below article that paints a less than stellar view of our markets. Keep in mind that statistics all depend on the questions asked! I'm no "doom and gloom" kind of guy, and prefer to look at specific market segments and how they have performed over time. Our Fairfield County stats would look very different if Bridgeport were not part of the data - obvious, but frequently overlooked. Keep the faith, as our local Darien and New Canaan markets are still recognized and desirable communities and the trend line data we're tracking continues to show steady growth in specific segments. Cheers - Stephan

Connecticut Homes Biggest Losers on Cuts: Mortgages (Correct)
2012-08-28 12:58:16.875 GMT


    (Corrects square foot conversion in 21st paragraph.)

By Prashant Gopal and Heather Perlberg
    Aug. 28 (Bloomberg) -- Connecticut, for 25 years the state
with the highest per capita income in the U.S., is now leading
the nation in home-price declines as Wall Street trims jobs and
bonuses that had driven multimillion-dollar property sales.
    Prices in the Fairfield County area, home of the banker
bedroom communities of Greenwich and New Canaan, tumbled 12.9
percent in the second quarter from a year earlier, the biggest
decline of the 147 U.S. metropolitan areas measured by the
National Association of Realtors. While the number of home
purchased within the state financed with conventional mortgages
rose 8.4 percent in the first half, deals using jumbo loans for
pricier properties slid 9.4 percent, according to Warren Group,
a real estate tracker.
    “We’re in a tough slog here relative to everybody else,
which is surprising given where we’re located, near New York and
Boston,” said Terence Beatty, director of the new homes and
land division of Prudential Connecticut Realty in Wallingford.
    The state, which hosts the world’s two largest bank trading
floors within UBS AG and Royal Bank of Scotland Group Plc’s
Stamford offices, is falling behind a U.S. housing recovery
after losing 3,900 financial-services jobs since July 2011, the
most of any industry. Connecticut also is struggling with rising
foreclosures, posting the nation’s second-biggest jump in
notices of default and repossession last month.

                         Prices Fall

    Prices for single-family houses fell 4.7 percent in the
second quarter, the biggest decline of any state, according to
the Federal Housing Finance Agency, which measures transactions
financed with mortgages backed by Fannie Mae or Freddie Mac.
That compares with a nationwide increase of 3 percent, the most
since 2006, as record-low mortgage rates and a limited supply of
properties for sale provided a foundation after the worst
housing crash since the 1930s.
    The median sales price for Manhattan condos and co-ops in
the second quarter was $840,000, up 2.4 percent from a year
earlier, according to StreetEasy.com, a property listings
website. In the Boston area, the median price for a single-
family house rose 1.8 percent to $362,100, data from the
National Association of Realtors show.
    Connecticut doesn’t have as much economic diversity or
appeal to international buyers as Manhattan, according to James
Aiello, who co-owns about six houses in the Greenwich area that
he began purchasing in the mid-2000s.
    The state has only regained a third of the about 117,500
jobs that it lost during the recession, figures from the
Connecticut Department of Labor show, and the unemployment rate
has risen for three straight months to 8.5 percent.

                       Moody’s Downgrade

    Connecticut’s general-obligation bond rating was cut one
level to Aa3 in January by Moody’s Investors Service, which said
it’s susceptible to financial market fluctuations because of
dependence on taxes on capital gains from wealthy residents and
employment in financial services.
    Connecticut debt has earned 3.3 percent this year, the
least among U.S. states and trailing the 5.3 percent return on
the broader $3.7 trillion municipal market, according to
Barclays Plc data. New York, which may be get its highest credit
rating in four decades after Standard & Poor’s yesterday boosted
its outlook to positive from stable, has gained 4.8 percent.
    Changes in compensation practices at banks are responsible
for pulling down prices in the lower Fairfield County area, said
Mark Pruner, an agent with Prudential Connecticut Realty in
Greenwich. Wall Street firms have curbed pay and changed
formulas to limit expenses, with some giving more stock and
deferred cash and less immediate payout.

                         Average Bonus

    The average Wall Street bonus fell 13 percent last year to
$121,150, the lowest since 2008, and almost 40 percent less than
the $191,360 reached in 2006, according to projections by New
York State Comptroller Thomas DiNapoli.
    A big jump is unlikely for 2012. JPMorgan Chase & Co., Bank
of America Corp., Citigroup Inc., Goldman Sachs Group Inc. and
Morgan Stanley reported the worst first half revenue since 2008,
which they blamed on low interest rates and a reduction in
trading and deal-making brought on by concerns about European
government finances and slowing domestic growth.
    Issuance of jumbo mortgages, which are too large for
government-supported programs, is falling in Connecticut amid
lower demand and tighter lending standards. The dollar volume in
Fairfield County, where the loan limit for Fannie Mae and
Freddie Mac loans is $601,450, fell 14 percent to $739 million
in the first half from a year earlier, according to Boston-based
Warren Group.

                      Prospective Buyers

    Jeffrey Weisz, an executive at a company that invests in
green-energy projects, put his five-bedroom house on five acres
(2 hectares) in New Canaan up for sale five months ago for $1.2
million. While prospective buyers came to “kick the tires,” he
received only one offer, which fell through because the borrower
didn’t qualify for a mortgage. He said his neighbor has had
three offers fall through because of financing problems.
    “I don’t think they have the wherewithal to put down down
payments,” he said. “They do have letters from banks that say
they’re qualified but that assumes substantial equity.”
    In Greenwich, the base for many of the world’s largest
hedge funds, the median home price fell 11 percent in the first
seven months of the year to $1.55 million compared with the
year-earlier period, according to data provided by John Cooke,
an agent with Prudential Connecticut Realty. While sales were
down 3 percent, they plunged 19 percent for properties above $2
million and climbed 10 percent for below that amount.
    “What we’re seeing is a change in the market mix,” Pruner
said. “The upper end of the market was been significantly
slower. When you have a whole bunch of lower-end sales and fewer
higher-end sales, the price has to drop.”

                       ‘Bottom Feeders’

    Some bankers are opting to rent because financial firms
have raised base salaries and deferred earnings while shrinking
cash bonuses.
    William Jandrisits, who took a job in Canada in 2010,
abandoned hopes of selling his $2.7 million house in Greenwich
this summer. A year-long search for buyers garnered two serious
offers and several from “bottom feeders,” he said.
    He offered the 4,000-square-foot (372-square-meter) house
for rent, and a New York-based investment banker agreed two
weeks later to take it for $11,000 a month.
    “The market just wasn’t there,” Jandrisits, who worked at
Starwood Capital Group LLC in Greenwich until 2010 when he
became president and chief executive officer of MCan Mortgage
Corp., a publicly traded mortgage-investment firm in Toronto.
“The market was so much a buyer’s market that you were getting
twisted through consecutive negotiations to make more and more
changes to the offer to the benefit of the buyer after you had
agreed on a price.”

                         Badly Damaged

    Patrick Flaherty, an economist at the Connecticut
Department of Labor, said the past year isn’t a clear indicator
of the market’s health because the state’s economy and real
estate values haven’t been as badly damaged as areas that are
seeing the most home-price appreciation. While house prices in
Connecticut have dropped 18 percent in the past 5 years, about
the same as the U.S. decline, they have fallen 40 percent in
California and 42 percent in Arizona, according to the FHFA.
    Home sales rose 11 percent in Connecticut in the second
quarter from a year earlier, Warren Group figures show. They
increased just 1 percent in Fairfield County.
    “Some of the issues that were so pervasive and widespread
in other parts of the country are now coming here in a milder
form,” Flaherty said. “We’re behind in the sense that other
states were hit hard, they bled a lot and it looks like they’re
getting better.”

                           UBS Stays

    There are also some positives. Connecticut reached a deal
last year with Zurich-based UBS to keep at least 2,000 jobs in
the state in exchange for a $20 million “forgivable” loan. The
lender, which had 3,500 people in Connecticut, announced plans
last year to cut the same number of jobs globally. It had
considered moving U.S. investment-bank staff to Manhattan, a
person with knowledge of the matter said at the time.
    Bridgewater Associates, the world’s biggest hedge fund with
$77.6 billion of those assets under management as of January,
said this month that it plans to build a $750 million
headquarters in Stamford, financed partially with state aid. The
company agreed to create as many as 1,000 “high-level” jobs
within 10 years, while retaining its existing workforce of about
1,225 people now based in nearby Westport. Cigna Corp. and NBC
Sports Group are among the other firms that are taking advantage
of a state tax-incentive program by agreeing to add hundreds of
jobs.

                     Foreclosure Backlog

    Connecticut’s foreclosure backlog poses another challenge
to a recovery, especially in poorer areas of the state. It now
takes 656 days for a bank to seize a home, the longest after New
York, New Jersey and Florida, according to RealtyTrac Inc.
Connecticut’s foreclosure filings increased 139 percent in July
from a year earlier to 1,544 properties. The jump was second
only to Vermont.
    Like neighboring New York and New Jersey, Connecticut
requires banks to get a judge’s approval to seize a home, a
process that has clogged the courts. The state’s supply of
properties that are at least 90 days delinquent or in some stage
of foreclosure -- known as shadow inventory -- increased more
than 6 percent from a year ago while most states are seeing that
overhang diminish, according to the Mortgage Bankers
Association.
    A $25 billion settlement in February with top banks over
allegations that they seized homes without proper documentation
may have opened the way to more listings of lower-cost
distressed properties.
    In retirement destinations such as Florida and Arizona,
where prices fell much further than in Connecticut, investors
have jumped in to buy discounted foreclosures.

                       ‘Getting Worse’

    “Things are getting worse in Connecticut,” said Daren
Blomquist, vice president at RealtyTrac. “As additional
foreclosures come online, it could have chilling influence on
home prices in Connecticut. If there’s not a lot of demand for
houses falling into foreclosure, that’s going to hamper any
housing recovery.”
    The reasons for Connecticut’s housing weakness aren’t just
local. Homebuyers are holding back because of economic crises
brewing thousands of miles away, said Nick Perna, economic
advisor to Waterbury, Connecticut-based Webster Bank and
lecturer in Economics at Yale University.
    “For many people in the United States, this whole thing
about the Eurozone is an abstraction -- some battle between
Germans, Italians and Spaniards,”  Perna said. “If you live in
Connecticut and work in financial services, it’s very real
because it could affect your job, your bonus and therefore your
ability to afford a nicer home.”

For Related News and Information:
Mortgage Columns: NI MTGCOL
On banks and earnings: TNI BNK ERN
Government relief programs: GGRP
S&P/Case-Shiller city history: NSN L1JDJX07SXKX

--With assistance from Michael J. Moore and Oshrat Carmiel in
New York. Editors: Pierre Paulden, Kara Wetzel, Rob Urban

To contact the reporters on this story:
Prashant Gopal in New York at +1-617-210-4640 or
pgopal2@bloomberg.net;
Heather Perlberg in New York at +1-212-617-0407 or
hperlberg@bloomberg.net
By Judith Hendrickson, Agent,  Tue Aug 28 2012, 14:41
Great posting Stephen - New Canaan is seeing a market correction, but it's not as drastic as it looks on paper. Home owners do need to notice that overpriced houses are NOT selling and they should listen to what the market is saying. Too many home owners think they are selling cream when really they have skim milk. In the high price housing market, many sellers want to make big profits or at least minimize their losses and aren't willing to adjust their thinking to current market conditions. CT housing has been deeply impacted by raised mil rates and conveyance taxes. Home owners have enough trouble keeping their houses in good working condition. More disposable income means more buying power. Just wish our policy makers could understand that fact.

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