As predicted, the real estate market has slowed dramatically since the $8,000 tax credit faded into the sunset. The majority of first time home buyers seem to have put their home buying searches on hold creating a ripple effect for those trying to sell their properties and either upgrade or downsize.
Many buyers now in the market are relocating from outside the area and are becoming extremely picky when making a purchase. Inventory is high but the quality of the properties priced accurately is discouraging. Those properties that show pride of ownership and are priced right are selling quickly. Successful sales are creating a downward push on value because they are creating the market and become the most recent sales comparables. I have not seen a transaction this past year without the following language. â€œProperty must appraise at or above the purchase price.â€ I encourage all of my clients to have their properties appraised by a local reputable appraiser in an effort to prove value and get in line with the market before we see a greater decline. Your competition will ultimately remove themselves from the market or get aggressive with their pricing which will ultimately lower the value of your property.
Yes, we believe that a decline is still in the cards for the remainder of the year. This is attributed to a weak perception of the market due to the value of our currency, slumping stock market, record inventory levels, foreclosures, short sales, and strategic defaults.
The good news is that luxury properties, second homes, and land are beginning to move. This tells me that investors, wealthy individuals and, and developers view us as nearing the bottom and are taking advantage of below market opportunities. The issue is that they are buying these properties with cash and at great discounts, thus lowering the values of surrounding homes and creating a greater downward push in value.
We should pay particularly close attention to land values going forward. Developers have historically earned a return of 25% on a project and that is very difficult to achieve in todayâ€™s market. Materials, labor, and costs to construct a structure have remained levelâ€¦.leaving me to believe that land values must drop in order to make construction a viable option. Of course supply has to be reduced and demand has to increase as well a drop in unemployment.
Average price per square foot for Mystic CT was $176, a decrease of 7.9% compared to the same period last year. The median sales price for homes in Mystic CT for Apr 10 to Jun 10 was $265,000 based on 15 home sales. Compared to the same period one year ago, the median home sales price decreased 7.3%, or $21,000, and the number of home sales decreased 44.4%.
There are currently 194 resale and new homes in Mystic. The average listing price for homes for sale in Mystic CT was $632,815 for the week ending Jun 30, which represents an increase of 0.1%, or $601, compared to the prior week.