Are Fairfield County home prices stabilizing?

Is it possible to gauge whether home prices in our area are beginning to stabilize, or is it just wishful thinking? The answer is yes, it is possible to gauge market stabilization, however there has to be enough sales to make an accurate judgement- right now, there are not enough sales to back up the rosy outlook that we all want. BUT that does not mean  that the market is all gloom and doom- it's not.

I have always been  fascinated by statistics, and have kept lots of market data throughout the years, and reported market data for various publications. I am not new to this- I have been actively engaged in real estate for 27 years including  selling through  a similar market. Like so many others at that time, we  didn't see it coming. One thing for sure though, I made sure that I paid special attention to what happened as we were getting out of that horrible market.

I won't beat up on the first quarters sales statistics too much. We had  the worst winter on record, here, and buyers and sellers alike waited just for that alone- so the quarterly stats may not look fantastic, but they must be seasonally adjusted, so if  you hear the media speaking somewhat pessimistically about this first quarter sales in the Northeast, I am asking you to remember that they are reporting  news as they see it from a  multi-state region- and honestly, you know as well as I do that even if you hear a report on Hartford CT real estate, it doesn't really have too much of a bearing on where we are in Fairfield County, now does it?  

The first thing that happens in a market rebound is that certain "price pockets" begin to sell in each town. What I mean by a price pocket is (for example)- a range from $500-600K will start to  move more quickly than it has, and at the same time, another price pocket of maybe 1mil- 1.2 mil will start to move. The overall market may not seem to be moving in general- (if you look at that way)  but if you pay attention to certain price points, it is.  What I see right now, is a beginning indicator of better things to come.

One thing that's always very important to remember - Pricing is all relative. If your home is worth less than it was 1 year ago, remember that the house you are buying is also worth less than it was a year ago, too. If you are purchasing a higher priced home, that seller has more to lose than you do- couple that with low interest rates, and you make out pretty good!

I would be happy to analyze your current situation with your home, and give you an honest opinion as to whether it's better for you to move now, or wait a few months, or wait a year. It will not always be the same answer- everyone's situation is different. So feel free to contact me, I love sharing my knowledge and expertise when someone can benefit.

What happens if the house you want to buy does not "appraise", and you can't get a loan because of it?

The bank sends an appraiser out to a property to ensure it is worth the amount you are willing to pay. Consider it an additional unbiased  check on the value. If you require a $500,000 mortgage on a property that is deemed to only be worth $500,000, the bank may  not give you a loan (It would be considered 100% financing) The bank looks at lending  money that is secured on a property as an investment. There would be no equity in the house on that particular scenario, and in case of a default, the bank would have a hard time recouping its investment.

Three  things can happen in this instance. The seller can reduce his price to what the bank feels that its worth. The buyer can put more of a deposit down, or the buyer can walk away from the transaction, with no penalties. Incidentally, there would be no penalty for the seller, either.

Sometimes, if and when an instance like this occurs, the seller may opt to hire an independent appraiser (that is certified through the buyers bank) for another opinion. Appaisers sometimes make mistakes, too- but don't worry too much about this- it's a rare occurrence these days. Years ago, buyers were not represented by agents. All realtors worked for the seller, even if they wrote an offer for the buyer. With buyer representation, the contracted agent holds a fiduciary relationship with the buyer. Justr another good reason to hire an agent to represent you in yuor purchase

How often should your agent conduct a market analysis of your home?

The real estate market changes daily, and certain local, national or even global events can affect your market value.There could be a recent sale that strengthens or even enhances your position in the marketplace, or a recent sale that hurts your possibility of obtaining the price that you and your agent once considered appropriate.

When a bank requests an appraisal (either for a buyer or for a re-finance) the appraiser is instructed to utilize only up to 6 months of prior sales.  So an appraisal conducted last year on your home is not an appropriate analysis for today.  If you look at my market statistics reports, you'll see that  there are changes weekly, and those changes need to be addressed as they pertain to your home's value. So the short answer is AS OFTEN AS NEEDED. That could be 15 days from the time you list your home, or every 30 days that your home remains unsold.

When is it time to reduce the price of your home?

Your home has been on the market for two months. You've had some showings, but no offers. Is it time for a reduction? and how much do you reduce the price to?

You might think to yourself, "well, the market is slower right now, my home is priced fairly- it's just a matter of time and having enough buyers come to see my house. Change your mode of thinking!

I don't care what type of market we're in, if your home does not have an offer within two weeks- a month AT MOST, reduce the price. Buyers flock to a new listing- they are actively looking and any time that something new comes on the market, they will want to see that home if it fits their criteria. Your best opportunity for an offer resulting in a sale comes when your home is first listed.

After that, you just wait for new buyers to come into the market. Your biggest pool of buyers occurs when your home is first listed. The next biggest pool of buyers comes when you reduce the price, and that has to do with two things. Buyers that may have seen your home come on the market  and felt that your price was just a little rich for them and were hoping it might come down, and the buyer pool in your new price range.

As fas ar how much to reduce, here are the hard facts. You may not like it, but here it is. 27 years worth of experience has taught me this much at least. Reduce your home by a minimum of 5% for it to make any dent.

Here's why- A lot of buyers will consider offering 90% of asking price for a home, and they do not feel like it's a lowball offer,- most houses sell at an average of 95% of asking price anyway in our area. If  your house was priced "right on the money",  they would have offered something already by this time. So, reducing your price by that 5% will surely incite someone to make an offer, where you can start to negotiate. No one says that you have to give your house away, and no agent should ever push you into accepting an offer that you are not comfortable with. I know I wouldn't. Just remember,  buyers ultimately determine market value.  

What you should expect from your Real Estate Agent, and how important is it to you?

I came across a survey  a few days ago that resonated with me, and I wanted to share it with you. It's what home buyers and sellers expect from their agent, by level of importance.  I nearly fell off my chair when I read some of the numbers. EXPECT MORE FROM YOUR AGENT, PERIOD! I'll tell you a story...

Just yesterday, I received a call from a past seller client who moved out of state,  and she called me to get a referral for an agent in her area to sell her home. So I looked on the internet for  local real estate sites, I checked realtor.com to see which company was listing what, and what that company's  average listing prices were until I had found a few  that could be in the running.

As you know, I am affiliated with RE/MAX, and there was a RE/MAX office in her area, but I didn't see that to be a good match for her needs. That's rare, but it happens.  After reviewing the company websites, I found one firm that stood out to me, so I called, spoke with the Office manager, and described the type of agent that  I was looking for to assist my past client.  Well she gave me somebody alright, WHOA! The agent called me up, Ms. Gum-chomper, and a baby was crying in the background. That agent bragged about how wonderful she was, and all I could think of is that the only person she's trying to convince of how good she is, is HERSELF!

That was a BIG no-no in my book. So I called the manager and said, (in a very pleasant manner) that the agent did not seem like a good fit for my client, and could she please have someone else call me. The manager did ask why I felt that way, and I was frank- I told her that the agent sounded a bit brash, there was a baby crying in the background, and it just didn't seem professional to me.  The agent called me back to tell me that the child wasn't hers, but in fact, it was her clients, and she was out showing a client around when she called me. THREE wrong things with that picture. Out with a client and not giving full attention to that client, calling someone else in front of that client, and driving and talking with a BABY in the car. Ok, fast forward...

I got another agent that was just perfect! and for that I am happy. Now, after that long story (sorry) it leads me to this survey taken by the National Association of REALTORS (NAR). NAR recently published their annual Profile of Buyers and Sellers. In it, there was a survey about what buyers and sellers deemed important skills that their agent ought to have. The results may surprise you, depending on how you look at that figures compiled. If you look at the chart below, it represents the percentage of importance placed by the  respondents on a particular aspect of real estate.  Just to be clear, this is an excerpt, and not the entire poll, which was broken down further by marriage status and gender, although the numbers are still similar.

The numbers that surprised me most were negotiation skills, people skills, and technology skills, because as a Realtor I think that these skills are also very important.

That agent had poor people skills, evidenced  by her disrespect to her client, and for me, for that matter. She didn't have a personal website, either. That doesn't cut the mustard with me,  and it shouldn't with a buyer or seller either. I think that a lot of these skillsets mentioned should rate a lot higher, and buyers and sellers hould expect more from their agent. When  I put my name on something, it BETTER be good, period, and all agents  should set the highest standard for themselves and their clients as possible.