The State of the Market Second Quarter 2010
The home buyer’s credit program has come to an end. It was a good incentive program for new & current homeowners to purchase real estate. The new buyer’s home credit was for up to $8000 and you were eligible if you didn’t own a home for three years. A $6500 tax credit was available if you have owned and occupied your home for at least five consecutive years. The original deadline was, that you had to purchase another home and have a signed contract by April 30th and close by June 30th, 2010. On July 1st the house voted to extend the deadline to September 30th. Currently there is a backlog of homes that haven’t closed because the banks are bogged down with so many sales, however your original contract still had to be signed by April 30th. Based on the numbers of sales that happened this year, I would say that it had a definite impact on the local real estate market as it pushed quite a few buyers to get off the bench and make a decision to purchase a new home.
In today’s market home values have been pretty hard to set. The appraiser plays a very important role in setting the sale price. He or she has to be accountable to the lending institution and the banks are being a lot more cautious. Sometimes your home appraisal can make or break a deal. If the opinion of your home’s fair market value is below what the buyer agreed to pay then the low appraisal will throw a wrench in into the sale.
If you get word that the buyer’s appraisal came in below value, what can you do?
Don’t get discouraged; take a look at the appraisal to see if the correct comparables were used to justify the price. If that is the case then you may need to renegotiate your selling price.
You are not alone as declining values and extremely cautious appraisers are causing this issue to come up more frequently. Appraisers are not the bad guys, they are just under a lot of pressure these days as the inflated appraisals and poor lending decisions from the past are to blame for the record number of foreclosures and short sales on the market today. Nowadays, appraiser’s licenses and livelihoods are on the line when they say what a home is worth. This makes them much more critical of every property than ever before.
If you are concerned about how this will impact your deal then be clear about your numbers. Know what your bottom line is and what purchase price will and won’t work for you. Let that be your guide when you renegotiate with the buyer. If the lower value is justified by the comparables then it’s not likely to change with another buyer or another appraiser. It’s your decision to choose whether to take a price reduction and close the sale or forget about selling and stay in your home. This is a very common event that is happening in the market place at this time.
For example a low appraisal affected one of my sales last month. The seller and buyer renegotiated the price because the appraisal came in lower than the original purchase price. Happily the buyer & seller were able to resolve this quickly which resulted in a closing.
Let’s see what is happening in the market place at this time. The data was pulled from the Consolidated Multiple Listing system.
As of July 1st 2010 Norwalk is showing an increase in inventory and sales compared to last quarter. Currently there are 499 single family homes on the market and 313 condominiums for sale. In 2009 sales from the first quarter were 67 single family and 42 condos. The second quarter 2009 reports 100 single family and 53 condo sales. In the first quarter of 2010 there were 426 single family and 306 condos for sale. The first quarter in 2010 recorded sales of 96 Single family homes and 52 condos. The second quarter from April to June 30th recorded sales of 144 single family home & 62 condos.
Westport is currently showing an inventory of 392 single family homes and 32 condos on the market.
In the first quarter of 2009, 28 single family homes and 2 condos sold. In the first quarter of 2010 there was an increase in sales of single family homes to 51. Condo sales remained flat with only 2 sold in the same time period. Second quarter 2010 sales report 89 single family homes and 12 condos sold.
Wilton is currently showing an inventory of 181 single family homes and 27 condos for sale.
In the first quarter 2009, 14 single family homes and 1 condo sold. In the first quarter 2010, 22 single family homes sold and condo sales were up a bit to a total of 3.
Second quarter 2010 sales report 63 homes & 11condos sold.
April started off pretty slow but at the last minute, tax credit intoxicated buyers flooded the market scrambling to cash in before the deadline. I am happy to report that the tax credit, created momentum within the market place. There has been a pent up demand and the buyers are out right now looking for their new digs. Hopefully this momentum will continue into the rest of the year as mortgage rates and home prices are the lowest they have been in years. If you are in the position to buy a home, now is a great time to take advantage of this marketplace.
Betty Bondi
Owner/ Broker
www.BondiRealtyGroup.com
203-899-9990