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 Mid-Year
Real Estate
Update
Eileen S. Townsend, REALTOR-Broker June, 2009 |
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Mid-Year Update: Finding Footing Beyond the Jitters
Last time I had time to put together a newsletter, there was snow on the ground and we had yet to hear a new presidential press conference. The federal stimulus plan was a mystery, consumer confidence was in the tank, and predictions for a sour year were rampant. For me, that was 10 house sales and three real estate awards ago, and I'm still working 7-day weeks to keep up with what has become as active a real estate market as I can remember - albeit totally different than past years. I'd have to say, recent news that consumer confidence is "sharply" up (link)) and that Washington predicts recovery within the year (link)only confirms what I already have learned: when faced with opportunity, people who see the light will take advantage and reap the benefits, even though the flavor may be different than expected.
From my personal perspective, 2009 is shaping up as not such a bad year for real estate. Thanks to my clients, new and old, I was recognized this winter for ranking among top performers at the leading and largest real estate firm in northern New England, taking home my company's Summit Award for 2008 (my fifth in six years), as well as a Premier Club award from the Leading Real Estate Companies of the World for top company ranking in referral business. In March, sales from Burlington to Charlotte landed me a spot as Realtor of the Month for LMSRE, and for that I thank the past clients who returned to do more business and who sent their friends to me for help. I am honored each time you remember to call me for real estate information and trust me to help you navigate uncharted waters in this most unusual economic climate. Together, we've shaken off the negative reports, bucked the trends, or, better, grasped the opportunities at hand. (And, we're not alone - breaking reports that home sales are up (link), nationally and locally, are now coming out.)
Now, to the information you need to keep a realistic perspective ...
 Eileen S. Townsend, REALTOR-Broker
Accredited Buyer Representative (ABR)
Certified Residential Specialist (CRS)
Lang * McLaughry * Spera
Office: 802-846-7861
Cell: 802-734-6937
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All Markets Are Local
Week after Week, while some lament national reports of significant, even scary, declines in home prices, others see unprecedented opportunity for buyers. The National Association of Realtors placed the national price decline at 14 percent for the first quarter of 2009; and the S&P/Case Schiller National Home Price Index reported that first quarter home prices were down 19.1 percent over the first quarter of 2008. Combine that with the predictions we heard in January at the Vermont Economic Outlook Conference that national prices would decline "an additional 20% this year," and then stabilize (Moody), and a reasonable person might expect that we've seen the drop; hit the bottom, and are commencing the "stabilization" in price that economists expect to linger.
But remember where we live and own real estate. We're in Vermont. Better, we're in the Greater Burlington Market, and Burlington almost never behaves quite like the nation as a whole, and certainly not like the 20 largest metro-markets that comprise the Case Schiller index. In Chittenden County, the average price for homes sold and closed, $282,000, is down just 4.7 percent year-over-year, year-to-date as of early May. Not too shabby, all things considered.
 As important to note is the recent sharp uptick in sales activity. (I felt it while working nights and weekends, and with the paperwork I'm now immersed in as I bring sales to late-spring closing.) In April of this year, Realtors put 151 Chittenden County homes under deposit - the most homes to enter contract in any month since May of 2008; three times as many homes as went into contract in November, December, or January; a 16 percent increase over the previous month, and 16 percent ahead of the same month (April) last year. (Chart: Spring sales are rising.) Activity during the month of May predicts a continuance of the trend. As sales increase, local housing inventory is beginning to approach balanced market levels. For the first time in a year, we're seeing that, in more and more cases, if you price it right, it will sell.
 If you are buying, the news, from federal bail-out incentives, to interest rates, to pricing, is all good. If you are selling, news is getting better ... better market time, more ready buyers, and more interest on buyers' parts in "getting" the house, rather than "just looking." If you're selling to buy, keep in mind that what goes around, comes around. If you feel you are selling at a conservative price, chances are, you also will be buying at a bargain level. (Chart: Inventory is returning to balanced market levels.) |
Where the Action Is
It's all about price.
The market up to $400,000 is "hot" - 130 of April's 151 contracts were on homes priced $400,000 or under, up more than 33 percent over the month before. Closed sales in this price bracket doubled month over month between February and March. And the pace picked up in April and so far in May. (Chart: Sales up to $400,000 are "hot.") The gap between list prices and sales prices is small in this price range - hovering between 96 and 99 percent for all of the past year. In many cases, competition among buyers is as hot as at the market peak on 2004-2005, when inventory was at its lowest, and prices at their highest ever. I've seen it first-hand - fully half of the negotiations I've entered since December, both as listing and buyer's agent, have involved multiple offers on properties priced from $185,000 to $425,000. The closer in to downtown Burlington, it seems, the fiercer the competition. If this is your price-range, be prepared.
For buyers, the more ready you are - pre-approved, prior home under deposit and past inspection, ready to move, and clear on your financial and timing goals, the stronger your negotiating position. For sellers, keep in mind, the homes that attract this kind of action are those that show "best in class:" the cleanest, best maintained home in the neighborhood or price category, the house that "shines." There are exceptions - or, at least, strategies, for homes (or people) that don't quite fit that description, but tactics revolve largely around price. An example: I did have one distressed listing, where due to circumstances beyond anyone's control, deferred maintenance presented a serious problem, and initially sent buyers packing. A price adjustment made the house a clear value, and next thing you know, multiple buyers emerged who were willing to shape the house up at the new price. |
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Fast Moves in a Slow(er) Market
 It's an interesting paradox. The $400,000 and under market is moving fast. Even though the cumulative number of sales in all price categories remains down year over year. In nearly all cases, though, the homes that are selling are doing so in less than three months. The average time on the market for not-yet-sold listings is as long as nine months. (Chart: TIme on market is short and list to sales ratio is tight for homes up to $400,000.) From a supply/demand perspective, overall, Chittenden County had about nine months of inventory last month, although just seven months in the under $400,000 price range. If the current pace of sales keeps up, inventory would drop even more. Long story short: in active price categories, a well maintained home, priced right, sells quickly. Homes needing work or priced above today's market are lingering. Don't take it from me ... the truth lies in the statistics.
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Working Hard for the Money
Executive Homes
Chittenden County's "executive" price range continues to face challenges. The good news is, with still-awesome interest rates available and sales picking up in lower categories, putting move-up buyers back in the market, we are seeing more sales at $400,000 - $800,000 this spring than we did in the fall and winter. In fact, April's pendings in this price category beat April of last year's -- 21 pendings in 2009 compared with 19 in April of 2008. (Chart: Trickle-up in executive sales should follow sales uptick at lower prices.) Most sales are occurring at the lower half of this price spectrum, with an average asking price of $535,000 and average sold prices in the high 400s and low 500s. But we have seen larger gaps between prices asked and offered than in lower price ranges, and we have waited longer for many of these homes to sell. Average market time in this category is about 160 days (over five months) for houses that have sold, and inventory absorption (the amount of time it would take for current listings to be purchased if nothing new came on the market), still exceeds a year and a half. We do expect a "trickle up" effect to bring more move-up buyers to the ready-to-buy stage as sales increase in lower price ranges. I'll have my eye on the numbers for the hints that this trend continues. | |
Are you New Here, or Heading to a New City?
Those of you who know me know that I left my career in journalism and marketing to practice real estate after having completed six corporate relocations with my family - moving coast to coast and back again, from my roots in Washington D.C. to "starting over" in markets as distant and different as Marin County, California and Des Moines, Iowa before landing here in Vermont. I know what it feels like -- and I "get" what it takes -- to put the  puzzle back together, to find your place in a new community, and to create a new home and household, with all the details and entanglements that entails. That's why I was thrilled to find a "First 30 Days" guide for getting settled in a new city, while paging through magazines on a flight to visit distant friends and relatives. I'd like to share it, especially with my new clients just here or soon arriving from Seattle, Detroit, Connecticut, and North Carolina.
First 30 Day Guide to Moving
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First Time Buyers:
More Good News, Even Sooner?
First-time buyers who have not yet closed on their purchases now have a chance to use the $8,000 federal tax credit to actually buy the house, rather than waiting to claim the credit when they file tax returns next year. Following actions in a handful of states to make the funds available sooner, the US Department of Housing and Urban Development (HUD) and the Federal Housing Adminsitration (FHA) have announced a program through which buyers can apply to use their credit to cover down payment and/or closing costs on a qualifying home purchase. Your mortgage lender should be able to provide guidelines on whether you qualify and how to apply. If you need help connecting with a lender, call me for a referral. For more information: http://www.hud.gov/news/release.cfm?content=pr09-072.cfm
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 Where in the World are Our Listings?
From YouTube to Craig's List - even Walmart.com - wherever someone is shopping for a home, they can find our listings. Here's a glimpse of more than 200 internet sites where your home is advertised when you list with LMSRE. It's one more way (er, 200 more ways) Vermont's leading real estate brand places you ahead of the curve in changing times.
Call me, email me, TXT me, or Facebook me to ask for details about how we bring buyers to your door-- or anything about real estate in Vermont -- and I'll get you the information you need.
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Here's to optimism that economic recovery is firmly taking root. If you would like more specific information about the market in your town, your neighborhood, or your specific price range, please don't hesitate to phone or email me to request it. Or, connect with me on Facebook or Linked In, where I periodically post updates or articles of interest.
I look forward to helping make your real estate dreams come true, whatever the economic tide, whenever you choose or need to make a move.
Sincerely, 
Eileen S. Townsend, REALTOR-Broker
Accredited Buyer Representative (ABR)
Certified Residential Specialist (CRS)
Lang * McLaughry * Spera Office: 802-846-7861  Cell: 802-734-6937
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