The local housing market reminds me of a friend who walked out of Norwalk Hospital one morning a few years back after a bout with pneumonia. His young son carried a bouquet of flowers for Dad, who was still pretty weak. A lady walking into the hospital, trying to be nice, said: “What a good boy, carrying those flowers for your grandfather.”
That’s the Wilton housing market these days. It’s recovering–but it’s not yet singing “Happy,” despite some positive news in June.
June sales were robust. Wilton single-family sales jumped 80-percent over May (38 vs. 21) and 3-percent over June a year ago. But in the first six months of 2014, Wilton sales totaled 109, down 13-percent from 2013.
The good news? The median sale price was up 2-percent. This accounted for about $108 million in volume, down 7-percent from the year before. It makes some sense that as prices rise, transactions will drop–if the market is not expanding–and that seems to be the situation.
Nearby towns paint a similar picture. Darien, Westport and Weston all increased sales in June over May, but not for the first half as a whole. In Darien, sales were down 4-percent, and volume was down 12-percent, for the first half of the year. In Westport they were off 19-percent, volume down 24-percent. In Weston, sales were down 18-percent, volume off 14-percent for the first six months against a year ago. Median prices for the year are up in Westport (plus 8-percent to $1,350,000) and Weston (plus 10-percent to $830,000) but down slightly in Darien (minus 3-percent to $1,300,000). These numbers are all from the Greater Fairfield County CMLS.
Maybe we should not think of this as “recovery” anymore. Perhaps this is just the “new normal.” Using the bubble years of 2004-2007 as a benchmark for performance just doesn’t make sense anymore. The real estate market is changed forever from the effects of the crash; and we as buyers and sellers are also changed–chastened, if you will, but changed nonetheless.
With June sales of existing homes in the Northeast rising about 3.2-percent, National Association of Realtors (NAR) chief economist Lawrence Yun said housing fundamentals were improving. Inventories are up–at their highest level in over a year, he says, and prices are not rising markedly—meaning deals remain. (He added that nationally, much more new-home construction was required. Last week the U.S. Census Bureau and Department of Housing and Urban Development set estimates for June home sales at 11.5-percent below estimates a year ago.)
Many experts see this as part of a normal, albeit plodding, comeback from the bust six years back. But housing affordability and lending is not coming back as fast as might be expected, especially among young buyers. Trulia reports that about 75-percent of adults aged 25-34 are employed, which gets us a third of the way back from what we considered “normal” before the bust. This is better than last year, but down from last quarter.
The goal in a healthy market is a balance between inventory and pool of buyers, and an overall accommodation between buyers and sellers. Sellers list their houses at what buyers consider acceptable starting points for negotiation, and the two parties have a reasonably good understanding of what to expect from the outcome, not Grand Canyon-wide chasms about price, inspection issues and closing process. We’re not there yet.
There are a number of remarkable bargains in Wilton right now, some homes priced well below assessments, but there aren’t enough buyers there to scoop them up. As one rather pessimistic commentator, mortgage analyst Lynn Effinger of Housing Wire, said, referring to our previous excuse for soft 2014 sales: “This can’t be blamed on the weather.”
Maybe this is the new normal.
Julie Carney is GMW.com’s real estate columnist. One of Wilton’s leading realtors, she heads up the Julie Carney Group at William Raveis. Her award-winning real estate career spans twelve years and sales exceeding $130 million. Her husband Bob Carney is a member of the JC Group and an award-winning journalist for 30 years. He contributes many of the columns to GMW.com.