As CT home prices spike, buyers act fast with offers
It was a new one for Coldwell Banker agent Judy Michaelis: don't bother viewing this house without a building inspector.
Michaelis' clients, who wanted to look at a home in Westport, shelled out $1,500 to bring one along and — if they liked it — to stamp his approval on the spot.
“It worked out,” Michaelis said. “They loved what they saw.”
As New York City residents relentlessly prowl Connecticut towns for weekend homes — for a respite from COVID-19 city life, or to put urban life behind them for good — there's no shortage of real estate stories about multiple offers, snapped-up bids and efforts to sweeten deals.
There's also of plenty of stories about homes going under contract just days after hitting the market, frustrating buyers who are scrambling to cobble together an offer.
“What talks? Money talks,” said Joy Kim Metalios, managing director and associate broker of the Metalios Group/Houlihan Lawrence in Greenwich. “What's the purchase price? What are the terms? Cash is always gold. Since we're in a rising market, we're seeing a lot of ap
praisals not appraise out. So having a buyer with cash, where you're not going to have an appraisal problem, is huge.”
January house sales in Connecticut hit their highest level in 15 years, the Warren Group reported this week, with the price of the median-priced home statewide touching an alltime January peak in any year at $300,000 — up 19.4 percent from the equivalent median residence in January 2020.
In its own analysis last week, Berkshire Hathaway HomeServices New England Properties reported a 22 percent increase in the price of the median Connecticut home sold over the first two months of 2021, including stand-alone homes, condominiums and townhouses.
Metalios said that every recent transaction of hers has gone to what realtors call “best and final offer.” Most buyers are still coming from New York City; others who left California for rentals in Fairfield and Westchester County are now deciding to stay.
“Because the market is so strong for sellers, their landlords are saying, 'Oh, we're going to put our house on the market now, sorry, you have to leave.'” Metalios said. “Now they're really panicked.”
The market is putting the squeeze on buyers at all ends of the spectrum — including Heloise Nana, a Stamford mother of two, who has been getting assistance under a program for first-time buyers run by the Housing Development Fund.
The Stamford-based nonprofit's CEO Joan Carty said that Nana is one of several HDF clients getting squeezed out of homes that were within their reach until last year.
“We are acutely aware of the shrinking inventory and increased demand,” Carty stated in an email. “Some of our clients ... have been shut out.”
In addition to HDF, Nana has been working closely with a real estate agent, who forwards listings every day.
“It was expensive before for me, but right now it's
out of reach,” Nana said. “A few years ago, there were still $300,000 and
$350,000 condos or houses out there that I [could] look at, but the same house right now is at $550,000 or
$600,000.
“By the time I look at these houses, I don't even have the chance to talk with [my agent] to see the possibilities,” she continued. “She will say, 'Oh no, that house is not on the market anymore.'”
Buying sight unseen — ‘a dicey choice’
First-time home buyer Allesandra Pane spent most of the winter going to open houses in Fairfield, where she grew up.
“It was just very overwhelming [and] it's been like that ever since,” Pane said. “It's a really intense process. … It feels like a race.”
Pane's first open house was a real eye-opener. “When we got there, they were like, 'Ok, so we need final and best [offers] by 5 p.m. today,” she said. “The house had just gone on the market a couple days beforehand. It was our first time going out, and we were like, 'well, we love the house but we're not ready to make an offer that quickly.'”
As they navigate COVID-19 infection rates, low interest rates and new listings coming online each day, buyers are pouncing on listings as soon as they hit the market — putting in offers that, in many cases, sellers are reluctant to leave on the table.
Through February, over
6,650 homes sold statewide, according to Berkshire Hathaway — a 24 percent pop from a year earlier, suggesting that the pandemic market of 2020 will be sustained this year.
In the band of Fairfield County towns fronting Long Island Sound or just inland from Greenwich to Stratford, only Norwalk and Shelton have yet to generate increases of at least a third from the first two months of 2020.
But the cauldron is fast coming to a simmer there, too. This week, a modest cape perched on Devils Garden Road, at the doorstep of Norwalk's pricey Rowayton neighborhood, took only a few days to sell for $620,000 —a 25 percent
increase over what the owner paid three years earlier.
For buyers who lost out, the nearest “comp” on Witch Lane —three miles distant — was already under contract only days before, after less than two weeks on the market. That seller got every penny of the roughly $600,000 they wanted, a 40 percent premium over the price paid in 2014.
In January, Redfin described the 2021 market as among the most competitive on record, with 56 percent of montly transactions generating multiple offers on its online platform.
As buyers outbid other buyers, Redfin indicated that a significant number are dispensing with any physical tours of properties, making up their minds based on photos, virtual tours and the home inspection reports they commission if they get that far along.
“It can be a dicey choice for sellers to accept ... as [buyers] can always change their minds when they see it,” stated Peg Koellmer, an agent in the Wilton office of Berkshire Hathaway, in an email.
Coldwell Banker's Michaelis said some buyers will assume a house has some kind of issue if it goes back on the market and will relegate it to the bottom of the list.
“I almost feel the most important thing about my job right now is picking the right offer,” Michaelis said. “If you pick the wrong offer and it goes back on the market, you are no longer the belle of the ball.”
Monica Jorge, a realtor at Berkshire Hathaway in Southington, said buyers with set budgets who lose out on home bids have no choice but to start over with their searches.
“Thankfully, none of my buyers are at the point of feeling defeated ... at the moment,” Jorge stated in an email. “I did an open house last week and most buyers — especially those with [Federal Housing Authority] financing or down payment assistance — are exhausted with limited options to stay competitive. It's a huge issue.”