Red-hot housing market
A dozen bids on a single home isn’t unusual
Chase Salazar and Kara Wischer chalk it up to luck as much as anything else.
The Wisconsin couple had been hunting for a home since mid-Decem
ber. The search — virtual, at first — involved renting an Airbnb to get a firsthand look at homes in the area around Mystic.
Like many buyers hoping to enter Connecticut’s red-hot housing market, Salazar and Wischer glanced at hundreds of listings spread across the state from Waterford to Stonington, then narrowed it down to about 15 properties.
With more than 6,500 homes selling in the first two months of this year in Connecticut, the actual number of offers on any given house is unknown. But agents statewide say they are seeing extraordinary levels of activity on those “priced to sell” and otherwise offering attractive value due to location, condition and features among other considerations.
One deal fell through; Salazar and Wischer withdrew an offer after seeing inspection results. But with the mortgage documents still warm, the couple’s lender was able to plug in a new address on the spot for the newer, similarly priced home, which already had multiple offers.
Thankfully, the seller picked their offer as “best and final” and handed over the keys.
“The same day that we signed the release contract with the other house, we put an offer on the next house and it was accepted the next day,” Salazar said. “I think it was on the market for maybe three days.”
‘Kind of a bad sign’
As Wischer and Salazar settle into their new home, thousands more will spend another week on the prowl.
“It has been pretty frustrating to say the least,” stated Chris LaCava, an agent in the New Milford office of Coldwell Banker, in an email response to a query. “Many of the offers I have put in for clients on a plethora of properties should have been slam dunk, no-brainers. Instead, we get outbid, even going $75,000 over in some cases.”
Recently, LaCava was told there were 20 offers on a single home. “It’s crazy,” he said. “These buyers are well-qualified. They deserve a better fate. Until we see the number of listings increase in dramatic fashion, and supply starts to even out with demand, we will continue this pattern.”
Deb Alderson, a Berkshire Hathaway agent in Westport who is past president of the Mid-Fairfield County Association of Realtors, said she has seen nearly every recent listing turn into a bidding war.
“The buyers are extremely frustrated,” Alderson said Thursday. “They’re saying, ‘Here’s what I’m looking for. If you have anything — anybody who has this kind of house that is planning on putting it on the market — just please let me know.’”
Last year, a Weston home drew nine offers after 27 showings in three days. A couple Alderson was representing came up short with their $1.2 million offer — a third more than the asking price.
Many of this year’s listings, Alderson said, are not making it past Sunday in their first week on the market, as sellers are getting more than enough offers at above their asking price. So far this year, Weston leads Connecticut in the largest average decline in the length of time it is taking Connecticut homes to sell, compared to the first two months of 2020.
Wischer and Salazar, the couple from Wisconsin, did a door-to-door tour of open houses, but with competing bids going well beyond what they saw in the value of homes they saw.
“It’s like, if there is an open house, it’s not necessarily the best property,” Salazar said. “If it’s getting to the point that you need to have an open house, it means it didn’t sell in the first few days — which is kind of a bad sign.”
The market is particularly difficult for firsttime home-buyers who are getting assistance from the Federal Housing Authority or otherwise lacking the finances to include a big down payment with their final offer, according to Charles Scott, owner of Tri-State Realty in Bridgeport and president of the Greater Bridgeport Board of Realtors.
“I advise them now if they don’t bring their checkbook and make up their mind right then and there, they don’t have a chance,” Scott said. “More qualified buyers are coming in with conventional [financing] and a lot of money down . ... The stronger your offer is, the stronger the seller — and the seller’s agent — is going to regard it.”
Boom pockets statewide
Bridgeport led Connecticut in home sale transactions with 169 in the first two months of the year, as reported by Berkshire Hathaway, with Greenwich and New Canaan seeing the biggest increases from last year on an absolute or percentage basis respectively.
Rob Johnson, a broker in the Greenwich office of Halstead who led the state for sales volume last year on an annual list published by Real Trends, said one of his clients put in an offer this week on a house there that already had 11 in hand.
“Not all parts of town and property types are benefiting in the same way, and owners need to be very careful [regarding] initial pricing to achieve this level of interest,” Johnson stated in an email. “Owners will only receive this reaction [if] properties are priced right. If the starting price is overly optimistic — which can be defined as the market perceiving them as priced around [6 to 7 percent] where they will end up transacting — then the reaction will be very lackluster.”
Backus Real Estate is seeing about three of every four generating multiple offers before going under contract, according to Jed Backus, who owns the Hamden-based brokerage and is president of New Haven Middlesex Realtors.
Backus said one of his firm’s listings on the Bridgeport-Stratford line drew a swarm after the owner asked for less than $300,000.
“It was in really beautiful condition, newer construction, ... and it just shows how crowded the market is,” Backus said. “When you say, ‘Well, I want something ... turnkey, under $300,000 — that becomes such a rare commodity right now. Depending on where you are, you can change that number to under $600,000, and it’s the same situation — what can you find that’s movein ready?”
Deb Loban, who works in the Milford office of William Raveis Real Estate, was able to convince one of her buyers to outbid 27 others on a Stratford home — at a level that’s more than 20 percent above the asking price to go under contract.
“You can pull numbers out of the air,” said Loban, who is past president of the Greater Bridgeport Board of Realtors. “There’s no rhyme or reason to it.”