Housing market seeks post-election bump
Sales down, but long-term trends positive, analysts say
At a Boston conference last week, an economist with the National Association of Realtors noted a weakening real estate market nationally coinciding with a “wobbly” October stock market in the final full month of the fall campaigns.
With stocks getting a Wednesday lift with election uncertainties over with, will the housing market follow suit? That is among the key questions heading into the quiet months prior to the New Year, when home sellers begin in earnest to ready listings for the spring season.
Statewide, about 220 fewer homes sold between July and September compared to a year earlier for a 2 percent drop to under 10,450, as tracked by Berkshire Hathaway HomeServices New England Properties, with data from Norwalk-based SmartMLS and other multiple listing services.
The Connecticut decline dovetailed with a national drop in sales of existing homes to the lowest level in three years, according to the National Association of Realtors, which said home affordability remains an issue even as both prices and interest rates creep upward.
Speaking in mid-September at a New Haven debate sponsored by the Connecticut Association of Realtors, Gov.-elect Ned Lamont promised his policies would result in lower property taxes. Connecticut is among the states where a new IRS cap on state and local tax deductions resulted in many homeowners paying more to the federal government this year.
“I talk to the business leaders of this state all the time and they ... tell me, ‘Look, I need a place where young people can afford to be,’ ” Lamont said during the September debate in
New Haven. “Make it a little easier for a person to buy that first home. ... I would invest in transportation (and) invest in our cities with affordability housing (and) transit-oriented development.”
First-time buyers down again
In its annual survey of homebuyers and sellers published last week, the NAR reported that 33 percent of those transactions were to first-time buyers, a slight reduction from 2017 and well below the 40 percent “historic norm” for the market.
The NAR said rising prices were likely preventing would-be buyers with lower incomes from affording a first home.
In the third quarter, Connecticut’s median single-family home sold for 4 percent more than the median property of a year ago, as tracked by Berkshire Hathaway HomeServices New England Properties using data from Norwalk-based SmartMLS and other multiple listing services. In Fairfield County, the price of the median home sold was up 2 percent to $415,000.
In the meantime, new listings were down 3 percent this year through October.
“Inventory continues to stall our state’s real estate growth with fewer properties being put on the market,” stated Candace Adams, CEO of Wallingford-based Berkshire Hathaway HomeServices New England Properties, in her firm’s study of third-quarter sales trends published in October. “Overall, it is truly a seller’s market.”
‘Getting back to 55 mph’
In a Counselors of Real Estate study published in conjunction with the NAR conference in Boston this past week, the economy and upward trending interest rates were cited as the two top concerns for the residential real estate industry heading into 2019, with political uncertainty, housing affordability and generational demographics also top of mind.
If political uncertainty is no longer on the table in Connecticut, the economy remains top of mind — with both issues now predominant nationally, as control of the U.S. House of Representatives shifts to the Democratic Party even as the U.S. economy continued to add jobs on the eve of the elections.
“We are seeing home-sale activity (at) the lowest in two years ... so compared to the recent past, it looks like a slowdown — but if one looks over a 10-year horizon, it has been a steady recovery,” said Lawrence Yun, chief economist of NAR, in an interview in early November at the Boston conference. “The market has been running at 70 miles per hour (or) 80 miles per hour; now, we’re just getting back to 55 miles per hour. It feels (like) a change.”