Hous­ing mar­ket seeks post-elec­tion bump

Sales down, but long-term trends pos­i­tive, an­a­lysts say

Stamford Advocate - - Business - By Alexan­der Soule

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.”

Peter Hviz­dak / Hearst Con­necti­cut Me­dia

Gov.-elect Ned La­mont, cen­ter, with op­po­nent Bob Ste­fanowski dur­ing a Septem­ber de­bate spon­sored by the Con­necti­cut As­so­ci­a­tion of Realtors.

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