William Pitt and Litchfield Hills Sotheby’s International Realty Real Estate Report
Fairfield County, Litchfield County and The Connecticut Shoreline 2009 Annual Report
2009 Annual Report | VOLUME FIVE
2009 ANNUAL REPORT
Introduction Real Estate Market Watch
O
ne year ago, we were in the midst of an unparalleled financial crisis that affected every segment of our economy. The Dow Jones
Industrial average stood at 8776, consumer confidence levels were at thirty-year historic lows, housing starts were non-existent and real
estate sales were paralyzed. Today the Dow is up 19% to 10,428, the consumer confidence index stands at 52.9 – a 14 point increase, and mortgage rates have remained in the historically low 5% range. At this time we are encouraged to report that the housing market is beginning to rebound. In Connecticut, after an extraordinarily soft first half of 2009, second half of 2009 sales were up between 14 and 30% versus one year ago, depending on the individual community. Sales activity was very strong in the entry level and is beginning to flow through to the higher price brackets. Inventory levels are dropping and prices are also beginning to stabilize.
At William Pitt and Litchfield Hills Sotheby’s International Realty we have used this past year to re-focus on our core competency: providing buyers and sellers alike with unparalleled expertise and market access. We re-evaluated and improved our marketing tools to provide sellers with the most sophisticated and effective tools possible to expose their properties to potential buyers. We purchased the strongest real estate offices in both Litchfield County and Westchester County to ensure that clients could move from one area to another seamlessly and our listed properties now receive direct support from a variety of geographic areas. We continued to successfully recruit the top performing agents in our markets. While many of our competitors were scaling back their operations we were investing our resources to ensure that all of our listings receive the strong and targeted marketing support they require and deserve. As a result, we can proudly say that William Pitt and Litchfield Hills Sotheby’s International Realty are the market leaders in every market we serve.
As we go to press we are cautiously optimistic about 2010. While these are uncertain times, the key elements for a stronger real estate market are in place. Inventory levels are declining, prices are stabilizing, mortgage rates remain low and consumer confidence is improving. In our opinion, the single largest barrier to sustained market improvement is the employment outlook. Connecticut unemployment is over 8% and the financial services sector remains tentative. While the conservatism that has resulted from this uncertainty will, we believe, keep growth at a moderated pace for the coming months, there is clearly enough momentum from the prior six months to suggest that the housing market is moving forward.
I hope you find our 2009 Annual Review helpful as you evaluate your own personal real estate holdings and plans for this coming year. If we can be of service please don’t hesitate to call.
Paul E. Breunich President and Chief Executive Officer William Pitt Sotheby’s International Realty Litchfield Hills Sotheby’s International Realty Julia B. Fee Sotheby’s International Realty
2009 ANNUAL REPORT
THE SINGLE FAMILY HOME MARKET BEGINS TO REBOUND It is an understatement to say that 2009 was a challenging
Single Family Home Closed Sales Fairfield County
year for real estate. Beginning in September 2008, and continuing into the late spring of 2009, the housing mar-
December 2007 - December 2009
ket in the United States as a whole, and Connecticut in 650
particular, was at a virtual standstill. With the full effects of
600
the global financial crisis hitting home, consumer spirits
597
500 $# Units
waiting to see how the situation would evolve. By May
621
550
sunk to a new low and buyers stood on the sidelines 2009 improved buyer confidence, coupled with the
25.0
450 400
potent combination of a historic housing stimulus pack-
350
age, reduced home prices, high inventory levels and
300 250
exceptionally low mortgage rates began to take effect
200
and lure some intrepid buyers back into the market.
150 100 Dec-07
Feb-08
Apr-08
Jun-08
Aug-08
Oct-08
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Oct-09
Dec-09
Oct-09
Dec-09
Oct-09
Dec-09
Consumer Confidence Index
Single Family Home Closed Sales The Shoreline
60 55 50 45
December 2007 - December 2009
40
210
35
25.0
200
30
190 180
20
170
Sep-08 Dec Jan-09 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$# Units
25
621 597
160 150 140 130
Consumer confidence reached its nadir in January/
120
February 2009. In March we saw the first signs of im-
100
provement in consumer sentiment and, by May, levels
80
were above the 50 mark where they have remained
60
110 90 70 50
for the second half of 2009. The rise in confidence
40 Dec-07
translated directly to the Connecticut housing market,
Feb-08
Apr-08
where the improvement in consumer attitudes trans-
Jun-08
120
ket demonstrated sustained positive momentum. With
Apr-09
Jun-09
Aug-09
25.0
621
100
half of 2009 in Fairfield County was up, on average,
597
$# Units
90 80 70
51%. For the second half of 2009 closed sales increased
60
14% in Fairfield County, 20% along the Shoreline and
50
The robust second half of the year performance miti-
Feb-09
110
very strong month over month unit sales gains, the second
17% in Litchfield County versus the same period in 2008.
Dec-08
December 2007 - December 2009
In the second half of 2009 the single family home mar-
crease was 39% and in Litchfield County sales were up
Oct-08
Single Family Home Closed Sales Litchfield County
lated positively to the spring and summer housing market.
58% from the first half of 2009. On the Shoreline the in-
Aug-08
40 30 20
gated much of the weakness in the first half of the year, and helped to contain annual sales declines.
Dec-07
Feb-08
Apr-08
Jun-08
Aug-08
Oct-08
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
2009 ANNUAL REPORT
There has been a gradual and steady decline in single family home
Single Family Closed Sales Fairfield County
inventory since levels peaked in June 2008. As of December 31st, 2009 inventory levels were 14% below last year in Fairfield County, and 10% lower in the Shoreline communities. In Litchfield County,
Closed Units
Unit Sales Change
CY 2009
CY 2009 vs CY 2008
4th QTR 2009 vs 2009 Unit Sales Change
Bethel
125
9%
95%
rise until this fall, at which point they, too, experienced a reduction.
Danbury
326
-2%
45%
181
-3%
Current inventory levels in Litchfield County are 2% below this time
Darien
85%
Easton
54
13%
43%
Fairfield
465
-11%
34%
Greenwich
331
-17%
131%
Monroe
156
16%
18%
Town
where summer is peak selling season, inventory levels continued to
last year. A combination of increased buyer activity, homes being withdrawn from the market by weary sellers, and relatively low levels of new to the market inventory are working together to create a more equalized housing picture.
New Canaan
151
-7%
150%
New Fairfield
14
75%
166%
Despite significant improvement, the Connecticut real estate market
Newtown
212
-7%
100%
remains fragile. Until recently, activity has concentrated in the entry
Norwalk Redding
441 70
6% -7%
60% 38%
level, fueled by the first time homebuyer credit and the fortunate po-
Ridgefield
222
-1%
68%
buy into the market. The trade-up market remains relatively soft,
Rowayton
50
4%
130%
effecting both the mid and luxury segments. Job worries are wide-
sition of first time homebuyers not needing to sell a home in order to
Shelton
109
10%
121%
spread, given this area’s reliance on the financial services industry, and
Stratford
106
-13%
7%
Connecticut unemployment stands at 8.2%. Only when the employ-
Stamford
489
5%
53%
ment picture brightens will housing demonstrate sustained growth in
Trumbull
276
-3%
6%
all price categories.
Westport
250
-8%
43%
Weston
92
-21%
38%
Wilton
136
-17%
13%
Single Family Closed Sales The Shoreline Town
Closed Units
Unit Sales Change
CY 2009
CY 2009 vs CY 2008
Single Family Closed Sales Litchfield County Closed Units CY 2009
Unit Sales Change CY 2009 vs CY 2008
4th QTR 2009 vs 2009 Unit Sales Change
5 35 18 6 3 14 12
150% 13% -18% 50% -25% 40% -8%
100% -22% 100% 100% -50% -20% 300%
Falls Village
2
-67%
0
Town
4th QTR 2009 vs 2009 Unit Sales Change
Bantam Barkhamsted Bethlehem Bridgewater Canaan Colebrook
138
-9%
24%
Chester
37
42%
150%
Clinton
116
-7%
38%
Essex
45
22%
Groton
89
0
80% 35%
Guilford
186
-10%
32%
Ivoryton
14
8%
300%
36
-8%
140%
-21%
83%
33
Killingworth
46
Goshen Harwinton
6%
-7%
Kent, South Kent
20
-17%
0
E.Lyme
72
18%
55%
Lakeville, Salisbury
35
-10%
43%
Lyme, Old Lyme
108
7%
50%
Litchfield, Milton
51
0
40%
Madison
181
8%
44%
Morris
9
13%
50%
New London
144
21%
11%
106
-1%
57%
10 10
-38% -52%
-38%
Old Saybrook
Norfolk Roxbury
200%
Stonington
53
13%
-21%
Sharon
17
-10%
-20%
Waterford
134
-1%
22%
Warren Washington,Washington Dept, New Preston
10 21
33% 50%
Westbrook
60
-13%
13%
Woodbury
63
100% -9% 9%
Branford
Cornwall,W. Cornwall, Cornwall Bridge
0
2009 ANNUAL REPORT
PRICES ARE BEGINNING TO STABILIZE The rapid pace of price deceleration that we experienced in
In Litchfield County, median single family home sales prices
Connecticut during 2008 is slowly moderating. In the period from
increased 2% versus the fourth quarter of 2008. While the absolute
May to July, as unit sales levels improved, the market experi-
level remained 12% lower than in 2007.
enced an upward spike in median sold prices, reflective primarily of the entry segment, which accounted for 80 – 90 % of unit sales
Improved price stability in the entry segment has resulted in a smaller
in 2009. In the luxury segment there were so few sales during 2009
spread between ask and sell. There is enough volume in this category
that pricing trends are not reliable. Instead, we must analyze
that accurate valuation is easier, providing sellers and buyers alike im-
sales that did actually occur. In those instances, value-driven
proved confidence in pricing and negotiations. The combination of
buyers were negotiating aggressively, seeking to take advan-
high inventory levels and smaller buyer pools has sustained the down-
tage of the weak market. In many cases this was reflected in
ward pricing pressure among mid and higher priced properties. With few recent comparable sold properties, it has been a challenge to ac-
sales figures, 20- 40% lower than the high’s of 2006 .
curately project market value for many properties, and buyers remain Despite improvements, most single family home prices remain de-
concerned about overpaying when they have little comparable data.
pressed versus 2007 levels. Overall, in Fairfield County prices declined 1% from the fourth quarter of 2008 and 17% from the fourth quarter
As the housing market continues to build some momentum we are
of 2007. Along the Shoreline, median home prices declined 1%
seeing the rate of decline slow substantially, and would expect pric-
from the fourth quarter of 2008 and 10% from the same period in 2007.
ing to continue to steady as the market moves into equilibrium.
Single Family Price Change 2007 - 2009 Fairfield County Town
Bethel Danbury
Median SalesPrice 4 QTR 2009
Median Sales Price 4 QTR 2008
Median Sales Price 4 QTR 2007
YOY Change 2009 vs 2008
YOY Change 2009 vs 2007
$319,000
$335,000
$415,000
-5%
-23%
266,500
322,500
325,000
-17%
-18%
Darien
1,143,500
1,415,000
1,237,500
-19%
-8%
Easton
612,500
663,500
750,000
-8%
-18%
Fairfield Greenwich
493,500
558,000
675,000
-12%
-27%
1,850,000
1,892,500
2,150,000
-2%
-12%
407,250
412,000
427,000
-12%
-5%
New Canaan
1,223,500
950,000
1,900,000
29%
-36%
Monroe
New Fairfield
494,500
330,000
240,000
50%
106%
Newtown
355,500
336,000
500,000
6%
-29%
Norwalk
421,500
458,500
537,500
-8%
-22%
Redding
610,000
492,500
622,500
24%
-2%
Ridgefield
618,500
722,500
743,500
-14%
-17%
Rowayton
1,100,000
1,112,500
1,467,000
-1%
-24%
Shelton
302,500
290,000
335,000
4%
-10%
Stratford
238,500
243,000
250,000
2%
-3%
Stamford
572,500
591,000
630,000
-3%
-9%
Trumbull
370,000
384,000
449,900
-4%
-18%
Westport
1,162,000
1,179,000
1,352,500
1%
-14%
Weston
850,000
750,000
853,000
13%
0
Wilton
783,250
709,500
881,000
10%
-11%
2009 ANNUAL REPORT
Single Family Price Change 2007 - 2009 The Shoreline Town
Median Sales Price 4 QTR 2009
Median Sales Price 4 QTR 2008
Median Sales Price 4 QTR 2007
YOY Change 2009 vs 2008
YOY Change 2009 vs 2007
Branford
$307,500
$307,500
$325,000
0
-5%
Chester
305,000
360,250
231,500
-15%
32%
Clinton
310,000
247,500
304,000
25%
2%
East Lyme
273,000
405,000
393,000
-33%
-31%
Essex
597,500
812,500
993,750
-26%
-40%
Groton
183,750
162,800
175,000
13%
5%
Guilford
349,000
399,000
397,750
-13%
-12%
Ivoryton
293,500
450,000
424,500
-35%
-31%
Killingworth
344,000
295,000
362,450
17%
-5%
Lyme, Old Lyme
380,000
454,950
480,500
-16%
-21%
12%
-36%
Madison
417,000
372,500
650,000
New London
190,000
169,750
183,000
12%
4%
Old Saybrook
310,000
375,000
350,000
-17%
-11%
Stonington
345,000
535,000
419,000
-36%
-18%
Waterford
250,400
250,400
290,000
0
-14%
Westbrook
407,500
297,500
300,000
37%
36%
Single Family Price Change 2007 - 2009 Litchfield County Town
Median Sales Price 4 QTR 2009
Median Sales Price 4 QTR 2008
Median Sales Price 4 QTR 2007
YOY Change 2009 vs 2008
YOY Change 2009 vs 2007
Barkhamsted
$239,000
$280,000
$242,000
-15%
-1%
Bethlehem
319,500
82,500
403,700
287%
-21%
Bridgewater
357,500
396,200
550,000
-10%
-35%
Canaan
95,000
253,000
200,000
-62%
-52%
Colebrook
251,250
225,000
290,000
12%
-13%
Cornwall,W. Cornwall, Cornwal Bridge
470,000
440,000
925,000
7%
-49%
Falls Village
990,000
316,000
801,000
-68%
-61%
Goshen
375,000
251,250
397,500
49%
-6%
Harwinton
185,000
275,250
300,000
-33%
-38%
Kent, South Kent
367,500
612,500
277,500
-40%
31%
Lakeville, Salisbury
340,000
530,000
700,000
-36%
-51%
Litchfield, Milton
261,250
245,000
373,188
7%
-30%
Morris
287,500
521,000
538,750
-45%
-47%
Norfolk
775,000
358,500
274,500
116%
182%
Roxbury
370,000
326,000
740,000
13%
-50%
Sharon
433,750
630,703
460,000
-28%
-6%
Warren
324,000
370,000
299,900
-12%
8%
Washington, ,Washington Depot, New Preston
475,000
321,250
297,000
48%
60%
Woodbury
332,500
465,000
404,500
-28%
-18%
2009 ANNUAL REPORT
THE LUXURY SECTOR IS BOTTOMING Both nationally and internationally, the luxury
Closed Sales By Price Point Fairfield County
housing market experienced a remarkable boom period from the late 1990’s through 2007. As the United States economy expanded, and the financial sector created an increasingly af-
PRICE TIER
Percent of 2009 MARKET
Change CY 2009 Sales vs 2008 Sales
4th Qtr 2009 Price vs 4th Qtr 2008 Prices
MSI
fluent population, the demand for luxury homes
0-$799,999
80%
45%
-2%
5.5
continued to grow. In February 2007, Scot Spald-
$800,000 - 1,499,999
13%
148%
11%
8.8
ing of the Luxury Home Council said, " The funda-
$1,500,000 - 2,999,999
5%
100%
8%
9.1
mentals are still strong for affluent buyers. They
$3,000,000 - 4,999,999
1%
-80%
5%
43
have a strong economy, strong GDP growth, low
$5,000,000 +
1%
*Unstable Percentage *Unstable Percentage
80
unemployment, and a booming stock market." As we look back, 2007 represented the peak of
Closed Sales By Price Point The Shoreline
the luxury housing market in Connecticut. At that time, salaries were still rising and record bonuses were being awarded by Wall Street firms.
Change CY 2009 Sales vs 2008 Sales
4th Qtr 2009 Price vs 4th Qtr 2008 Prices
PRICE TIER
Percent of 2009 MARKET
In September 2008, the financial crisis caused
0-$399,999
68%
15%
8%
80
a significant decline across all levels of the resi-
$400,000 - $749,999
25%
-17%
-5%
16.7
dential housing market. A market that had been
$750,000 - $1,499,999
6%
-35%
16%
41.7
$1,500,000 +
1%
-8%
8%
36.7
driven primarily by wealth created on Wall Street, whether through sizable bonuses or personal in-
MSI
vestment portfolios had trouble sustaining itself. Fairfield County and the second home market
Closed Sales By Price Point Litchfield County
in Litchfield County were especially impacted, because of the number of residents whose livelihoods were linked to the financial markets. The on going weakness in the luxury segment is a national, as well as local, trend. During 2009, luxury accounted for less than 1% of unit sales, even in markets such as Greenwich. In addition
PRICE TIER
Percent of 2009 MARKET
Change CY 2009 Sales vs 2008 Sales
4th Qtr 2009 Price vs 4th Qtr 2008 Prices
MSI
0-$499,999
89%
5%
5%
12.5
$500,000 - 999,999
8%
-28%
-2%
35
$1,000,000 - 2,499,999
3%
0
9%
67
$2,500,000+
>1%
Unstable Percentage
Unstable Percentage
17.5
to the obvious factors effecting luxury, in this
*Unstable percentage equals transaction too small to be meaningful
cycle sellers are contending with a new buyer
newed confidence and beginning to hire, and relocations are increasing. These fac-
mindset. Fiscal conservatism and discomfort with
tors, together with further stabilization of the economy, are anticipated to improve the
outward displays of wealth are new values that
upper end of the market. It is clear that there are tremendous opportunities upon which
have recently emerged. For the luxury market
to be capitalized in the luxury segment, particularly among unique one of a kind prop-
this means that there may be fewer buyers than
erties rarely offered for sale. As of early 2010 we are seeing increasing inquiries on the
in the recent past, and that the buyers will often
higher properties. We believe this is auspicious for 2010, and expect the increased foot
be evaluating any long-term investment poten-
traffic to translate positively to closed sales in the coming year.
tial of any property under consideration. At lower price points in the market we expect the entry level to remain relatively active, due to We do believe that as 2010 progresses, con-
the extension and expansion of the federal government housing stimulus package, as well as
fident, qualified buyers will begin to step in
the historically low mortgage rates. With the newly implemented incentives, which include trade-
to the market. Banks are demonstrating re-
up and repeat buyers, we would expect the spring market to include more mid-range sales.
2009 ANNUAL REPORT
CHANGING BUYER PREFERENCES In Connecticut, we have been observing that consumer attitudes and
creasingly desirable. Buyers are generally being more cautious in the
expectations are shifting so fundamentally that it will take a very long
properties they are considering in light of their families’ real needs.
time to revert to the laissez-faire attitudes that were prevalent prior to September 2008. A more conservative viewpoint is emerging that man-
As a result, there is a general feeling of entitlement among
ifests itself in fiscal conservatism. Overt displays of wealth are passe. High
buyers that often puts them at odds with sellers. Buyers’ expec-
quality construction and excellent property condition are in vogue.
tations remain very high. This is confirmed by a recent National Association of Realtors poll, which indicated that the majority
The global financial crisis was clearly a wake-up, call. There is a
of buyers today have no urgency to move. They are willing to
new appreciation for saving and living within ones means. In real
wait for the right house at the right price.
estate, this translates to buyers evaluating the purchase price of a home plus its maintenance expenses. Items now being care-
We do believe that some buyers will begin to feel a stronger
fully researched by buyers include town and association taxes,
sense of urgency as the home buyer credit expires in April and
utility and maintenance bills. The high costs of renovation, to-
mortgage rates begin to increase. With prices stabilizing and
gether with a desire to control expenses are making move-in
the media widely reporting improving market conditions, it is
condition a prerequisite among properties under consideration.
quite possible that pent-up demand will emerge into the spring marketplace.
Another attitudinal shift is that “bigger is not necessarily better”. High costs of home maintenance are making smaller homes in-
SHORT SALES AND FORECLOSURES ARE IMPORTANT No discussion of the 2009 real estate market would be complete
house. The issue for buyers with short sales is that short sales typically take a
without a word on short sales and foreclosures. In Connecticut, as
very long period from offer to close. Banks are usually slow to respond, and
in other parts of the country, distressed sales are a fact of life. We
may not even accept the short sale. Buyers lose patience with the process
have been fortunate in Connecticut to have been restrained in our
and often do not proceed, even if the sale is finally approved by the bank.
building. As a result, we are not experiencing the over supply evident in many parts of the Sunbelt; nor or we in the dire economic
Foreclosures and short sales are currently an important compo-
straits seen in the rust belt. Nevertheless, the weak economy has
nent of the Connecticut housing market. Job losses, re-setting
taken its toll locally. Short sales are, perhaps, the most relevant part of this market to most buyers and sellers. A short sale occurs when the indebtedness on a home is greater than the selling price on that property. In simple terms, the seller is trying to get the mortgage holder to agree to accept less for the house than he or she owes. With the price declines seen in the past two years short sales are increasingly prevalent in all areas of Connecticut. Short sales are often a precursor to foreclosure. If the short sale fails, the seller often cannot meet his obligations, and the bank will take over the
Connecticut Foreclosure November 2009 County
Foreclosure Rate 2
New Haven
1 in 606
Fairfield
1 in 612
Hartford
1 in 757
New London
1 in 815
Litchfield
1 in 752
Middlesex
1 in 869
Windham
1 in 572
Tolland
1 in 800
2. Total housing units based on US Census Bureau Data divided by properties receiving foreclosure filings in the month This includes all pre-foreclosure notifications. Source: Realty Trac
mortgages and price declines have created this unpleasant reality. As illustrated in the Realty Trac chart, in Fairfield County as of November 2009 one in 612 homes was in some stage of the foreclosure process. As these sellers work with banks to settle their mortgages, buyers must be cognizant of this segment of the market and its effect on pricing in the market as a whole. As we work through the current inventory of foreclosed and short sale homes’ we expect to see this segment of the market to continue to depress overall price levels in the coming year.
2009 ANNUAL REPORT
THE CONDOMINIUM MARKET IS SLOW TO RE-INVIGORATE Condominium Closed Sales Fairfield County 2009 Closed Sales Total
4920
2008 Closed Sales 5065
% Change 2009 vs 2008 -3%
4th Quarter 2009
4th Quarter 2008
1426
1005
% Change 2009 vs 2008
Inventory Level Change 2009 versus 2008
42%
-10%
Condominium Closed Sales The Shoreline
Total
2009 Closed Sales
2008 Closed Sales
% Change 2009 vs 2008
4th Quarter 2009
4th Quarter 2008
% Change 2009 vs 2008
Inventory Level Change 2009 versus 2008
503
545
-8%
144
113
27%
-7%
proved significantly in all three markets
to a higher price level for his or her pri-
Connecticut contracted further in 2009.
in the second half of 2009, and were up
mary residence. Whatever the particular
In 2009 Condominium sales in Fairfield
strongly versus the prior six months, as
circumstance, there have been few
Condominium sales in most areas of
County were down 3% as compared to
well as in the same period year-ago. As
ready, willing and able buyers, which
2008, and 8% along the Shoreline. Litchfield
in the single family home market resales
has negatively impacted sales volume
County, which has a relatively small con-
continued to dominate activity.
and prices.
dominium market, ended 2009 with a 3% sales gain versus 2008. As with all prop-
Sales remains challenged by a small
Importantly, condominium financing has
erty types, the first half of the year was
buyer pool. The traditional condominium
become difficult to obtain, particularly if
particularly soft with unit sales declines
buyer has either hopscotched over con-
the complex is not pre-approved by Fred-
of 21% in Fairfield County, 31% along the
dominiums in favor of lower priced single
die Mac or FHA. These agencies set very
Shoreline and 26% in Litchfield County
family homes, has been unable to sell his
strict condominium guidelines that are
versus the first six months of 2008. These
or her larger home to trade down to a
often difficult to meet.
declines came on the heels of prior year
condominium or, in the case of some
sales declines. Condominium sales im-
seniors, is holding on in hopes of a return
Condominium Closed Sales Litchfield County 2009 Closed Sales Total
157
2008 Closed Sales
% Change 2009 vs 2008
153
3%
4th Quarter 2009 56
4th Quarter 2008 32
% Change 2009 versus 2008 79%
Inventory Level Change 2009 versus 2008 -15%
2009 ANNUAL REPORT
Finally, the weak economy is putting
Condominium Median Price Sold Fairfield County
pressure on condominium associations. With high association fees, plus increasing dues and delinquency rates, buyers
December 2007 - December 2009
are wary of the joint responsibilities a
25.0
300
condominium association entails.
621
As the market improved in the last half of 2009, Fairfield County condominium prices ended the year
$ in Thousands
250
up 8% versus December 2008. After
597 200
150
100
dropping earlier in the year, prices 50
began to increase in the fall, versus the comparable weak period in
0
2008. Despite the stabilization, at
Dec-07
the end of 2009 prices remained
Feb-08
Apr-08
Jun-08
Aug-08
Oct-08
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Oct-09
Dec-09
Oct-09
Dec-09
Oct-09
Dec-09
Condominium Median Price Sold The Shoreline
29% lower than their peak the prior of two years. On the Shoreline, after 14-16% price declines in the first half of 2009, prices stabilized in
December 2007 - December 2009 220
moderate declines than in Fairfield
200
County. Relative to the past two
180
year peak, prices along the Shoreline are down 9%. In Litchfield County, condominium prices are
$ in Thousands
the second half, posting more
25.0
621 597
160 140 120 100
down 34% from their February 2008
80
peak.
60 40
Inventory levels continue to decline, as
20
well, helping to move the market into
0 Dec-07
Feb-08
Apr-08
equilibrium. Versus the peak in June
Jun-08
Aug-08
Oct-08
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
Condominium Median Price Sold Litchfield County
2008, December 2009 inventory levels were down 26% to an MSI (Months Supply of Inventory) of 8.5. In the Connecticut Shoreline communities inven-
December 2007 - December 2009
tory levels have also declined but the
180
slower rate of sales still means that the
160
MSI is a high 18.5 months.
140
$ in Thousands
We continue to have potential buyers
621
120 100
surveying the condominium offerings,
80
signaling that there is pent-up de-
60
mand. As the overall housing market
40
strengthens, and the flow of credit improves, we expect the condominium market to participate in the recovery.
597
20 0 Dec-07
Feb-08
Apr-08
Jun-08
Aug-08
Oct-08
Dec-08
Feb-09
Apr-09
Jun-09
Aug-09
2009 ANNUAL REPORT
Where are we Headed... Following a gloomy two year period in the housing market, the out-
With regard to prices, we expect those segments where there is a
look for 2010 is considerably brighter. All indications are that the
balance between supply and demand to show modest year over
market momentum which began in the last six months of 2009 will
year price increases. In markets and segments which have excess
continue into 2010. Home sales are increasing, the phones are
inventory there will be continued downward pricing pressure until
ringing in real estate offices and open houses are better attended.
the market achieves some sense of equilibrium. In addition, conser-
There is a pulse that is beginning to be felt in the market that sug-
vative bank appraisals will, most likely, keep prices lower.
gests real estate activity will continue to improve in 2010. The entry level is demonstrating ongoing strength and, in late 2009, we saw
2010 will, we believe, remain a buyers’ market for the most part.
early signs of improvement in the mid-range, particularly with mint
Ready, willing and able buyers will be poised to take advantage of
condition value priced properties.
optimum market conditions. If committing for the long term, these buyers will likely benefit substantially when the markets fully recover.
The biggest drag on housing demand will continue to be unemployment. Until people feel secure in their jobs we will not have a full housing
As we look forward from 2009 to 2010, we acknowledge that we are
recovery. New jobs need to be created and, for the financial services
living in uncertain times. Yet we at William Pitt and Litchfield Hills
sector, compensation expectations need to be clarified.
Sotheby’s International Realty remain confident in Connecticut’s 2010 real estate market. The strength of the third and fourth quarters of 2009
The second key to a full housing turnaround is the mortgage market.
bodes well for increasing stabilization in the coming year. We will not
Most reports indicate that rates will remain in the 5% range for a fixed
have an accurate gauge of potential market performance until the
thirty year conforming loan until mid-year. After that, rates are pro-
spring market is well underway, but indications are that the momen-
jected to increase by as much a full percentage point, which could
tum of the last half of 2009 will continue into 2010 and beyond.
dampen sales. Credit will remain tight as banks aggressively manage risk. Stringent lending practices will keep some buyers out of the market, as they won’t qualify for loans with the more stringent standards.
Information Sources: Case-Schiller reports,Various MOLDS services, National Association of Realtors, Connecticut Economic Digest, local mortgage brokers, Realty Trac. Cover art: TheYellow House R Van Gogh used with Permission.