CONNECTICUT AND THE BERKSHIRES THIRD QUARTER 2013 MARKET WATCH
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INTRODUCTION Sales flourished in the vast majority of our markets during the third quarter of 2013, with both dollar and unit volume increasing by double digits in most of our communities and price categories. This is the fourth quarter of consistent sales growth, and all metrics support a market that is in full recovery mode: • Market activity is at a five-year high • Prices are stable and median selling prices are improving • Inventory levels continue to decline In tandem with the continued strengthening of the real estate market comes the need for an educated perspective on market dynamics. More than ever buyers and sellers alike need to have a realistic understanding of what is happening, why it’s happening and what to expect going forward in order to capitalize on current market conditions. The bedroom communities of Fairfield County continue to enjoy the highest upward sales trajectory both in terms of units sold as well as median selling prices. Single family home sales along the Shoreline and in Litchfield County are also improving nicely, but the rate of change is slower than in Fairfield County because these areas are by definition smaller, more niche markets. Southern Berkshire County is notably lagging in sales volume improvement versus surrounding areas this quarter due primarily to depleted quality inventory. Reflecting the improving health of our real estate market, sales are strengthening in all price categories. Notably in the third quarter, entry level level home sales, which have been leading this recovery, are experiencing slower sales gains than the broader market. This is attributed primarily to depleted inventory levels. It is the luxury segment that is starting to turn the corner, tracking at higher than overall market sales levels. The return of the luxury buyer is a strong indicator of housing confidence. The market is being supported by a broad group of buyers motivated by pent-up demand and excellent market conditions, including low prices and favorable interest rates. Sellers are comfortable with selling in this market and realistic in their valuations. Median selling prices continue to improve, reflecting level prices and heightened sales activity in the upper price ranges. Buyers do remain price-sensitive and highly discriminating in their choice of home. The condominium market is also contributing to the gains made in the overall housing market. Sales are up substantially for this sub-market in all areas. I hope you find our Third Quarter 2013 Connecticut and the Berkshires Market Watch helpful as you evaluate your own personal real estate holdings and plans for this coming year. At William Pitt Sotheby’s International Realty, we are committed to excellence in everything that we do, and we dedicate ourselves to providing the highest level of service and expertise to buyers and sellers alike in all price categories. If we can be of service, please don’t hesitate to call. With best regards,
Paul E. Breunich President and Chief Executive Officer William Pitt • Julia B. Fee Sotheby’s International Realty +1 203.644.1470 | pbreunich@williampitt.com
CONNECTICUT & THE BERKSHIRES MARKET WATCH
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SINGLE FAMILY HOME SALES CONTINUE UPWARD TRAJECTORY Third quarter 2013 transaction volume continued to improve as a broad swath of buyers actively engaged in the market. Continuing a trend that began in the third quarter of 2012, the vast majority of our communities experienced both monthly and quarterly sales gains, often at double-digit levels. Buyers are returning to the housing market as confidence in both real estate and the general economy improves and job growth in the New York City metro area continues. The increase in mortgage interest rates during the third quarter provided an added stimulus to buyer activity, serving as a reminder that the historically low borrowing costs we have been experiencing for several years will not last forever. As has been true for some time, Fairfield County is leading the way with third quarter dollar volume up by 28% versus the same time a year ago and unit closed sales up 24%. Litchfield County dollar volume was up a strong 22%, while unit sales increased by 8%. The Shoreline sustained its steady growth pattern with activity concentrated in the low to mid-price points. Despite dollar volume declining by 6%, unit sales increased by 4%.
2629+ 28+ 27+ 37+ 52+ 4555+ 45+ 40+ 54+ 63+ 2428+ 25+ 23+ 32+ 36+ SINGLE FAMILY HOME UNDER CONTRACT SALES 2008 - 2013 (In Units) 639
553
2,679 3q13
456
3q08
1,727
1,394 1,357 1,339 1,481 3q09 3q10
3q08
3q09
546
458
3q10
3q12
3q13
3q12
402 3q11
248
3q11
3q08
FAIRFIELD COUNTY
THE SHORELINE
287
3q09
323
259
3q10
3q12
239
360
3q13
3q11
LITCHFIELD COUNTY
Consumer confidence continues to hover at its highest levels in five years. During the third quarter of 2013 we saw the Consumer Confidence Index range between 81.8 and its current 79.7 (1985=100). In tandem the Present Situation Index, which reflects how people feel about their employment and income prospects, increased further to 73.0. Improving consumer confidence is a significant factor in bringing buyers back into the housing market and particularly local buyers, who are generally discretionary buyers. Neil Dutta, head of U.S. Economics at Renaissance Macro Research LL in New York, says, “If you ask someone how things are right now, they’re all saying it’s better to an extent they haven’t seen in quite some time. The labor situation is improving and consumers have more intentions to buy major things like homes.”
Fairfield County is currently experiencing exceptional volume growth compared to its post-2009 lows, driven by its proximity to New York City, top-rated schools and charming communities as well as the flourishing Manhattan real estate market, where rising prices and depleted supply are motivating younger families to move to the suburbs. The housing market has been very strong this entire year compared to markets in recent memory, as reflected in year-to-date statistics that show that dollar volume has increased by 28% versus 2012 and unit volume is 23% higher. Under contract sales, which represent the forecasted sales pipeline, remain very strong as well, standing at 60% higher than the third quarter of 2012. With the eight-to-twelve-week lag from pending to closing, under contract sales are expected to translate to double digit fourth quarter sales increases versus the same period a CONSUMER CONFIDENCE INDEX 85 75 65 55 Jul 2012
Aug
Sep
Oct
Nov
Dec
CONNECTICUT & THE BERKSHIRES MARKET WATCH
Jan 2013
Feb
Mar
Apr
May
Jun
Jul
Aug
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Sep
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year ago. While all price segments of the market are experiencing gains compared to 2012, it is important to note that sales in the luxury segment have outperformed the remainder of the market on a percentage of improvement basis. Coming off a virtual lack of activity, the quarter-to-quarter percentage increases for sales of luxury properties are high, running between a 37% improvement and a 73% improvement in unit volume for homes priced at $3,000,000 and above. Single family home sales along the Connecticut Shoreline are staying the course with moderate unit sales increases. Year-to-date unit sales are 3% higher than they were in 2012. According to Kathy Mitchell, Manager of our Guilford and Madison brokerages, “Transaction flow in 2013 is more consistent than prior years.” The waterfront towns of Madison and Guilford continue to demonstrate the strongest sales vitality in the area and are helped by their vibrant core downtown areas. Homes that offer walkto-town living continue to be highly desirable. The upper end of the market, particularly waterfront properties and large Colonials, remains softer than normal. The one bright spot in this segment is new construction, which is showing some resilience. Single family home sales in Litchfield County continue to improve, both in terms of dollar and unit volume. Third quarter closed dollar volume was an exceptional 20% higher than the third quarter of 2012, while unit sales were 6% higher. The surge in dollar volume is the result of robust upper-end demand, which has spilled over into other price categories. There were five under contract sales above $2,000,000 this summer versus one at this price point in the third quarter of 2012. Typically the spring and fall are the strong selling seasons in Litchfield County. However, the strength of this summer’s sales activity has resulted in convincing buyer interest this fall. SINGLE FAMILY HOME UNDER CONTRACT & CLOSED SALES under contract sales
FAIRFIELD COUNTY closed sales
3q13
3q12
3q13 vs 3q12
3q13
3q12
3q13 vs 3q12
3q13 vs 3q12
3q13
1727
59%
2397
1875
28%
5,747
4,581
26%
31%
103
57
43
33%
39
44
-11%
105
91
15%
17%
119
Brookfield
80
50
60%
69
53
30%
147
110
34%
40%
84
Danbury
157
96
64%
125
89
40%
306
251
22%
32%
106
Darien
78
54
44%
108
94
15%
230
228
1%
9%
132
Easton
31
18
72%
24
23
4%
67
61
10%
8%
128
Fairfield
269
169
59%
270
186
45%
566
478
18%
23%
99
Greenwich
155
133
17%
194
186
4%
486
436
11%
-8%
79
Monroe
64
53
21%
55
42
31%
156
112
39%
37%
95
Bethel
ytd
ytd
2012
ytd
2013 vs ytd 2012
dom*
2750
fairfield county
2013
closed dollar volume
New Canaan
88
62
42%
99
80
24%
224
172
30%
19%
168%
New Fairfield
76
36
111%
51
29
76%
117
92
27%
32%
103
Newtown
127
80
59%
94
91
3%
222
216
3%
-4%
131
Norwalk
212
143
48%
173
150
15%
480
382
26%
26%
105
Oxford**
35
28
25%
46
24
92%
93
62
50%
57%
73
Redding
40
25
60%
39
26
50%
92
62
48%
34%
139
Ridgefield
128
72
78%
136
81
68%
314
211
49%
56%
106
Rowayton
12
7
71%
17
13
31%
55
49
12%
-2%
78
Shelton
129
78
65%
107
86
24%
239
208
15%
24%
89
Sherman
20
14
43%
14
14
0%
43
31
39%
59%
145
Southbury**
48
24
100%
55
43
28%
110
89
24%
39%
89
Stamford
257
171
50%
220
183
20%
540
461
17%
17%
88
Stratford
184
101
82%
131
109
20%
353
287
23%
33%
89
Trumbull
163
109
50%
146
114
28%
311
274
14%
11%
84
Weston
48
46
4%
61
45
36%
138
95
45%
57%
112
Westport
138
86
61%
149
111
34%
361
279
29%
39%
95
Wilton
86
59
46%
82
71
16%
207
169
23%
37%
128
*DOM: Median Days on Market **New Haven County
CONNECTICUT & THE BERKSHIRES MARKET WATCH
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SINGLE FAMILY HOME UNDER CONTRACT & CLOSED SALES
THE SHORELINE
under contract sales
the shoreline
Branford
3q13
3q12
639 63
closed sales
3q13 vs 3q12
2013
3q13 vs 3q12
3q13
3q13
3q12
546
17%
713
671
6%
1716
1648
4%
0%
97
40
58%
63
47
34%
149
113
32%
16%
98
ytd
ytd
2013 vs ytd 2012
dom*
3q13 vs 3q12
ytd
2012
closed dollar volume
Chester
7
9
-22%
13
12
8%
29
29
0%
11%
113
Clinton
36
39
-7%
35
49
-29%
93
107
-13%
-18%
98
Deep River
12
9
33%
10
7
43%
24
18
33%
31%
66
East Lyme
28
17
65%
32
33
-3%
74
60
23%
24%
91
Essex**
23
15
53%
17
22
-23%
48
57
-16%
-14%
155
Groton
27
20
35%
25
23
9%
70
66
6%
-9%
69
Guilford
59
54
9%
81
72
13%
193
179
8%
10%
93
Killingworth
15
19
-21%
19
23
-17%
49
50
-2%
-7%
101
Lyme, Old Lyme
31
39
-21%
30
50
-40%
92
118
-22%
-3%
108
Madison
70
55
27%
93
76
22%
201
170
18%
5%
121
New London
41
23
78%
32
21
52%
89
78
14%
14%
71
Old Saybrook
40
47
-15%
47
49
-4%
106
130
-19%
-22%
102
Stonington
29
23
26%
26
19
37%
64
52
23%
-7%
92
Waterford
52
52
0%
55
61
-10%
122
149
-18%
-24%
78
Westbrook
17
23
-26%
20
25
-20%
54
59
-9%
-12%
150
*DOM: Median Days on Market **Includes Essex, Ivoryton and Centerbrook
SINGLE FAMILY HOME UNDER CONTRACT & CLOSED SALES
LITCHFIELD COUNTY
under contract sales
litchfield county
Bantam
closed sales
3q13 vs 3q12
ytd 2012
3q13 vs 3q12
3q13
3q12
3q13 vs 3q12
3q13
3q12
360
323
12%
362
341
6%
909
805
13%
20%
140
2
0
n/a
2
4
-50%
5
6
-17%
-37%
119
ytd
2013 vs ytd 2012
dom*
3q13
ytd
2013
closed dollar volume
Barkhamsted
9
8
13%
9
6
50%
18
18
0%
-3%
75
Bethlehem
8
8
0%
8
6
33%
17
15
13%
2%
123
Bridgewater
7
4
75%
7
4
75%
7
12
-42%
-61%
247
Canaan
2
0
n/a
1
0
n/a
3
2
50%
68%
87
Colebrook
8
4
100%
5
3
67%
13
9
44%
42%
164
Cornwall**
5
8
-38%
2
8
-75%
9
15
-40%
-26%
234
Falls Village
5
2
150%
5
1
400%
11
4
175%
238%
186
Goshen
13
8
63%
17
10
70%
39
21
86%
110%
161
Harwinton
18
17
6%
17
16
6%
45
37
22%
13%
197
Kent, South Kent
8
6
33%
8
7
14%
17
16
6%
17%
136
Lakeville, Salisbury
11
14
-21%
15
11
50%
41
34
21%
46%
222
Litchfield, Milton
27
23
17%
24
21
14%
52
38
37%
36%
192
Morris
7
10
-30%
5
9
-33%
13
14
-7%
52%
307
New Milford
16
21
-24%
19
33
-42%
66
71
-7%
-11%
55
Norfolk
4
3
33%
5
2
150%
11
10
10%
-23%
269
Roxbury
7
4
75%
4
7
-43%
14
11
27%
-48%
255
Sharon
15
4
275%
18
8
125%
25
26
-4%
12%
182
Thomaston, Plymouth
33
50
-34%
38
38
0%
111
84
32%
28%
78
Torrington, Winsted
102
85
20%
98
80
20%
241
212
14%
14%
103
5
1
500%
7
0
n/a
13
8
63%
273%
144
Washington***
15
10
50%
13
14
-7%
23
21
10%
2%
95
Woodbury
10
21
-52%
11
24
-54%
45
54
-17%
-36%
195
Warren
*DOM: Median Days on Market **Includes Cornwall, West Cornwall and Cornwall Bridge ***Includes Washington, Washington Depot and New Preston
CONNECTICUT & THE BERKSHIRES MARKET WATCH
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MEDIAN SELLING PRICES GENTLY RISE The median selling price for a single family home continues to gently rise, increasing between 1% and 6% in the majority of communities this quarter versus the same time in 2012. Prices have leveled, and we believe we are on the cusp of a slight elevation in a few market segments where demand has outpaced supply for several consecutive quarters. Interestingly, the median selling price of a home in our key market areas is improving at a slower pace than the national average. This is likely due to national figures incorporating many parts of the country where values dipped by 50% or more during the financial crisis. These areas were the victims of significant investor speculation and overbuilding, factors that our market areas did not experience to the same degree. The pricing of a home will always be an art rather than a science. A property’s market value is a reflection of a number of tangible and intangible factors. The hard factors of a home include location, size, age and amenities. The soft factors include land topography, curb appeal, degree of updating, décor and the current competitive environment, among others. Turnkey properties, which include nicely decorated homes with up-to-date systems and structures, are the most highly desirable properties and command the highest prices in their range. Homes that are not in as pristine condition can languish on the market since the majority of buyers are seeking instant gratification when they make a purchase and don’t have the time for or the interest in major home improvement projects. Buyers remain exceptionally discriminating, and this is a trend that we expect will continue.
SINGLE FAMILY HOME MEDIAN SALES PRICE CHANGE: 2013 - 2010
FAIRFIELD COUNTY twelve-month median sales price
quarterly median sales price
3q13
3q12
3q11
3q10
3q13 vs 3q12
3q13
3q12
3q13 vs 3q12
$500,000
$470,000
$484,000
$505,000
6%
$449,000
$419,000
7%
Bethel
310,000
322,000
415,000
350,000
-4%
304,000
299,000
2%
Brookfield
360,000
355,000
330,000
356,000
1%
372,000
304,000
22%
Danbury
287,000
237,000
265,000
308,000
21%
256,000
239,000
7%
Darien
1,318,000
1,233,000
1,295,000
1,310,000
7%
1,324,000
1,245,000
6%
Easton
496,000
620,000
680,000
540,000
-20%
524,000
570,000
-8%
Fairfield
604,000
575,000
582,000
535,000
5%
549,000
504,000
9%
Greenwich
fairfield county
1.700,000
1,721,000
1,498,000
1,862,000
-1%
1,675,000
1,625,000
3%
Monroe
421,000
412,000
418,000
431,000
2%
352,000
372,000
-5%
New Canaan
1,413,000
1,480,000
1,810,000
1,552,000
-5%
1,375,000
1,475,000
-7%
New Fairfield
290,000
295,000
305,000
360,000
-2%
309,000
295,000
5%
Newtown
366,000
395,000
445,000
452,000
-7%
367,000
366,000
0%
Norwalk
465,000
421,000
422,000
449,000
10%
424,000
402,000
5%
Oxford*
334,000
313,000
275,000
380,000
7%
337,000
311,000
8%
Redding
518,000
602,000
568,000
647,000
-14%
472,000
534,000
-12%
Ridgefield
748,000
637,000
654,000
730,000
17%
627,000
611,000
3%
Rowayton
985,000
1,262,000
1,062,000
1,462,000
-22%
928,000
952,000
-3%
Shelton
346,000
312,000
328,000
318,000
11%
310,000
293,000
6%
Sherman
403,000
285,000
260,000
343,000
41%
363,000
401,000
-9%
Southbury*
408,000
345,000
365,000
375,000
18%
357,000
329,000
9%
Stamford
579,000
580,000
575,000
634,000
0%
545,000
530,000
3%
Stratford
234,000
198,000
222,000
242,000
18%
219,000
208,000
5%
Trumbull
365,000
341,000
375,000
380,000
7%
344,000
357,000
-4%
Weston
775,000
829,000
860,000
1,075,000
-7%
760,000
703,000
8%
1,260,000
1,130,000
1,030,000
1,225,000
12%
1,237,000
1,178,000
5%
845,000
720,000
850,000
843,000
17%
754,000
760,000
-1%
Westport Wilton *New Haven County
CONNECTICUT & THE BERKSHIRES MARKET WATCH
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Multiple bids are reported with increasing frequency in the most in-demand price segments. Typically these are properties offered at a compelling price where buyers sense exceptional value. Buyers are knowledgeable and follow inventory in their chosen market very closely. Despite the modest improvement in median selling prices, buyers remain price sensitive and value driven. Buyer caution is supported by bank appraisals that continue to come in low, keeping a lid on price appreciation. In Fairfield County, the median selling price for a single-family home for the third quarter of 2013 is $500,000. In the Shoreline the median selling price is $244,000, while in Litchfield County the current median selling price for a single family home is also $244,000. On a rolling twelve month basis we are seeing median selling prices in Fairfield County rise by 7% compared to the same quarter in 2012, while the Shoreline and Litchfield County are approximately 2% higher.
HIDDEN VALLEY ESTATE
CONNECTICUT & THE BERKSHIRES MARKET WATCH
CORNWALL, CT - MLS: L147132
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SINGLE FAMILY HOME MEDIAN SALES PRICE CHANGE
THE SHORELINE twelve-month median sales price
quarterly median sales price
3q13
3q12
3q11
3q10
3q13 vs 3q12
3q13
3q12
3q13 vs 3q12
$315,000
$313,000
$311,000
$311,000
1%
$301,000
$299,000
1%
285,000
284,000
360,000
310,000
0%
287,000
297,000
-3%
Chester
335,000
262,000
248,000
310,000
28%
325,000
251,000
29%
Clinton
240,000
275,000
262,000
256,000
-2%
260,000
266,000
-2%
Deep River
262,000
443,000
252,000
301,000
-41%
264,000
329,000
-20%
East Lyme
322,000
380,000
415,000
350,000
-15%
334,000
388,000
-14%
Essex*
438,000
345,000
329,000
355,000
27%
436,000
362,000
20%
Groton
154,000
175,000
124,000
150,000
-12%
141,000
154,000
-8%
Guilford
405,000
411,000
419,000
365,000
-2%
384,000
387,000
-1%
Killingworth
300,000
320,000
329,000
293,000
-6%
330,000
355,000
-7%
Lyme, Old Lyme
408,000
323,000
398,000
388,000
26%
368,000
341,000
8%
Madison
430,000
463,000
440,000
418,000
-7%
438,000
413,000
6%
the shoreline
Branford
New London
169,000
159,000
144,000
180,000
6%
131,000
148,000
-11%
Old Saybrook
332,000
355,000
370,000
311,000
-7%
358,000
356,000
1%
Stonington
350,000
402,000
252,000
415,000
-12%
353,000
338,000
4%
Waterford
220,000
225,000
254,000
223,000
-2%
211,000
222,000
-5%
Westbrook
345,000
320,000
259,000
395,000
8%
293,000
319,000
-8%
*Includes Essex, Ivoryton and Centerbrook
SINGLE FAMILY HOME MEDIAN SALES PRICE CHANGE
LITCHFIELD COUNTY twelve-month median sales price
quarterly median sales price
3q13
3q12
3q11
3q10
$244,000
$237,000
$245,000
222,000
278,000
no sales
Barkhamsted
209,000
235,000
Bethlehem
260,000
287,000
Bridgewater
308,000
580,000
Canaan
170,000
no sales
Colebrook
230,000
220,000
Cornwall*
577,000
443,000
Falls Village
260,000
158,000
Goshen
329,000
litchfield county
Bantam
3q13 vs 3q12
3q13
3q12
3q13 vs 3q12
$242,000
3%
$225,000
$221,000
2%
227,000
-20%
227,000
239,000
-5%
245,000
243,000
-11%
212,000
231,000
-8%
255,000
290,000
-9%
238,000
264,000
-10%
no sales
781,000
-47%
566,000
510,000
11%
125,000
197,000
n/a
260,000
386,000
-33%
224,000
233,000
5%
230,000
208,000
11%
600,000
381,000
30%
350,000
319,000
10%
no sales
325,000
65%
241,000
186,000
30%
286,000
310,000
295,000
15%
306,000
322,000
-5%
Harwinton
232,000
251,000
205,000
199,000
-8%
223,000
229,000
-3%
Kent, South Kent
283,000
250,000
335,000
976,000
13%
349,000
283,000
23%
Lakeville, Salisbury
635,000
383,000
375,000
715,000
66%
460,000
363,000
27%
Litchfield, Milton
419,000
332,000
367,000
310,000
26%
304,000
310,000
-2%
Morris
393,000
245,000
292,000
270,000
60%
317,000
238,000
33%
New Milford
243,000
263,000
269,000
245,000
-8%
266,000
246,000
8%
Norfolk
342,000
231,000
470,000
287,000
48%
282,000
648,000
-56%
Roxbury
495000
937,000
930,000
670,000
-47%
585,000
987,000
-41%
Sharon
533,000
235,000
830,000
210,000
127%
373,000
337,000
11%
Thomaston, Plymouth
180,000
160,000
160,000
165,000
12%
165,000
169,000
-2%
Torrington, Winsted
149,000
124,000
145,000
160,000
21%
140,000
135,000
5%
Warren
335,000
no sales
503,000
386,000
n/a
303,000
376,000
-19%
Washington**
475,000
393,000
575,000
525,000
21%
328,000
464,000
-29%
Woodbury
299,000
335,000
325,000
355,000
-11%
286,000
363,000
-21%
*Includes Cornwall, West Cornwall and Cornwall Bridge **Includes Washington, Washington Depot and New Preston
CONNECTICUT & THE BERKSHIRES MARKET WATCH
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CONDOMINIUMS SHARE IN MARKET GAINS The condominium market continues to stage a comeback with its third straight quarter of significant closed sales gains. In Fairfield County closed sales for the third quarter of 2013 were 31% higher than the same period a year ago, while there was an extraordinary 72% increase in under contract sales. High demand coupled with low inventory levels are anticipated to create some upward pricing pressure in the coming year. While the condominium markets are relatively small along the Shoreline and in Litchfield County, they nevertheless represent an important component of the market as well as a barometer of overall market vitality. After surging 30-40% in the second quarter of this year, sales continued their momentum in the third quarter. Along the Shoreline closed unit sales were 17% higher than the third quarter of 2012, while under contract sales were 18% higher. Year-to-date closed sales are 16% higher than the same period of 2012. In Litchfield County closed unit sales were 22% higher, while under contract sales were also 17% higher than the third quarter of 2012. For the year, closed sales are 19% higher than the same time in 2012. Inventory levels continue to drift downward as demand increases and new construction remains minimal. A shortage in the supply of quality condominiums is projected in the next few years as buyers eat up the available stock and market conditions improve. Prices remain steady to slightly rising for condominiums, giving buyers further confidence that we are at the bottom of this market cycle. The median selling price for a condominium in Fairfield County is $263,000, which represents a 10% increase compared to the same period of 2012, while along the Shoreline the median selling price is $169,000, a strong 21% improvement in selling price that is attributed to more higher-priced units being sold. In Litchfield County the median selling price is $122,000, at 9% increase compared to the third quarter of 2012. The outlook for the condominium market is positive with a growing buyer pool of first-time homebuyers and down-sizers. CONDOMINIUM CLOSED SALES AND MEDIAN SALES PRICE CHANGE closed sales
median sales price
inventory level change
days on market
3q13
3q12
3q11
3q10
3q13 vs 3q12
3q13
3q12
3q11
3q13 vs 3q12
3q13 vs 3q12
3q13
Fairfield County
694
528
488
406
31%
$263,000
$238,000
$244,000
10%
-6%
106
The Shoreline
197
168
143
120
17%
169,000
140,000
152,000
21%
3%
111
Litchfield County
61
50
38
24
22%
122,000
112,000
117,000
9%
-1%
112
HOUSING INVENTORY CONTINUES TO DECLINE The continuing reduction in inventory is a key component to our housing markets’ return to health. Despite the influx of new listings, strong demand has continued to reduce the number of units available for sale. In Fairfield County inventory levels are down by 1% this quarter, while new listings year-to-date have decreased by 2%, compared to those periods in 2012. Along the Shoreline new listings have increased by 14% compared to the third quarter of 2012. However, with the pick up in demand, inventory levels remain 4-5% lower than the same time of 2012. In Litchfield County, there has been a big jump in new listings on the market during the past two quarters in response to improving market conditions. However, the heightened sales activity has absorbed a significant portion of these homes, leaving inventory levels 3-4% lower than this time last year. Southern Berkshire County has experienced a significant uptick in new inventory this quarter, with a 15% increase in new listings compared to the third quarter of 2012, yet total inventory is down about 7% due to a combination of sales and some sellers removing their properties from the market. The “sweet spot” in the housing market continues to be the entry to mid-level markets, where demand for quality inventory is outpacing supply. The operative words here are “quality inventory.” Buyers are willing to wait for good homes that are priced right, and will not settle for less in this environment. The return of the luxury buyer to many of our towns has provided added confidence in the overall market and represents a reflection of the exceptional opportunities that exist today. The pick-up in demand coupled with the lower supply is resulting in the Month’s Supply of Inventory (MSI) falling considerably. The MSI ranges from a low of 6.4 months in Fairfield County to 9.1 months along the Shoreline and 13.1 months in Litchfield County.
CONNECTICUT & THE BERKSHIRES MARKET WATCH
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LUXURY SALES IMPROVE IN THE BERKSHIRES With strong quarter over quarter volume growth during the first two quarters of 2013, Southern Berkshire County was poised for a vibrant summer market. However, after first quarter sales that were 9% higher than the first quarter of 2012, and second quarter sales that were 11% higher than the second quarter of 2012, third quarter closed sales registered a significant 10% decrease versus the same period a year ago. According to Carolyn Fugere, Manager of our Berkshire brokerage, “Contrary to the first half of the year, this summer there were simply not as many buyers in the market as we had anticipated. Those that were in the market were highly selective and focused on upper end properties.” Contrary to the tepid broad market performance, the luxury segment was red-hot during the third quarter of 2013. Closed sales of homes valued at $1,000,000 and above were 50% higher than the third quarter of 2012. Year-to-date, 28 homes have closed at this higher price point. The challenge for the luxury segment is an ongoing depletion of quality inventory. Despite the significant growth in sales activity, 19% fewer homes were newly listed during the third quarter compared to the last quarter, resulting in a 10% decrease in available homes for sale. Buyers, many of whom have been earnestly seeking properties for some time, are quick to act on quality new market offerings, resulting in significantly lower days on market for sold homes. There are in essence two streams of inventory in Southern Berkshire County. The first stream is new inventory that comes to the market attractively priced and presented, and sells quickly. The second inventory stream includes homes that have typically been on the market for a lengthy period of time and have not adjusted their pricing for current market conditions. Buyer selectivity is resulting in these properties being passed over, indicating that they are due for a price adjustment. The median selling price during the third quarter of 2013 remained stable at $270,000. Since Southern Berkshire County is primarily a second home market, it is not a jobs-driven area. The buyer is lifestyle-driven and typically comes from the New York City metro area. These buyers are looking at homes in a number of different areas before making a decision on where to spend their weekends and summers. The advantages that Southern Berkshire County has over many second home markets include its easy access, the simplicity of life in the area, the gorgeous landscape and the myriad year-round activities. According to local agents, the Berkshire County buyer is typically seeking “a piece of the country” where life harkens to simpler times. As the New York City economy improves, Southern Berkshire County is anticipated to be the beneficiary of growing buyer wealth and confidence. It is particularly attractive to buyers who are seeking to maximize their dollars, as the Southern Berkshire County pricing structure is very attractive compared to other nearby second-home markets. WATERFRONT HOME ON ONOTA LAKE
CONNECTICUT & THE BERKSHIRES MARKET WATCH
PITTSFIELD, MA - MLS: 203274
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SINGLE FAMILY HOME UNDER CONTRACT & CLOSED SALES
BERKSHIRE COUNTY
under contract sales
closed sales
3q13
3q12
3q13 vs 3q12
3q13
3q12
3q13 vs 3q12
3q13 vs 3q12
3q13
335
298
11%
331
298
11%
796
719
11%
14%
135
s. berkshire county
122
115
-6%
128
115
-10%
280
277
1%
6%
170
ytd
2012
ytd
2013 vs ytd 2012
dom*
berkshire county
ytd
2013
closed dollar volume
Alford
4
1
300%
4
2
100%
9
3
200%
192%
178
Becket
21
12
-43%
12
17
-29%
28
32
-13%
-8%
170
Egremont
8
7
14%
3
2
50%
12
9
33%
221%
195
Gt. Barrington
13
13
0%
15
15
0%
49
42
17%
13%
280
Lee
13
13
0%
13
11
18%
29
25
16%
24%
92
Lenox
20
10
100%
21
15
40%
33
31
7%
7%
130
Monterey
4
4
0%
4
4
0%
11
7
57%
224%
156
Mt. Washington
1
1
0%
0
2
n/a
0
3
n/a
n/a
n/a
New Marlborough
0
5
n/a
0
8
n/a
0
18
n/a
n/a
n/a
Otis
6
6
0%
8
12
-33%
15
26
-42%
-66%
91
Richmond
7
5
40%
5
7
-29%
13
13
0%
-26%
209
Sandisfield
7
5
40%
7
5
40%
12
9
33%
10%
242
Sheffield
8
15
-47%
11
18
-39%
22
26
-15%
-35%
104
Stockbridge
6
11
-46%
6
8
-25%
33
23
44%
73%
233
Tyringham
0
1
n/a
0
0
0%
1
2
-50%
-29%
n/a
West Stockbridge
6
4
50%
6
2
200%
13
8
63%
78%
160
*Median Days on Market
SINGLE FAMILY HOME MEDIAN SALES PRICE CHANGE
BERKSHIRE COUNTY twelve-month median sales price
quarterly median sales price
berkshire county s. berkshire county
3q13
3q12
3q11
3q10
3q13 vs 3q12
3q13
3q12
3q13 vs 3q12
$190,000
$185,000
$183,000
$200,000
3%
$184,000
$174,000
6%
270,000
269,000
335,000
283,000
0%
279,000
276,000
1%
Alford
751,000
1,190,000
620,000
1,350,000
-37%
785,000
678,000
16%
Becket
195,000
179,000
360,000
169,000
9%
168,000
154,000
9%
Egremont
963,000
368,000
330,000
430,000
162%
495,000
329,000
50%
Gt. Barrington
421,000
217,000
340,000
271,000
94%
358,000
247,000
45%
Lee
200,000
173,000
300,000
208,000
16%
209,000
184,000
14%
Lenox
295,000
277,000
425,000
630,000
7%
270,000
290,000
-7%
Monterey
643,000
294,000
338,000
788,000
119%
496,000
418,000
19%
Mt. Washington
no sales
595,000
no sales
no sales
n/a
190,000
485,000
-61%
New Marlborough
no sales
358,000
174,000
475,000
n/a
228,000
453,000
-50%
Otis
191,000
265,000
350,000
254,000
-28%
319,000
347,000
-8%
Richmond
340,000
349,000
no sales
598,000
-3%
496,000
245,000
102%
Sandisfield
201,000
341,000
478,000
253,000
-41%
196,000
276,000
-29%
Sheffield
259,000
258,000
206,000
235,000
1%
330,000
256,000
29%
Stockbridge
415,000
318,000
400,000
397,000
31%
373,000
360,000
4%
Tyringham
no sales
no sales
no sales
570,000
n/a
860,000
425,000
102%
West Stockbridge
356,000
303,000
294000
338000
18%
344,000
324,000
6%
CONNECTICUT & THE BERKSHIRES MARKET WATCH
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WATERFRONT PROPERTY WITH DOCK
OLD SAYBROOK, CT - MLS: M9143025
WHERE WE ARE HEADED We fully expect the housing momentum to continue through the fall of 2013 as the macro factors of an improving economic and employment outlook intersect with the micro factors of reasonable home selling prices and historically low interest rates. The year-to-date double-digit sales improvement and robust pipeline of under contract units have put us on track for the best year in residential housing we have seen in the past five years. We feel confident that in many towns in 2013 we will record more single family home sales than we did in 2008, 2009, 2010, 2011 and 2012. The summer spike in mortgage interest rates added a measure of unexpected forward motion to the market. It prompted some buyers to be more aggressive in finding a new home in order to lock in rates before they increased further. Although conforming loan interest rates recently reached 4.5% for the first time in a year, after the most recent Federal Reserve meeting they eased back to 4.25%. While this may seem high compared to the 3.5% rate we became used to, mortgage interest rates in the 4% range are exceptionally low by historic averages and should be locked in if possible for the long-term. Loans that offer an option to take advantage of declining interest rates after the lock-in period are in high demand. It cannot be stated strongly enough that buyers today are highly discerning, seeking turnkey properties. We anticipate that sellers will need to carefully prepare their homes for the market for the foreseeable future. Buyers today are buying based on “current condition” versus “potential.” Today’s housing environment offers exceptional opportunities for buyers and sellers alike. Level housing prices, the depleted inventory of fresh housing and a larger buyer pool should provide sellers with the impetus to prepare their houses for sale and feel confident in putting them on the market. On the other side of the equation, this is a buyer-friendly environment where consumers are able to take advantage of the attractive combination of compelling home prices and low interest rates. Information Sources: Case-Schiller reports, Various MLS services, National Association of Realtors, Connecticut Economic Digest, local mortgage brokers, Realty Trac., CMLS, CT-MLS, NCMLS, DARMLS, Greenwich MLS, BCBOR. While information is believed true, no guaranty is made for accuracy. Cover art: *Provence, France, used with permission.
CONNECTICUT & THE BERKSHIRES MARKET WATCH
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