Buyers trending toward higher priced homes, says NAR
Updated 12:34 am, Thursday, June 12, 2014
A report by the National Association of Realtors reveals that million-dollar homes are selling at a faster pace than much lower-priced homes. That might be true across the country, but in Fairfield County the home-sale market picture is not quite as sharp.
An association report shows a 5.2 percent increase in sales nationally of homes costing more than $1 million in April compared with the same month in 2013, while sale of homes priced between $250,000 and $500,000 saw a 0.2 jump and sales declined 5.1 percent in April for homes in the $100,000 to $250,000 range compared with April 2013.
April data provided by the Greater Fairfield County Multiple Listing Service shows the region's sales were slightly depressed compared with national figures supplied by the association, with April sales lagging slightly behind April 2013. But regional home sales priced at $2 million or more, the category showed a big jump with 30 sold in April at a median price of $2.62 million, compared with 22 in April 2013 at a median price of $2.64 million.
Unlike the national statistics provided by the association, the Greater Fairfield County Multiple Listing Service in Norwalk showed a decline in home sales in the $1 million to $2 million range with 63 sold in April, compared with 77 in April 2013, but the median price of $1.41 million in April was higher than the $1.33 million in April 2013.
At the $400,000 to $600,000 level, 104 homes were sold in April at a median sale price of $475,000, compared with 107 in April of 2013 with a media price of $485,000, according to the regional MLS.
"It's not unlikely that this year's April sales were negatively impacted by the inclement weather we experienced during January and February," said Don Hull, spokesman for the regional MLS, which works closely with the NAR.
"This is another dimension of the redistribution of income. The stock market is doing well, and a large part of it accrues to the people at the higher end of the income scale," he said, while many people at the lower end of the economic scale aren't getting raises.
Some of the disparity in sales could be attributed to a restricted inventory of homes in the lower price ranges, compared with homes offered at $1 million or more, Perna said.
"Mortgage rates are still low, but terms are pretty stiff. You have to have a good credit record. That could have some affect," he said. "This is not necessarily the end of the housing recovery."
The recovery in the housing market started with homes at the lower end of the price scale when investors began making purchases to accumulate rental properties, said Danielle Hale, director of housing statistics for the National Association of Realtors, and the number of available homes at that level have been reduced.
"The high end is where we're seeing growth. Million-dollar-plus homes represent only about 2 percent of the market across the country," Hale said. "The inventory is not as constricted as in the lower end because they didn't get the (initial) inventory recovery that we saw at the lower end."
Owners of million-dollar-plus homes in the Bridgeport area are facing stiff competition, according to Susan Coyle, co-owner of Real Estate Two in Shelton.
"In Fairfield, there are 194 homes priced at $1 million or more on the market, and that's a lot of houses in one town. Many are in the Greenfield Hill area. In Westport, there are 296 houses over $1 million on the market. They're dropping their prices. High-priced homes are still hard to sell," she said, in contrast with Shelton where a half-dozen are for sale for more than $875,000. "Shelton isn't a million-dollar market."
The employment market is impacting potential homebuyers, according to Coyle, who said some are seeking two-family homes that would help them pay their mortgage.
She said two-family homes are typically priced in the $200,000 to $350,000 range, depending on location.
"Competition is fierce. Homes that are priced right are selling, but the market isn't as good as it was last year," she said. "Economists always say real estate is local."
A combination of economic factors, including a lower inventory of homes, could be blamed for the lower sales levels of homes among properties commanding lower prices in some areas, said Katherine Pancak, professor of finance and real estate at the University of Connecticut.
She said underwater mortgage problems and first-time homebuyers having trouble qualifying for mortgages, could also be contributing factors.