The Real Deal / Price uptick signals hope, not full recovery of Westport market
Updated 2:40 pm, Thursday, January 24, 2013
I am pleased to report the first promising news about Westport real estate since the beginning of the market decline that we've experienced for the past several years. The net effect of that downturn was a 20 to 25 percent loss in local home values since the market peaked in 2007.
In 2012, the average single-family home in Westport sold for $1,401,041 -- up 5 percent from 2011. This is based on 361 transactions, up from 344 in 2011. Condominium and land prices were up as well.
Buyer hesitation mostly disappeared in 2012, as those previously on the fence became convinced that our market had reached bottom. Seller resistance to lower home values also softened somewhat last year, helping to resolve the frustrating buyer-seller standoff which had been commonplace since 2008. For agents, deals seemed to come together a bit more easily than in the recent past. All in all, there seemed to be a greater sense of resolve last year, as if a new equilibrium had been reached in the local housing market.
I report 2012's increase optimistically, yet with a concern that it may cause false hope among the majority of potential home sellers who are still in denial about the reduced value of their properties. Let us remember that the modest increase in 2012 values is off a significantly reduced base. For example, a theoretical Westport home valued at $1 million at the market's peak declined 22.5 percent to $775,000 in the downturn. Even with last year's uptick, it's still only worth $813,750 today -- 19 percent less than at the peak.
Further, as I worked the market in 2012 it didn't feel much different to me than it did the year before. I still tell my clients that the market is essentially flat -- and, based on many negotiations during 2012 -- that's how most of my deals ended up.
Finally, it's important to keep in mind industry experts' predictions that the Westport housing market will likely be relatively unchanged for the next two to four years. These predictions are based not only on economic factors but also on demographic trends, which suggest the supply of homes for sale will continue to exceed demand for them in the short-term future.
So let's enjoy this glimpse of recovery in the Westport real estate market. But let's not go overboard in how we interpret it until statistics support a further rise in values. The market is still not what it was back in 2007. Those sellers who put too much stock in 2012's increase will be stuck with homes that they cannot sell.
Evi Coghlan's "The Real Deal" appears every other Friday. She is a licensed real estate agent with the Riverside Avenue office of Coldwell Banker and a former marketing consultant to Fortune 100 companies. She may be reached at 203-247-6691, by emailing her at firstname.lastname@example.org or visiting www.evicoghlan.com.