Skolnick's Scoop / Despite Westport realty market gains, full recovery still years away
It's true, the housing market in Westport is on fire. Buyers and sellers are educated, informed and ready to make a move. But it's not all sunshine and roses from here on in.
Although I reported last month that Westport home sales increased in 2013 by 108 units -- a 28 percent increase -- and that average sale prices improved more than 8 percent, the local market has not completely recovered.
And nobody truly knows when prices will fully rebound to highs of the 2006-08 market peak. Most people who bought during that period have homes that are worth less on today's market.
But it's worth analyzing sales and volume over the last few years to get a better picture.
In 2013, 499 homes sold in Westport. Although our total volume offered a nice increase over 2012, units sold still did not reach the 2004 level of 567 units.
Average sales price in 2013 was $1,466,556 -- 11 percent below the 2008 average of $1,653,770. Total sales volume for 2013 swelled to $731,811,381, but still not trumping the all-time high of $882, 667,781 in the year 2000.
As I meet with sellers to give them a comprehensive market analysis to help them price their homes, many are surprised to hear that their properties are still worth less than they paid seven or eight years ago. The market has begun to return, but not to its highest levels.
According to Rick Judson, chairman of the National Association of Home Builders, "While we expect sales to gain strength in 2014, builders still face considerable constraints, including tight credit conditions for home buyers, and a limited supply of labor and buildable lots."
If history repeats itself, the road to a full recovery is at least 10 years long.
I began my real estate career in 1993. At that time, it was tough meeting with a homeowner who purchased a property in 1986 -- just before the fateful market drop on Black Tuesday in 1987. By 1993, prices had not rallied back to 1986 levels -- a full seven years later.
We were in a recovery, the market was booming like today, but we were all the way back. Prices peaked again in 2008. It's only a few years since the drop. Yes, we are recovering once again, but as our past tells us, the market doesn't recuperate overnight.
2014 promises to be another banner year. January has started strong but was stalled a bit by unusually harsh weather. Many buyers are eagerly anticipating increased supply. A properly priced home can expect to receive offers within the first 30 days of its listing on the Multiple Listing Service. Just as in the past, though, an overpriced home will continue to sit on the market, unsold.
"Consumers are getting used to more realistic mortgage rates, which still remain favorable on a historical basis," said NAHB Chief Economist David Crowe. "As household formations and pent-up demand continue to emerge, we anticipate that 2014 will be a strong year for housing."
Most Realtors will explain that Westport's low supply of accurately priced homes is impeding their ability to sell more homes. As the weather starts to improve, and I promise you it will, expect more properties to come on the market and for the high sales volume that we enjoyed last year to continue. Be patient. We are on the right path to recovery, we are just not completely there yet.
Linda Skolnick's "Skolnick's Scoop" appears every other Friday. She is a Realtor with Coldwell Banker Riverside in Westport and can be reached by calling 203-246-0088 or through her website, www.GoAskLinda.com.