Realty Experts Upbeat About Real Estate Market

By Nancy K. Crevier

A small but attentive group braved the chilly, rainy weather, Tuesday evening, May 5, to gather in the meeting room of the C.H. Booth Library for a presentation by local Coldwell Banker agents and other real estate experts. “Navigating Today’s Real Estate Market” covered the topics of current market conditions, home staging for quick sale, understanding home inspections, appraisals, and home warranties, and today’s mortgage market.

Some audience members were there out of curiosity about the trends in Newtown’s real estate market. Others attended to pick up pointers on buying and selling in what appears to be a tricky housing market.

“A lot of people have never seen a market like this that has affected the economy,” said Karen Alpi, manager of the Newtown Coldwell Banker office. The program was intended, she said, to introduce the community to trends of what’s happening, and added, “It’s not all bad.”

Coldwell Banker agent Lincoln Sander elaborated on Ms Alpi’s comment, noting that while areas like Florida have seen prices dip 28 percent this year, “The fact is, the Northeast is down about the least of all areas in the country.” Understanding the statistics is important to defray the “noise” about the real estate market, said Mr Sander, and it is important for consumers to know that the Case Schiller Index, which measures where prices are, is based on just 20 big metro circles. The dip in prices of homes in Newtown, said Mr Sander, is due to a lack of buyers and a large inventory of houses on the market.

The Coldwell Banker office is seeing activity pick up now, though, said Ms Alpi, with homes in the lower price scale selling better, due to the influx of first-time buyers able to qualify.

A package of literature distributed to audience members showed that Coldwell Banker sold listings vs active inventory did not fluctuate greatly in the past two years. Outside of the spring and summer months of 2007, when the number of sold units spiked somewhat, and a low period this past winter with virtually no sold units, the numbers appear to be fairly consistent. In March 2007, out of an active inventory of 358 single-family units, 32 of the listings were sold. A year later, 17 out of 255 active inventory sold, and in March 2009, the Coldwell Banker spread sheet shows 24 sold listings out of an active inventory of 281.

The sold median price of properties as of the last day in March of this year, at $525,000, was actually higher than that listed for April 2007, when the median price was $438,000, although the average price was similar.

Although by the end of March 2009 a single-family home spent 143 days on market before selling, nearly double the number of days in October and November 2008, that is still fewer than January 2008, when homes lingered 176 days on the market.

Making A First Impression

The information does indicate a dip in the listing price vs the selling price from previous years, particularly toward the end of 2008 and the early part of 2009, falling from mid to low 90 percent to mid to high 80s.

Addressing the concerns of audience members preparing to sell a home, Coldwell Banker agent and president of the Newtown Board of Realtors Chris Fairchild and agent Kathy Suhoza emphasized the importance of home staging in a tight market. “Now, you have to do everything that you can to appeal to the few buyers out there,” said Ms Fairchild. A first impression is made in only 15 seconds from the time a potential buyer pulls in the driveway, said Ms Suhoza.

“Think about what entices you to buy a home. Look at your home through a buyer’s eyes,” said Ms Suhoza, stressing the need for a house on the market to not only look, but smell, clean; to be bright and spacious; to have updated appliances and fixtures; to appear fresh and impersonal; and to be clutter free, indoors and out.

“Even a little thing like replacing knobs with something more modern, and making sure the woodwork is all clean and freshly painted, can make a big difference to a buyer,” said Ms Fairchild.

Building inspector John Koch of Home Quest Home Inspections built on Ms Suhoza’s comment that the time to do repairs is before presenting a home for sale.

The role of a building inspector, explained Mr Koch, is to look beyond the cosmetics of the house to the condition of the electrical and plumbing systems, furnace and water heater reliability, and even the state of a deck and other construction. “An inspector looks at things that could be health or safety issues that would affect a family moving into a home,” said Mr Koch. Usually it is the buyer who hires a building inspector, but agent Joan Salbu and Mr Koch both suggested that it would not be unwise for the seller to consider having a home inspection done prior to marketing the home. “You want the least amount of issues when you have a buyer,” said Ms Salbu, and added that there is nothing to be feared from the results of a home inspection. “Never be afraid of issues. Everything can be fixed,” she assured the crowd.

The age and size of a home dictates the cost of a building inspection, said Mr Koch, and differences in construction demand different criteria to properly assess the building.

The one caution issued by Mr Koch was that buyers and sellers make sure that the inspector hired is licensed in Connecticut.

Peace Of Mind

Another way to gain a little extra peace of mind, said Coldwell Banker agents Lee Boyle and Marie Fodor, is to consider purchasing a home warranty. “It benefits both ends,” said Ms Fodor. “Buyers have a guarantee that things will work for a period of time, and houses with a warranty sell more quickly,” she said.

“The number one question I get,” said Kim Mraz, senior loan officer with New England Moves, “is if it is true that lenders are not lending. It’s not true.”

Guidelines, however, have tightened with lenders demanding verification of buyers’ ability to pay back the loan. Lenders are looking at income and employment; savings; credit and credit history — “Incredibly important,” emphasized Ms Mraz — and the monthly debt load. “Lenders want a debt ratio of 42 to 45 percent maximum, based on your debt to income,” Ms Mraz said. For a conventional loan, lenders want to see a credit score of 660 or above, and a down payment of ten percent, with five percent coming from the buyer’s own funds.

There are many programs in place, though, she said, to help first-time buyers and buyers with a less than perfect credit rating. “What lenders are doing today is looking at the overall profile of the buyer to see what is best for them. Mortgage money is available for qualified buyers,” she said.

Michael Magyar of MCM Appraisals clarified the appraisal process. First and foremost, said Mr Magyar, an appraiser looks at the location and condition of the property. The upkeep of mechanicals, view amenities, square footage, lot size, and extras such as pools or sheds are taken into consideration. What is important when updating a property, said Mr Magyar, is being aware of surroundings. “Don’t overimprove. Look at what the area warrants, because you will not get back dollar for dollar what you put into a home,” he said.

Each property is usually assessed against three comparables within a mile of the home, Mr Magyar said, although in an inactive market, the appraiser may have to go much further out to find a comparable. “At the end of the day,” said Mr Magyar, even though the lender values his input, “it’s just my opinion. It’s up to the lender.”

Buyers should not overlook the wealth of information about a property that can be gathered from town hall, said Ms Suhoza as the evening wrapped up. Every town should have information on every property in its borders, in every department. Starting with the assessor’s office, a buyer can track down the history or uncover any concerns about a house through the information stored there.

Following the program, Marie Fodor answered the question as to why, if the market is “not so bad,” house after house after house in Newtown remains on the market, with “For Sale” signs remaining posted on the properties for weeks on end.

“It is not a bad market,” she said. “There is mortgage money out there. The problem is that we have a huge inventory of houses right now and not enough buyers. There is a ‘fear factor’ that must be overcome. With what has happened to people’s 401k plans, job and wage cuts, people are a little uncomfortable about making a move right now. They wonder if they should wait and see if the economy improves, and if prices will go down even further,” said Ms Fodor. If the “fear factor” can be overcome, said Ms Fodor, the real estate market in Newtown can be a positive experience.