Southern Connecticut Real Estate Market Anaylsis – February

Clients and Friends,

The following is the February 2024 Southern Connecticut Real Estate Market Analysis. In preparing this report every month, I keep myself up to date on the market economics for all Southern Connecticut. I have a financial background (MBA in finance), and I enjoy analyzing detailed financial data so I can maintain a good understanding of the market. I then use this knowledge to help my clients (both buyers and sellers) understand the market and get them the best deal possible.

Single family home sales for February 2024 in Stamford, Greenwich, Darien, New Canaan, and Norwalk were 81 units vs. 102 in January, 69 and 144 in February 2023 and 2022. The best leading indicator for future sales is homes with accepted offers/under contract. As of March 4th, homes with accepted offer/under contract were 52 which is very close to the same number at this time last year (51). In January 2024, the average selling price in Stamford declined 13% from the 4th quarter 2023 average. In February 2024, the average selling price was only 4% lower than the 4th quarter 2023. However, the selling price per square foot in February was the same as December 2023 at $310 while the average size of the sold homes was down versus Q4 2023. Inventories increased in both January and February, and as of the end of February inventories were 33% (398 vs 299) higher than December 2023. Last year (2023) January/February inventories increased by 32 homes, and by 13 homes in 2022. Therefore, the increase in inventories above the normal trend is a VERY good sign. Inventories are still very low. Typically, inventories would increase over the next 3 months, so this is a critical time period and I will be following this very closely and will report back. On an overall basis, the market continues to be a strong sellers’ market. During January and February, homes sold for 65% and 72%, respectively, above the list price in Stamford. In November and December 2023, 66% of the homes sold at, or above the list price – so this trend is not changing. For comparison, back in 2020 (the last year before the decline in inventories), only 34% of homes sold at, or above the list price.

Stamford condo sales in February were 40 units vs. 39 last month, and 29 in February 2023. In Stamford, condos with accepted offers/under contract as of March 4th were 65 versus 63 last month, and 89 in February 2023. As reported the last several months condo sales have also been severely impacted by the lack of inventory. During February, inventories decline from December, but were about the same as last month. Similar to single family homes, condo prices are holding firm. During January and February, condos sold for 65% and 60% at, or above the list price. For November and December, 68% of the condos sold at, or above the list price. It is clear that similar to single family homes, this trend is not changing. For comparison purposes, in 2020, only 23% of condos sold at, or above the list price.
Interest rates for conforming loans are around 7%. As mentioned earlier, I expect inventories to increase modestly over the next 3 months. Demand clearly remains very high, and (as I have been stating for months) I believe the lower interest rates will lead to higher selling prices UNLESS inventories increase significantly (which is doubtful). The real estate market is driven by supply and demand, and high demand with low supply means higher prices.

Clients have asked me for my thoughts on the market over the next few years. I really do not see anything that will dramatically change the current market. The most significant factor would be interest rates. If rates return to 4% or lower, this could result in more people deciding to move. Therefore, inventories would increase, but this would increase number of buyers. I expect relocations from New York City to continue to be strong as the work force continues to work part-time from home, but still needs to go into the city regularly. There are not large tracts of land available within commuting distance to NYC where new homes could be built to increase available inventory. Therefore, I expect the market to continue to be a strong sellers’ market for the foreseeable future.
As mentioned in prior newsletters, homes are selling with multiple offers. This means you must get creative to improve the quality of your offer. Sellers are placing more importance on the quality of the offer, and are looking for assurances that deals will close. Therefore, it is important to look for ways to improve of the quality of your offer OTHER THAN increasing the price you are willing to pay. Points that should be considered are:
1. 20% or more down payment – a larger down payment is attractive to a seller because it helps mitigate the risk of the home not
appraising.
2. Consider a certified pre-approved mortgage. A pre-approved mortgage has already been reviewed by the underwriter, and the only
step that needs to be done is the home appraisal. This should reduce the time significantly to have a clear-to-close for the
mortgage. Additionally, this increases the seller’s confidence the mortgage will be approved
3. Waive the appraisal contingency – if you do this, you must be prepared financially to cover an appraisal shortfall.
4. Waive the inspection – this could be risky particularly for older homes, but is certainly attractive to the seller.
5. Waive the mortgage contingency – only consider this if you either don’t need a mortgage, or you know for certain that a mortgage
will not be a problem.
6. Close at the seller’s convenience – possibly even rent the home back to the seller if they need time to find a new home.
7. Cash with no contingencies – obviously the best option for the seller.
8. If the inspection and mortgage contingencies have been waived consider giving the seller a non-refundable deposit when the sale has
been agreed to my all parties. This will give the seller funds to prepared for their move, and will show the seller that the buyer
is totally committed to the purchase.

All of these options do have a certain amount of risk, and as your agent, I will help explain all the angles and potential consequences to you.

If you have any questions regarding this report or are interested in buying and/or selling a home, please contact me anytime. If there is anyone you know who is interested in buying or selling a home, I would very much appreciate you giving them my name or sending me their email address and I will contact them.

To view the detail report please click on the below link. Additionally, if you would like detail information on any town in Connecticut let me know and I will provide it.
https://drive.google.com/file/d/1_aoV8FsUYBzIfE_67X8PWRZI_7oH7r2Z/view?usp=sharing

HOWARD DUBMAN – GRI, ABR & MBA
Century 21 Allpoints Realty
60 Long Ridge Road, Stamford, CT 06902
Cell (203) 981-7047
Email: howard@howarddubman.com Website: www.hjdubman.com