Southern CT Real Estate Market Analysis – January

The following is the January 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 January 2024 in Stamford, Greenwich, Darien, New Canaan, and Norwalk were 102 units vs. 155 in December 2023, 115 and 179 in January 2023 and 2022. The best leading indicator for future sales is homes with accepted offers/under contract. As of January 5th, this leading indicator was 50, which is lower than last month (56), and a little lower than January 2023 (57). January is a tough month analyze trend changes as activity is pretty limited. In Stamford the average selling price did decline about 13% from the 4th quarter average. However, the average size of the homes that sold was down, and the selling price per square foot was down modestly ($292 vs. $310). To me the most important change that occurred in January was that inventories were up 42 homes vs. December. Last year (2023) inventories increase by 10 homes, and in both 2022 and 2021 inventories declined. Therefore, the increase in inventories above the normal trend is a very good sign. Inventories still are very low, but I am hopeful they will continue to increase. Overall, pricing continues to remain firm due to the lack of inventory and high demand. In January 65% of the homes sold in Stamford was above the list price. For November and December, 66% of the homes sold at, or above the list price –so this trend is not changing. 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 January were 39 units vs. 44 last month, and 47 in December 2022. In Stamford, condos with accepted offers/under contract as of January 5th were 63 versus 75 last month, and 71 in January 2023. As reported the last several months, condo sales have also been impacted by the lack of inventory. During the month of January inventories decline from December, but were modestly higher than January 2023 and 2022. Similar to single family homes, condo prices are holding pretty firm. In January 65% of the condos sold were at, or above the list price. For November and December, 68% of the condos sold at, or above the list price – 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 mortgages have declined, and the projections that I have seen are showing interest rates (at best) in the low 6% range throughout 2024. I believe inventories will increase very modestly over the next few months. Demand continues to be high, and as I have been stating for months, I think the lower interest rates will lead to higher selling prices unless inventories increase significantly (which I doubt will happen). The real estate market is driven by supply and demand, and high demand with low supply means higher prices.

As mentioned in prior newsletters homes are selling with multiple offers, which 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.

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:
https://drive.google.com/file/d/1Pp9YiNAsOlBywsCWQ8pi0sT5l5etT4n-/view?usp=sharing