Newtown Board Of Realtors President Sees Sellers’ Boom Continuing
As an agent herself, Board of Realtors President Cyndy DaSilva is experiencing the same thing as most of her colleagues here in Newtown, around Connecticut, and across the nation.
She told The Newtown Bee in late May that low inventory is prompting lightning fast listing turnover (if homes even make it to the MLS before being snapped up), up-bidding on scant available properties — often over the asking price — and potential buyers who do not have all their ducks lined up being squeezed out of the market.
As its current president, DaSilva oversees the nonprofit professional partnership of Realtors in Newtown, working together for the betterment of its members to service and perform the highest professional level of real estate business for the Newtown community and the state of Connecticut, according to the organization’s website. It is an organization that Newtown Realtors use as a primary source of information, rules, regulations, and guidelines pertaining to real estate at the national, state, and local Newtown level.
The Newtown Board of Realtors is pledged to abide by the strict Realtor Code of Ethics. The group works to analyze and challenge pending and proposed local, state, and national legislation affecting home ownership. And to keep the Newtown Board of Realtors at the cutting edge of current real estate rules, regulations, technology, and safety, the board sponsors yearly continuing educational seminars and classes for its members.
As of June 2, DaSilva said Newtown had 49 single family and condos listed, 67 properties that have an accepted offer but are completing due diligence, and 67 on deposit.
In the first quarter of 2020, 82 homes were sold. They were on the market an average of 123 days and sold for an average of 97% of their asking price — an average of $365,330. In the first quarter of 2021, Newtown Realtors saw 111 homes sold; the average days on the market were down to 71, and the average selling price was 100% of the listing price or more, at an average of $481,422 — a roughly 30% increase year over year.
Here is what DaSilva had to say when she sat down to discuss the current and anticipated near future of the local/regional real estate market:
The Newtown Bee: What are a couple of the most important thing sellers need to know about the current market?
Cyndy DaSilva: We’ve been in a bad market for over 14 years, and what we’re seeing today started in 2019. People think it’s COVID-driven, but it really isn’t. We saw the signs of it in 2019 with increasing activity — prices weren’t necessarily going up then, but we’re seeing that now. So it’s an excellent time to sell, and I’m seeing a lot of potential sellers getting really excited about the market. So to them I’m saying, ‘Take a breath for a minute; if you sell, where are you going?’ — I think that’s why we have such low inventory. People are seeing they can sell, often for a very high price, but where are they going to go? Especially if they want to stay local. If you really want to take advantage of this market, make sure your next steps make sense financially and emotionally. Don’t just get caught up in the frenzy because you can get a lot of money for your home right now.
The Newtown Bee: So how are your smart sellers reacting and navigating the potential pitfalls of listing right now?
DaSilva: People are putting a plan in place first. We have buyers putting seven, eight, nine offers in on things right now. We haven’t seen this kind of market for awhile, so real estate professionals new to the business are almost [finding it] too difficult, especially if you’re representing buyers. They’re taking them from house to house to house, and they’re getting outbid. Working with sellers, on the other hand, is wonderful.
The Newtown Bee: Considering that a winning offer could be generated almost immediately upon a listing going public, with a number that is measurably over the listing price, how are you working with and coaching potential buyers so they can be successful?
DaSilva: Buyers have to work smart. It’s not just about offering the highest price, it’s about being flexible on other terms of the deal as well. So if you’re willing to not have a mortgage contingency, if you’re willing to not have an inspection contingency, things like that could put you ahead of somebody just willing to offer a higher price. Sellers are looking at those terms also, and it’s a very scary thing. Nobody makes an offer without mortgage pre-approval, but we still have issues with it because we have to wait for the banks to perform, and we need the appraisal. That is a big issue right now, because prices are going up so fast. We’re 30% over what we were last year in the first quarter. So the comps being used to establish value are lower priced — that’s leaving the appraisers really struggling. So any contingency you can remove from your offer makes you a stronger buyer.
The Newtown Bee: What does removing those contingencies mean for the buyer, and can the buyer insulate themselves from the downside of removing those contingencies?
DaSilva: If they can establish a relationship with their mortgage company or bank, and have most of the process completely done; if they are putting down more money, a lot of times banks might say they’ll work with you a little on the appraisal if it’s not exactly at the selling price. If we’re $5,000 off and you’re putting 20% down, we’ll work with you. If the buyer can establish that, and be down the road quite a bit before they’re making an offer that will make a big difference.
The Newtown Bee: What about with inspections?
DaSilva: As far as the inspection, that’s getting very sticky for people. We’ve actually talked with agents we’re mentoring in my office, instead of having just a standard inspection contingency, that the potential buyer will state they will inspect for information only. At least that way if you find crumbling foundation, a shot septic system, or some other issue that is going to run you $30,000 or $40,000 to make right, that buyer can walk away. The buyer is just looking to see if there is something they can’t handle so they can walk away.
The Newtown Bee: Can risks to the buyer be mitigated in any way by contracting a home warranty?
DaSilva: A home warranty is not normally going to cover big ticket items like a septic system replacement or foundation repair, or a new roof. You can get riders for certain things. It can really give the buyer a sense of comfort as far as things a warranty can replace — appliances, HVAC systems, things like that — but it won’t help with those big ticket repairs.
The Newtown Bee: So it sounds like the current market situation is really leaving a lot of buyers trusting to luck.
Da Silva: That’s why, if I was representing a buyer, I’d advise them to inform the seller that they aren’t going to ask them for anything, but if they find something in the inspection they can’t handle, they can have the opportunity to walk away from the deal.
The Newtown Bee: How long do you see this current market situation lasting?
DaSilva: That’s the big question, isn’t it? It’s definitely a cycle, but how long could it last? We never thought we’d be in a 14 year down market. I was looking at some economic forecasts last night and it appears the trend will continue — we may not be in this current frenzy mode, but it should continue.
The Newtown Bee: Does that mean we’re going to be seeing an explosion in new home building to make up for the lack of pre-owned inventory?
DaSilva: We had virtually no building for years in Newtown, but now we’re seeing new subdivisions going in, new roads being built, builders locating lots and building on them — the issue right now is that all the materials have gone up quite a bit, and the premiums people are paying for new construction is crazy. But they’re doing it.
The Newtown Bee: So given the limited inventory, building new or buying new can still be an advantage, even with crazy premiums?
DaSilva: Yes, people still like the appeal of new construction. That’s why builders are willing to do it — they’ve been waiting to do it.
The Newtown Bee: What does this all mean for the lease and rental market locally?
DaSilva: Even when you’re working with buyers and sellers, people are looking for interim housing. Or a seller may decide to sell now and decide to rent a few years. However, rentals have always been strong around Newtown, and if anything, that market is getting stronger now. People are really looking for them, and that comes with a premium.
The Newtown Bee: Does than mean builders are answering the call here locally?
DaSilva: Yes, we’re seeing that new project in Sandy Hook, Covered Bridge in Hawleyville, some condos that are being rented, but the thing we’re missing here is short-term rentals. If somebody needs something for three or four months, we really don’t have anything like that around here, and none on the horizon in Newtown.
The Newtown Bee: So in closing, are you expecting more former commercial or institutional-to-residential conversions like what is being talked about at Fairfield Hills coming onto your radar?
DaSilva: I think so. If it’s done well, and is kept in character with the town. It absolutely has potential.
For more information, for referrals, or to learn more about a possible career in real estate, contact the Newtown Board of Realtors at 203-319-0247, e-mail firstname.lastname@example.org, or visit https://newtownboardrealtors.com.
Associate Editor John Voket can be reached at email@example.com.