Home Sales In Newtown Rise Above National Average

By Nancy K. Crevier

The National Association of Realtors (NAR) announced August 24 that July 2010 sales had dropped significantly, with existing home sales of single-family, townhouses, co-ops, and condominiums 25.5 percent lower than sales one year ago, nationwide. Existing sales are transactions of units that are completed.

In the Northeast, those sales took a further battering, dropping 29.5 percent in July, or 30.3 percent lower than July of 2009.

Pending sales also suffered in July, falling to 18.6 percent below June of 2009 nationally, and 25.4 percent lower in the Northeast in that time period.

What may have contributed to the fall-off in sales was the expiration of the $8,000 first-time buyer and $6,500 move-up tax credit, in July, according to the NAR. Until the beginning of July, buyers had until April 30 to procure a signed sales contract, and only until June 30 to complete that transaction. On July 2, however, President Barack Obama signed an extension of three months in order to qualify for the tax incentive for buyers with a binding contract in place as of April 30, due to delays from heavy volume and slower loan underwriting processes that buyers found themselves up against.

It is a good thing that the time to close has been extended for buyers with a contract in place, said Newtown Board of Realtors President Anne Stark, Monday, August 30. “The tax credit definitely stimulated people to have an offer accepted by the end of April,” she said.

However, buyers and sellers in Newtown or other parts of Fairfield County have less to worry about overall than people in other parts of the United States. So far as the expiration of the tax credits go, said Ms Stark, sellers will be able to make that up to buyers now with compelling pricing of homes.

This area of the Northeast has fared far better in the first eight months of 2010 than other parts of the country, as well, she said. Comparing January to August of 2009 to the same time period in 2010, sales were actually up 20 percent from last year, Ms Stark said. “In 2009, 134 units sold through August 30, while in that same time period of 2010, 166 units were sold,” she said.

Of those 166 sales, ten percent were bank-owned properties, and nine percent were short sales, meaning that the homeowner owed more to the bank than the home’s current value. “Everything from mobile homes to million-dollar homes have sold this year,” said Ms Stark. “It is more a question of being the best priced property and ‘beauty contest’ winners that make homes sell,” she said. Sellers are also becoming more educated about pricing and the condition of a home in order to sell. “Today, a home must be priced compellingly, not just competitively,” she noted.

It is Newtown’s geographical location, especially, that makes it a “Camelot” in comparison to other towns across the region and across the country, Ms Stark said. “We are in a larger geographic area for people to pull from for jobs — New York City, New Haven, Hartford, even Westchester County; and jobs are not just one industry here. We still have good schools in Newtown, and many different types of houses. We are a diverse area, so it helps us stay a little more even,” she said.

Particularly hard hit areas in the United States, such as Nevada, where 68 percent of the sales are short sales; Arizona, where half of the sales are short sales; or Florida, where 46 percent are short sales, drag down the national average, she noted.

There are currently 299 homes on the market in Newtown, with seven properties being bank-owned and eight of them short sale properties. “That number of homes is a little high, but it’s not bad,” Ms Stark said.

Another positive improvement in Newtown’s housing market, she said, is that the days on market have dropped this year, from 137 days in 2009 to 126 days average sale time in 2010.

One area in which Newtown has stumbled is in the selling price of homes. “The average sales price has dropped slightly, from $469,000 in 2009 to $463,000 this year,” added Ms Stark, which is somewhat the opposite from what the rest of the United States is experiencing.

The national median existing-home price for all housing types was $182,600 in July, up 0.7 percent from a year ago, said the NAR report, the silver lining in the cloud for other parts of the country.

“Newtown buyers are making initial offers that are not as attractive to sellers. Sellers have to be somewhat flexible,” Ms Stark said. Right now in Newtown, home prices are leveled out to what could be considered “normalized” levels.

There is competition from sellers who must, for one reason or another, move immediately, and from short sales and foreclosure properties, but that is a small percentage of the marketplace overall, she said.

Buyers hoping for a deal with a short sale or foreclosure property must also be willing to be flexible, in terms of plans, said Ms Stark. “They must be aware that there could be timing issues, if they have to sell their home in order to buy the new property.”

Buyers holding out in hopes that home prices will dip further might want to rethink that strategy. “Indicators,” Ms Stark said, “are that mortgage interest rates will go up, maybe 1.25 percent even. So a person might pay a lower price, but if the interest rate is up, you will put out more money overall — for the exact same house. Now is a good time to buy.”

Rates at local banks, for a 30-year fixed mortgage the week of August 24 were 4.36 percent, down somewhat from the week before that, said Ms Stark. A 15-year fixed mortgage could be found for 3.86 percent, with adjustable rate mortgages also available below four percent. “It is still fairly tough to get a mortgage, though,” she cautioned. “You have to have good credit and a verifiable income to get a good mortgage rate,” she said.

Connecticut, Fairfield County, and Newtown are holding their own in home sales this year, she said. “Sellers here do not have the same worries right now as in other parts of the United States. If your home is in great condition, with a very good price, you will be able to sell your home.”