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March 21, 2015

Residential Market Perspective

Filed under: the home market — Tags: , , — marc @ 5:01 am

For the majority of residential real estate values in Connecticut the market has remained flat.   Lower end and mid-market properties continue to bounce along what has become a logical resting point for this market after having come down from their 2006 highs.

Within every market remain underlying factors that either drive values up or bring them down.   On the positive side, marketing times for most properties have become shorter and interest rates have remained at their historic lows for several years now, making the entry for new homeowners more affordable and perhaps opening the window for existing homeowners to step up to a more expensive price point.  On the down side are economic indicators and rising ownership costs that have essentially kept a lid on market appreciation.

Economically, Connecticut and New England have not seen any material job growth along with virtually no increase in real wages for years.   Coupled with the fact that the population in this area continues to ebb resulting in a smaller audience for area properties.   Additionally, the loss of manufacturing as well as white collar jobs has only created a gap in the market that can be difficult to fill.  Add to the mix the rising costs of home maintenance, fuel and insurance, home ownership for some has become a difficult task to balance.  On the subject of insurance, properties located in flood zones have sometimes become white elephants and have been difficult to market, especially in the wake of the recent hurricanes that caused record damage to coastal New England.

Back to the positive, upscale communities continue to flourish, quality-built homes continue to have buyers and cities and urban areas are experiencing a renewal in popularity, with many suburbanites now doing a reverse migration of what was experienced in the 1970s and 1980s, taking in many of the cultural and convenient aspects that some cities offer.  As far as the water-influenced market, low-lying homes and properties plagued with flooding issues will likely continue to wane in popularity, while the water-influenced homes, including that of water view homes that sit high and dry will likely become more sought-after and therefore, more valuable.

Looking ahead….