Navigating Market Shifts: Impact of Recent Stock Events, July Housing Trends, and NAR Lawsuit Settlement Insights
In today’s newsletter, (3) key topics:
- The impact of recent stock market activity on real estate
- July housing and projected trends
- Brief update on NAR lawsuit
Recent Stock Market Events
Last Friday, the July jobs report intensified fears of a possible recession in the U.S. Consequently, on Monday, August 5th, global stock markets went into freefall. Let’s analyze what we know versus what we don’t.
WHAT WE DON’T KNOW
- If a recession is imminent
- If rates – the 10-year and 30-year – are going to snap back as they have in the recent past
WHAT WE DO KNOW
- Mortgage rates are down a full percent from recent highs, creating a moment to take advantage of:
- Buyers: Act now. Real estate just became a bit more affordable.
- Sellers: Act now. Buyers are likely to re-enter the market to secure lower mortgage rates. If the economy goes into recession, we will likely see a decrease in buyers for your home.
As you’ll read below, the recent stock market decline only intensifies the advice we are providing buyers and sellers across Fairfield County luxury markets.
July Market Snapshot
As seen in the data (July ‘24 vs. July ‘23) and in our anecdotal experiences, the Fairfield County real estate market continues to favor sellers. Some of the key indicators.
- High Sales to List Ratios:
- Southport (109.0%), Darien (109.4%), and Wilton (109.5%) are experiencing exceptional sales to list ratios. This is a strong indication of high demand and competitive bidding in these markets.
- Shorter Days on Market (DOM):
- Westport (36 days, ↓ 41.0%) and Fairfield (39 days, ↓ 15.2%) showed a marked decrease in average days on market. Homes are selling significantly faster in these markets which is advantageous for sellers.
- Increasing Median Sales Prices:
- Wilton (↑ 54.8%) and New Canaan (↑ 40.5%) have seen significant increases in median sales prices. This suggests a favorable market for sellers who can achieve higher prices for their properties.
New to our analysis are insights from Altos Research. While past sales data provides a constructive framework for trends, Altos Research is the only company that allows us to analyze the “active market” - as in – what’s happening in your market in real time.
As of today, August 8th, Altos Research rates all (9) Fairfield County luxury markets that we cover anywhere from a “Strong Seller’s Advantage” to a “Slight Seller’s Advantage”.
Strong Seller’s Advantage Markets
Southport / Wilton / Fairfield / Darien / Weston / Ridgefield
(“Strong” showing home sales far exceeding new inventory and where median home prices continue to rise – two clear benefits to sellers.)
Slight Seller’s Advantage Markets
Westport / Greenwich / New Canaan
(“Slight” defined by their stasis point in terms of sales to inventory. Median home prices are holding steady.)
Based on the data, here are our top pieces of advice:
SELLERS:
- Price Competitively to Attract Buyers:
- Regardless of high demand and shorter DOM, pricing your home competitively can attract more buyers and potentially lead to multiple offers. We will help you arrive at the right list price.
- Highlight Key Property Features:
- In competitive markets, it’s important to showcase your home’s unique features. Highlight recent upgrades, desirable locations, and other appealing aspects to make your property stand out. Professional staging and high-quality photos can also make a significant difference.
BUYERS:
- Act Quickly in High-Demand Areas:
- Markets like Wilton and Darien are experiencing significant increases in median sales prices and high sales-to-list ratios. If you find a property you like in these areas, be prepared to move quickly to make an offer. Delays can result in losing out on desirable homes.
- Be Prepared for Competitive Bidding:
- With low inventory in many markets, such as Westport and Ridgefield, buyers should be ready for competitive bidding situations. Ensure your financing is in order and consider making strong initial offers to stand out.
- Look for Negotiation Opportunities:
- In markets where the Average DOM is longer, such as Greenwich, there might be more room for negotiation.
- Homes priced properly and staged typically sell within the first few days of coming to market. Homes that linger on the market a few weeks may have room for negotiation.
Your home is a valuable asset. Even if you’re not currently buying or selling, our advisory practice offers essential guidance. Just as you rely on financial, tax, and estate advisors, let us help you plan for your home’s future.
- Stay Informed with Market Trends:
- Keeping up with the latest market trends is crucial. Regularly review market data and stay in touch with us for updates and personalized advice tailored to your specific needs and goals.
- Leverage Professional Expertise:
- Navigating the real estate market can be complex. As your trusted advisors, we provide insights and strategies to help you make informed decisions. Rely on our expertise to guide you through the process and achieve the best outcomes.
- Be Flexible and Open to Opportunities:
- In a dynamic market, opportunities can arise quickly. Be flexible with your plans and open to exploring different neighborhoods or property types that might meet your needs and offer better value.
- Plan for the Long Term:
- Real estate is a significant investment. Consider your long-term goals when making buying or selling decisions. Whether it's finding a home that meets your future needs or selling at the right time to maximize returns, strategic planning is key.
- Engage with Our Team Early:
- The earlier you engage with our team, the better we can assist you. For future buyers, this means getting pre-approved and defining your criteria early. For future sellers, this involves preparing your home for the market and setting the right price from the start.
The National Association of Realtors (NAR) Lawsuit Settlement
On August 17, 2024, the impacts resulting from the recent settlement of the National Association of Realtors (NAR) take effect in Connecticut. While much has been made of the implications for real estate clients across the country, rest assured, nothing changes for you - our clients. The key highlights of the settlement include mandatory disclosure of commission agreements and enhanced consumer protections. Our business model has always prioritized transparency and fairness in real estate transactions, particularly concerning commission structures. Buyers and sellers will continue to benefit from clear visibility into the fees they are paying, enabling informed decisions. This shift reinforces what we’ve always practiced: a straightforward breakdown of costs and a transparent negotiation process—principles we’ve always upheld to safeguard your interests throughout your real estate transactions
