Housing sales in southeast Connecticut indicate the region is slowly emerging from a decade-long slump, with the market for lower-priced homes showing the greatest activity, according to several area realtors.
“We continue to see the trend for the lower-priced properties, under $300,000 … starters to a little bit bigger, and those can fly off the shelves pretty quickly,” said Joel Grossman, new business development director of Calcagni Real Estate, which represents Middlesex County as well as New Haven County, among others. “It looks like the trend in terms of prices is in that 2 to 4 percent range, probably more on the lower side. Because the inventory is scarce, those prices can go up a little bit more.”
In a January 2 phone conversation with CT Examiner, Grossman said that even with historically low interest rates expected to remain stable through 2020, sales are little slower at the $400,000-and-up mark, with a three-to-five-month inventory, and above the half-million mark, the market continues to lag.
“When it gets over $500,000 in our area, it starts to really slow down, and that’s what we’ve seen over the past few years, not too much difference,” he said.
Across Connecticut, the median price for home sales rose from $244,000 in December 2018 to $248,000 in December 2019, about a 1.6 percent increase according to multiple listings service (MLS) data provided by Jed Backus, owner of Backus Real Estate in Hamden and the 2020 president-elect of the Greater New Haven Middlesex Association of Realtors, in a January 2 phone conversation with CT Examiner.
“During that period, from December 2018 to December 2019, the average sale price in Connecticut decreased from $335,741 to $333,063, or a less than 1 percent decrease,” said Backus. “The average is higher than the median [because of] stronger sales at lower end of the market. The struggling upper end of the market is bringing the average down.”
A statewide data search in the $170,000 – $269,999 range showed a 5.4% increase in sales from December 2018 to December 2019, said Backus.
In the $434,000-and-above market showed no change from December 2018 to December 2019, while the $850,000-and-above market declined about 3.7 percent.
In a data search that included the towns of East Lyme, Old Lyme, Lyme, Essex and Old Saybrook, the median price of real estate rose from $320,000 in December 2018 to $335,000 in December 2019, or about a 4.7 percent increase, said Backus.
The average home price in these towns increased from $407,929 to $413,356 over the same period, a 1.3 percent increase.
In the 10 years since the 2008 recession, Backus said the that the growth in values had been monest, but lately reflecting “a little bit of a breakout.”
“We’re seeing small increases but the trend line is probably good overall,” Backus said. “Moderate increases can be fine. It keeps affordability and for a seller, it’s predictable.”
Housing trends for the military
“The trend we’re seeing is a lot more military are not looking just for temporary homes, they’re looking for retirement homes,” said Carol Christiansen, owner of Remax in Gales Ferry in Ledyard and president-elect of the Connecticut Association of Realtors, by telephone on January 2.
“When I first started in real estate, they’d say, I’m going to be stationed in the area for three to five years and I’d rather live off-base because they can use their BAH (Basic Allowance for Housing) to buy a house and be in a home rather than be in military subsidized housing,” she said. “Now we’re finding they say they really like Connecticut and they’re going to buy a home and if we do get stationed elsewhere we’re going to rent our house rather than sell it because we want to come back here when we retire.”
She said, compared to civilians, members of the military have money and jobs so that they can return to Connecticut, reversing the trend of workers exiting from the state.
Christiansen said that she expects Electric Boat to hire between 5,000 and 8,000 workers in the next five years, which will provide a huge boost to the regional economy.
“They’re hiring engineers straight out of college and they’re coming in in their early 20s to work on these government contracts. We’ve been very fortunate that after lagging behind the rest of the country and even the rest of the state, southeastern Connecticut is starting to be revitalized because of the influx of jobs that are coming in, and they are also young too,” she said.
Millennials: To buy or rent?
“I think what I’m seeing is that people may have misinterpreted millennials owning homes and the pressures against that. In our job markets, it’s rare that someone works for one company for 30 years, it’s hard to find that kind of stability and people are waiting longer to get married and start families,” he said. “A lot of the draws to owning a home, those points in life are happening later for upcoming generations, but doesn’t mean you don’t want a place for your child to ride a bike.”
He said he is seeing a wide variability in millennials’ interests and how they want to live.
“Millennials do not want just one thing, so the housing stock that they’re going to look to will be diverse. There is not one story here,” he said.
Grossman, however, said he saw more millennials renting than buying.
“What we see is an interesting trend where a lot of millenials aren’t willing to put down roots as quickly as they used to, so they might want to be a little more mobile with their jobs, they may stay for a couple of years and pick up and go someplace else. They don’t want to be tied to a home, they can easily get out of a rental, be there for a year and they can move on,” said Grossman. “As quickly as these new [rental] communities are being built, they’re getting scarfed up, pretty quick. There’s definitely a continuing thirst for rental housing.”
The rentals being built today offer club houses and fitness centers, and some have theaters, club rooms, dog-walking and dog-washing areas, he said. “They’re feature-laden, so they’re very attractive.”
Backus and Grossman agreed they are seeing far more construction in apartments than in condominiums.
“I’m seeing more development of apartments than condo and more apartments targeting walkable neighborhoods — that’s a reflection of convenience and economies of scale. It’s where the developer can build more densely,” said Backus.
The market for condominiums
Backus said that Connecticut’s market for condominiums had suffered more than for single family homes. Financing became more difficult to find due to industry benchmarks including a bank requirement of an 80-20 percent renter-to-owner ratio.
“Otherwise, the only market you’re going to sell to is to investors, so there was downward pressure on price that didn’t impact single family the same way,” he said.
Christiansen said she saw that impact in Ledyard where the single family home market is comparatively stronger.
“Our condo market in our area has been bad for 10 years — condo sales were down 17 percent. This year I’ve only sold three condos and two were for downsizing,” she said. “I also think that the resale on condos from 10 years ago, people can’t recoup the money and the value is not there.”
Condominiums attract a certain type of buyer, she said.
“If you’re a professional person and you don’t want to work on your lawn and you don’t care about having a swingset or a garden then that’s the place to be, but I think in our area we’re a little more suburban and people want to have a yard and that type of thing.”
Backus said his current observation is that one size does not fit all when it comes to millennial real estate buyers.
“We’re starting to see more move-up buyers and for a very long time we didn’t see too many move-up buyers because I think people who already owned a home were worried about the economy so they were just kind of willing to stay where they were,” said Christiansen. “Now they’re selling and then buying a more expensive house. That went away for a very long time when the market crashed, everyone was just kind of nervous and they just stayed where they were.”
The lower end of the market is strong but the high end still hasn’t recovered,” she said.
“If you list your house for under $250,000 in this area and it’s in decent condition, it’s going very quickly. I just looked at area … in southeastern Connecticut with the most inventory right now, and that is Stonington and most of that is for properties over $500,000,” she said. “There was a time I remember when we had five years of inventory over $500,000, I don’t think it’s that bad now but that is where the market is sitting.”
Grossman, who specializes in new homes, said he’s seeing slow growth, which he said showed consumer confidence in the housing sector.
“I don’t like to look in the rearview mirror. This is our new normal. I believe we’re coming out of that slump, the only direction is up as long as we can continue with good economics out there and continue to 2021 with good markets,” he said. “Most new builders would love to see one to two units per month. The trend is we should be able to get one new sale a month with the new construction — that tells me a lot about people’s comfort with the economics and wanting to buy new.”
Backus said real estate is particularly local in Connecticut — town by town, sector by sector, neighborhood by neighborhood — and it was important to analyze local data.
“In Connecticut we can get pretty down on ourselves. We’re not San Francisco, we’re not Denver, but it’s not doom and gloom either. We’re a fairly stable, predictable market,” he said. “With the differences between the median and average sales, the high end is struggling more than the low end and shows how local real estate is. You’ve got to dive into the data with a local expert to understand how big picture trends relate to bigger picture — call your realtor.”
5 Affordable Markets to Buy Real Estate Close to Vancouver – RE/MAX News
The British Columbia Real Estate Association (BCREA) recently published an shocking report about the province’s housing market in September. It found that home sales soared to $49.7 billion for the first nine months of 2020, up 25 per cent from the same period a year ago. Instead of enduring a COVID-19 pause, the province’s housing market was instead hyperactive over the course of 2020.
BCREA data also highlighted that homebuyers acquired more than 65,000 properties from January to September, a 12.5 per cent jump year-over-year. The average price year-to-date swelled 11.2 per cent to $764,298.
But how could this be happening? The association published a separate report, titled “The Unusual World of Pandemic Economics.” It assessed how the province’s real estate market is booming, citing higher savings rates, government income support, a tight housing supply, uneven job losses, and historically low interest rates.
“One thing we know for sure is that pandemic economics are very unusual and in these unprecedented times, history may not be as strong a guide,” the report stated.
Put simply, although the Canadian economy is in a recession, this economic downturn is anything but normal.
While the impressive resilience and recovery of the Vancouver real estate market has made national headlines, what about other cities that are in proximity to the nation’s third-largest city? While recovery within these municipalities has also been strong, prices have yet to swell to unattainable levels, making them viable destinations for homebuyers with sights set upon the Vancouver area. We have compiled a list of five the top 5 real estate markets that have managed to strike the balance between desirability and affordability a little better than neighboring Vancouver.
5 Affordable Markets to Buy Real Estate Close to Vancouver
Okanagan Mainline Real Estate Board (OMREB) reported that 21.79 per cent more homes were sold in the Kelowna region in September compared to the same time last year. The numbers pointed to rising property valuations, with single-family homes, townhomes, and apartment condos booming. OMREB President Kim Heizmann noted that the COVID-19 public health crisis had forced homebuyers to assess things differently, including their living space. Kelowna sees some properties still reasonably priced as you could scoop up a condominium for as low as $244,400.
According to the Victoria Real Estate Board (VREB), 60.6 per cent more properties were sold in September 2020 than September 2019. It should be noted, however, that on a month-to-month basis, home sales were up just one per cent. The Multiple Listing Service® Home Price Index benchmark value for a single-family home in the Victoria Core increased year-over-year by 3.5 per cent to $879,200. But the benchmark value for the same home slipped by 1.1 per cent in August.
What was the reason for the monthly decline? New supply entered the market, says Victoria Real Estate Board President Sandi-Jo Ayers.
“We had some much-needed new inventory enter the market over the course of September,” stated Ayers in a news release. ”But the supply has not been sufficient to outstrip the heightened demand. We continue to see multiple offers and pressure on pricing across many neighbourhoods. Looking forward, it is impossible to determine what our fall market will look like, but if the past couple of months are an indication, we may see higher seasonal numbers than we would have expected in a more predictable year. That said, since our situation can change in a blink, we cannot look at the past months as the start of a trend, but instead as a moment in our market during an unpredictable time.”
Local Victoria real estate agents are hopeful that prices (and some of the fierce competition) may ease in the coming months amid these new stocks arriving on the market.
Kamloops is one of the most beautiful cities in Canada, so it’s not surprising that this riverside city is drawing homebuyers from the Vancouver Core as well as from across the country. Although demand is strengthening, the average residential price remains reasonable for new market entrants.
New data from the Kamloops and District Real Estate Association (KADREA) found that the average home price rose 15.3 per cent year-over-year in September to $493.597. Home sales advanced 23.8 per cent from the same time a year ago.
KADREA President Wendy Runge thinks it could be hard to forecast the short- or medium-term future of the Kamloops real estate market.
“Real estate sales numbers for last month have once again shown us that the impact of the pandemic on the market has been more positive than originally predicted,” Runge explained in a statement. “For the fourth month running, the number of units sold has been setting records that not many would have contemplated at the beginning of the pandemic. While sales usually dip in September and then pick up again during the fall months until winter, the trend we are seeing right now is unlike anything that we have seen before.”
Real estate agents are describing the housing situation in Surrey and the broader Fraser Valley region with one word: historic. For the fourth consecutive month, the housing market experienced robust growth as the Fraser Valley Real Estate Board recorded a 9.4 per cent increase in September from August.
The benchmark price for a single-family detached house rose 1.3 per cent month-over-month to $1.032 million. But how would this be affordable?
The first factor is that interest rates are near zero; more homebuyers are taking advantage of these historically low rates, borrowing greater amounts to snatch up real estate that may have previously been out of reach. Plus, the Bank of Canada (BoC) has signaled that it is not raising rates for a few more years, meaning that homebuyers can lock in these extremely low rates.
The second aspect is that new supply is coming to market, which could alleviate the upward trend and allow newcomers to scoop up properties. In September, the number of new listings climbed 6.2 per cent from August.
“For many existing homeowners and first-time buyers, their buying power is greater than it’s been in a long time. Interest rates are very low, people have saved money over the last few months, and they’re choosing to invest it in their most important asset. Sellers are also recognizing that with lower than normal inventory, this is a smart time to list,” said Fraser Valley Real Estate Board President Chris Shields in a news release.
Burnaby Now recently sported a headline that accurately summarized the city’s housing market: “COVID can’t stop Burnaby real estate as Metrotown project nearly sells out in 2 weeks.”
The Real Estate Board of Greater Vancouver (REBGV), which covers Burnaby, reported that residential home sales in the region surged 36.6 per cent in August 2020 from the previous year. But for people who are considering relocating to Burnaby, the numbers suggest that new supply is coming. There was a 55.1 per cent increase in newly listed properties – detached, attached, and condominiums – for sale in August. This was 34.8 per cent above the ten-year August new listings average.
Put simply, the demand is strong, but supply is beginning to keep up, which should slow down price growth.
Is Affordability Gone from British Columbia Real Estate?
For people who have been sitting on the sidelines and wanting to finally submit an offer on a property, the rising prices across the province and the rest of the country can seem rather intimidating. While the fleeting COVID-19 discount is unlikely to return, many cities near Vancouver do offer affordability if you know where to look. Remember, it might not seem like it, but 75 per cent of Canada’s regions are “undervalued,” and this includes some parts of B.C. Many B.C. cities are beginning to witness new inventory come to market, which could relieve some of the higher prices seen this year.
Real Estate Roundup 10.21.20 – Real Estate Daily Beat
Real Estate Roundup:
National Acquisitions Roundup
- Blackstone has agreed to purchase an office complex in Silicon Valley that’s leased to Roku for $275 million. The two buildings are part of a project called Coleman Highline, a new development that’s walking distance to a Caltrain station and the stadium where Major League Soccer’s San Jose Earthquakes play. The purchase price translates to roughly $770 per SF. (Bloomberg)
- The Stro Cos. has purchased a fully occupied, 78,000-square-foot industrial property in Fairfield for an undisclosed price. The property, located at 140 Clinton Road, is home to two tenants and sits directly along Route 46, offering quick access to interstates 80, 280 and 287, among other highways. (RENJ)
- Realterm US Inc. has acquired a property under renovation for use by Amazon from Bridge Development Partners for $81 million. The Torrance, CA property is located at 2751 Skypark Drive, and consists of 118,000 of warehouse space, with 12,500 SF will be set aside as an office and reception area. (LABJ)
National Financing Roundup
- AvalonBay has secured a $167 million construction loan from a syndicate led by Bank of America for its 475-unit multifamily project in Downtown L.A.’s Arts District. The development sits on a 3.75-acre site at 668 S. Alameda Street, and will also have roughly 60,000 SF of commercial space. (LABJ)
- Starwood Retail Partners is giving up on the nearly 1 million-square-foot Louis Joliet Mall in Chicago, handing over the keys to its lender after first defaulting on a loan payment in the spring. The move comes two months after parent company Starwood Capital Group lost control of a seven-property regional mall portfolio. The landlord is reportedly in negotiations for a deed in lieu of foreclosure or a foreclosure sale. (TRD)
- In a regulatory filing made public Tuesday, AMC said it will be selling 15 million Class A shares in an offering valued at approximately $45 million. The firm estimates that on September 30 it had $417.9 million in cash and cash equivalents—an amount that “would be largely depleted” by the end of 2020 or early 2021 without any additional sources of liquidity. Last Tuesday, AMC disclosed in a regulatory filing that it resumed operations at 494 of its 598 U.S. theaters with limited seating capacities of between 20% and 40%. (Forbes)
- With outdoor space at a premium, shopping malls and garages are opening their parking lots to tenants and other vendors for open-air stores and other events. At a time when most brick-and-mortar retail is suffering, landlords are grateful for anything that brings in any additional revenue or foot traffic. Some use lots for public-service functions like job fairs, voting stations and drive-through Covid-19 testing. Others have become gathering spots for trivia or bingo games where participants play from their cars. (WSJ)
- JEMB Realty has filed a lawsuit that claims that Greenwich Insurance Company should have covered their losses at 1293 Broadway because the pandemic is defined as a pollutant. The insurance policy defined pollutants as “any solid, liquid, gaseous or thermal pollutant, irritant or contaminant.” The coronavirus qualifies, given that it spreads through the air or via surfaces, JEMB claims. The firm is seeking $3 million in remediation. (TRD)
New to the market
- Brookfield Asset Management is exploring a sale of its life-sciences real estate portfolio, and seeking about $3 billion. The firm is working with advisers to sell roughly 2.3 million square feet of life-sciences real estate it acquired as part of its 2018 purchase of Forest City Realty Trust. (Bloomberg)
- Nontraded real-estate investment trusts are again bringing in money after a pandemic slowdown… The funds typically take investments of as little as $2,500 and have been paying dividends above 5% without the volatility of the stock market. In the third quarter, the funds raised $1.37 billion. That was $450 million more than they raised in the previous quarter. In the first quarter, a record number investors tried to get their money back and some weren’t able to redeem shares. In the second quarter, redemption requests eased to $515.8 million from $724.1 million in the first quarter. (WSJ)
- With New Yorkers rushing to the suburbs, Fairfield County, Connecticut — the home of tony Greenwich — suddenly has the fastest-rising real estate prices in the U.S. The median home price climbed 33% in September from a year earlier to $499,000, while sales jumped 80%. By both measures, the county was the hottest U.S. housing market, based on an analysis of the largest metropolitan areas in the U.S. (Bloomberg)
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Hudson Bay aims to 'unleash' real estate values – Western Investor
A plan by Hudson Bay Company (HBC) to unlock the real estate values of its vast property holdings could run into dramatic price differences among its holdings in Western Canada.
On October 19, the venerable retailer, founded in Canada in 1670, announced it had formed HBC Properties and Investments (HBCPI), a dedicated real estate and investments business to “manage, maximize and enhance” the 40 million square feet of gross leasable space that HBC owns across North America.
Richard Baker, HBC’s executive chairman and CEO said, “This is an exciting phase of our company’s transformation and provides us with a significant opportunity to unleash the full potential of our real estate and investments business. Under this new organization, we will build upon our strong foundation of valuable real estate assets in key demographic areas. We will also continue our strong track record of maximizing our portfolio and generating value from these assets, as we did through the sales of the Lord + Taylor flagship building and our interest in European real estate assets,” He added, “HBCPI is well-equipped to further elevate and increase the value of our portfolio.”
HBCPI sold HBC’s Lord + Taylor building in New York City last year for $1.1 billion. It unloaded the company’s share of European assets for a reported $1.5 billion.
The plan to monetize real estate could include downtown locations in Vancouver, Edmonton and Winnipeg.
The 168,000-square-foot Edmonton store is slated to close this fall. The Winnipeg downtown store, once the HBC flagship outlet in Canada, is scheduled to close February 2021 after more than 125 years in business.
In Vancouver, HBC had a conditional agreement in 2018 to sell its downtown store at 674 Granville Street to RioCan Real Estate Investment Trust for $675 million, but the transaction failed to go through.
The site, which includes 767,000 square feet of land at the corner of West Georgia Street, is currently assessed at $251.6 million by BC Assessment.
As a comparison, the 650,000-square-foot Winnipeg downtown building was valued at zero in a January 2020 appraisal done by Cushman & Wakefield.
According to the appraisal, the building is worthless, but the site would likely be developed with retail and other commercial uses, such as offices or multi-residential development.
This would likely be the fate of other HBC downtown locations in Canada.
HBCPI now owns New York-based Streetworks Development, a large-scale property development division that specializes in mixed-use redevelopments.
“This new division focuses on creating multi-use spaces that feature a variety of services and experiences across the workplace, retail, residential and entertainment categories,” according to a HBCPI statement October 19.
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