How does the national market compare with our local market?
So much of what we think we know about real estate is taken from national headlines.
A few years back you may recall seeing reports about the strength of the national real estate market and how it had surged in value and volume since the depths of the recession. You may have been convinced things must be the same here and that the nearly 30 percent depreciation we experienced was a thing of the past.
Let’s take a deeper look into the data. According to the National Association of Realtors, from October 2016 through October 2018, home prices increased approximately 7 percent. In the Northeast, during the same time period, they increased nearly 5 percent. In Northern Fairfield County, we experienced a smaller rate of appreciation, closer to 3.5 percent.
The overarching story lies in what occurred after the worst of the recession was over. Several key markets around the country surged in values again, recovering much if not all of what they lost in the downturn.
Our market stayed flat from when we hit bottom in 2015/2016 and didn’t experience any marked rate of appreciation until recently. Our appreciation can be directly tied to a first in more than a decade occurrence of supply shortages.
Turning back to national news, we are hearing more and more about a market slow down. Inventory is spiking, new construction is slowing and values are dropping, all while interest rates have crept up toward 5 percent.
What does that mean for us you ask? I sincerely believe we’ll stay relatively flat on value with the possibility of experiencing low single digit rates of appreciation or depreciation depending what supply looks like for 2019.
If we continue 2018’s trend of lower supply, we can expect a flat to slight increase in values while a return to an oversupply market may push us a few points below neutral. Priced right and cared for accordingly homes are selling; be smart and aggressive in order to maximize market value.
Andy Sachs, Team Leader - The Around Town Team, Coldwell Banker, (203) 727-8621, Andy.Sachs@ coldwellbankermoves.com