Real estate shows increased sales
Has the recession finally passed? All signs of movement in the market point toward recovery of the real estate sector in Wilton.
From Jan. 1 to June 30, of this year, there have been 125 homes sold, compared to 96 during the same period in 2012. There has also been an increase in the average sale price from $807,000, to $867,061. A less volatile scale of real estate pricing — median sales price, where half the sales were above this number and half below — shows a $2,500 increase in price, from $772,500 in 2012 to $775,000 in 2013.
This trend mirrors that which has been growing since the bottom-point of the Great Recession. In all of 2009, only 136 homes were sold in Wilton. This year, it took only six months to get within 11 of that number.
“The atmosphere is hot,” William Pitt Realtor Ryan Cornell said in a recent interview. “Buyers are finally jumping off the fence because interest rates are starting to go up.”
Since the second quarter of 2013, Mr. Cornell said, interest rates have gone up as much a 0.75%. Though this may not seem like a large jump, even small increases in interest rates have a huge effect on a customer’s purchasing power.
“Depending on how much your mortgage is, that increase could equal hundreds of dollars in increased monthly payments,” he said. “Even if rates increase 0.125 of a point, that can have a huge impact on your payments, and your purchasing power. It can affect that power by as much as 10% to 15%.”
This increase in interest rates, matched with a steady average home value increase in Wilton, has created a strong market. Buyers are trying to take advantage of the historically low — but increasing — interest rates, while sellers are seeing their homes’ worth approach pre-recession levels at a sustainable rate.
“Compared to last year, Wilton saw a 30.2% increase in units sold from January to June,” said Peg Koellmer, owner of Realty Seven in Wilton. “So far the average price is up 7%, and median home values are up 0.3%. Everyone in the housing business wants to see this. Average prices were going up double-digit every year up to 2008. We needed a more even, steadier growth.”
Ms. Koellmer believes that by next year, she will hear from a lot of buyers saying, “I wish I had bought during the recession.”
“I think we’ll all be feeling that way,” she said. “Interest rates are still historically low, and it’s still a good time to get into the market. But, no one was sure how long the recession was going to last, and no one was sure how much money they were going to need to get through it.”
However, Ms. Koellmer admits she doesn’t have a crystal ball to look into the future of the real estate economy.
“The only sure thing is that there will be a down-market after an up-market,” she said. “But I can’t predict when it will come. I’m hoping I’ll be retired before the next down market.”
Both Mr. Cornell and Ms. Koellmer said there is enough inventory in Wilton to support the current up-tick in home sales.
“Inventory is always a balance,” Ms. Koellmer said. “I find that the real estate market is very good at reaching equilibrium. It may take four or five months to adjust after a surge or decline, but it’s good at making equilibrium quickly. As more houses sell, more sellers will put their houses on the market. If not, we’d have an inventory crisis going on.”
However, Marion Filley, of Prudential Realty, said she believes there is a shortage of homes available in certain price ranges, helping increase a seller’s chance of getting full value for their home. She is particularly concerned about homes priced up to $1 million.
“Too few houses are good for sellers, as it tends to drive prices up,” she told The Bulletin. “The shortage of inventory is more in the lower price ranges as there are more buyers at that level.”
According to Mr. Cornell, high liquidity in the Wilton market contributes greatly to the town’s strengthening market as well.
“If you compare the number of houses sold in a town over six months, to the number of houses in that town, you get a number representing liquidity,” he said.
Compared to Weston and Redding, the turnover rate is very high in Wilton.
“It’s three times harder to sell a house in Weston than in Wilton,” as proved by liquidity rate comparisons, he said. “It’s not because people love Weston and never ever want to leave. It’s because they don’t offer the amenities people have been looking for in past years,” and have taxes as high as Wilton.
While there are enough houses on the market, Mr. Cornell said, most people are moving within town, or to surrounding areas.
“Most people are changing houses due to living requirements,” he said. “I’m not seeing any migration of population in or out.”
In line with this fact is a recent increase in building permits taken out by area residents. Rather than moving into a new home, Wiltonians are investing money into their current houses in the form of additions at increasing rates.
From July 1 to Dec. 31 during fiscal years 2010, 2011 and 2012, the Wilton Building Department reported an average of 84 alteration and addition permits issued. For that same six-month period in fiscal year 2013, the department saw an increase in permit issuance to 97, 15% more than the three-year average.
A real estate broker for 30 years, Ms. Koellmer said the most popular homes in Wilton are still the same kind of houses that were popular in the past. The strongest segment of the market is made up of homes ranging from $750,000 to $950,000.
Wilton has always had houses with unique designs, like the rotating house on Olmstead Hill Road, but more traditional homes are the most popular when markets are not fully recovered, she said. Additionally, access to a generator, and energy efficiency are not at the top of buyers’ priorities.
“You can always get a generator, and people aren’t looking for energy,” Ms. Koellmer said. “They’re always looking for a good kitchen and bath, a flat yard, a clean house, and good flow to the house.”
Likewise, the academic, family-oriented nature of the town always draws people here, Mr. Cornell said.
“Wilton is an academic and family town. People move here for the great schools and the great family life,” he said. “They also need the proximity to New York City. Buyers are looking for an open kitchen and great room, where mom can be cooking and kids can be doing homework as a whole family.”
Staging for an online presence, Mr. Cornell said, is the most important “battleground” in today’s advanced real estate market.
“The way we live in a house and the way we stage a house are two very different things. I will completely change the way a house looks for photography. The “showings” are happening online. Fifty percent of the buying decision is made before they come to the house. The battleground is online.”
Few agents offer well-crafted online “stagings,” but Mr. Cornell believes it is one of the most important aspects of a home sale.
“There are two kinds of staging, not only physical staging, but virtual staging as well. It can make all of the difference. People don’t buy a house, they buy a dream, which is why the staging is so important.”
There are also physical improvements that are very important if a seller is interested in getting the best price for their home, Ms. Koellmer said.
“The walkway to the house should be clear and open. The front of the house should be clean and accessible. The inside should be clean, orderly, decluttered, and painted. The windows should be washed — all of the normal things are important.”
Like Mr. Cornell, Ms. Koellmer said getting professional help is important while staging a home.
“Get the help of a stager to eliminate things like odors from pets or smoking. All of those things will cost you money at closing.”