Selling high or low? It’s a mixed bag
Of 93 of the homes sold in Wilton in the first six months of this year, most were sold for more than originally bought. As might be expected, those purchased during the real estate bubble years from 2004 to 2010 did not fare as well.
The Bulletin looked at real estate transactions recorded in the town clerk’s office from Dec. 29, 2017 through June 28, 2018 for both single-family homes and condominiums and researched the latest sale data before 2018. Ten were excluded for the following reasons: lack of original sale data, new construction, extensive renovation that skewed results. Information came from zillow.com and field cards on the town assessor’s online database.
Twelve of the properties were condos, the rest were single-family homes. Eight of the homes were affected by foreclosure proceedings.
Not surprisingly, homeowners who fared the best in the sale of their property were those who owned it the longest. Two properties were owned for more than 50 years and the return on those investments topped 1,000%.
Each of the nine properties owned for 28 to 44 years and 12 properties owned 21 to 28 years also were sold at a profit. In the 28- to 44-year bracket, the profit margin ranged from 127% to 907% for an average 396%. The highest profit margin went to a home purchased for $75,000 in 1976 and sold for $680,000 earlier this year. A home purchased for $612,000 in 1988 sold this year for $780,000.
In the 21- to 28-year bracket the profit margins for 12 properties ranged from 120% to 376% for an average of 226%. A home purchased in 1993 for $167,500 was foreclosed on and sold for $630,000, an increase of 376%. A home purchased in 1991 for $754,000 was sold this year for $902,000, an increase of 120%.
Twenty-one homes fell into the 14- to 21-year bracket, selling for an average of 148% above their original purchase price. All but three sold for more than their owners paid for them: two sold for less and one sold for the same price.
A home purchased in 1999 for $413,000 sold for $750,000 this year, an increase of 182%. On the flip side, a home purchased for $646,000 in 2000 was foreclosed on for $449,375. The other home sold at a loss was purchased for $450,000 in 1998 and sold for $395,000 this year, 88% of its purchase price.
The next group of properties was purchased eight to 13 years ago and is a mixed bag, but with most on the losing side of the financial equation. This time period reflects the housing bubble of the early 2000s when real estate prices shot up rapidly and the ensuing recession when that bubble burst.
The average sale price for a single-family home in Wilton in 2002 was $783,777, climbing to $1,018,776 in 2004 when 332 single-family homes were sold; 122 for more than $1 million. Prices continued to escalate in 2005 with an average sale price of $1,097,836 and 134 homes selling for more than $1 million, and higher still in 2006 when the average sale price was $1,117,973, with 99 homes going for more than $1 million.
So far this year, 20 homes have reached the $1-million sales plateau and the year could finish with about 50 homes reaching that mark, according to John DiCenzo, executive director of sales for Westport and Wilton at Halstead Real Estate.
The home that performed the best in this bracket was a condo purchased in 2010 for $450,000 and sold this year for $524,000, an increase of 117%. Three of the other 23 properties in this bracket also sold for more than they were purchased for.
At the other end of the spectrum, a home that was purchased in 2006 for $2,720,000, just before the recession hit, was sold this year for $1,447,500, just 53% of its purchase price. Next was a house at the other end of the price spectrum, purchased in 2007 for $612,500 and sold for $368,000 this year, 60% of its purchase price.
The greatest number of homes sold this year — 26 — were also those owned for the least amount of time, one to seven years. This was also a mixed bag, with 15 selling for more than their purchase price, two selling for the same price, and nine selling for less than they were purchased for.
The house that performed the best was purchased in 2012 for $215,000 and sold this year for $488,000, an increase of 227%. Also with a high return was a home purchased in 2012 for $385,000 and sold this year for $740,000, an increase of 192%.
The home with the lowest return was a foreclosure, which a bank purchased for $14 million and then sold for $7,600,000. Next was another high-priced home, purchased in 2014 for $1,965,000 and sold this year for $1,499,000, 76% of what the seller paid for it.
When asked if there was any rule of thumb for how long it should take a homeowner to profit from their investment, DiCenzo said that is all based on market dynamics.
“Anyone who bought prior to 2002 is holding equity,” he said. The market has been correcting back to 2003-04, he added, and for people who bought high, waiting for prices to catch up can be frustrating.
“If value is present and it’s been updated, a house will move,” he said.
A factor to keep in mind, he said, is that since 1997 buyers in Connecticut have been represented by agents who coach their clients on home values, run analyses, and offer price opinions. With a plentiful supply of homes on the market — about 250 — buyers can take their time and be choosy.
In the early 2000s, DiCenzo said, sellers behaved accordingly, turning down bids when a better offer came along the next day.
What lies around the corner? No one knows.
“The biggest factor is jobs,” DiCenzo said.