MY OPINION ON THE LOCAL MARKET AND LENDING CRISIS

So what's going on in the much of the CT Real Estate Market? Well, as most are aware, the lending industry has been turned upside which has created a tumultuous stock market, put more pressure on housing prices, and in a market that has never been better for a one to buy a home, more difficult than ever to obtain a mortgage. I know the latter first hand as my first two sales that closed this year was challenged by lenders.

Both of my buyers had excellent credit, ample down payments, and the home they were buying appraised as expected. So why the trouble? There has been so much wrong doing by predatory lenders, middle men who unscrupulously packaged the loans for sale on the secondary market, they then became AAA rated by Standard and Poor (the fox guarding the hen house) and sold as investments to places like Bear Stearns and other investment banks who are now all in big trouble. Off course all the folks who made money on these loans are not only getting off scott free, the CEO's of the lenders at fault, like the moron who was running Countrywide was rewarded with millions in a parting bonus. Go figure.

Those lenders still standing and making mortgages are afraid of their own shadow and thus are getting at times 2 appraisals, and they're looking very hard at every aspect of the package. My sales did close, it was just very difficult for Fenwick Mortgage who was handling these for the buyers, and added stress to my buyer's life that they didn't need. Then again...who needs stress today?

Condo buyers should note at some lenders are add as much as a 1.5 points to the prevailing residential rate mortgages. Some lender's condo questionnaire are more comprehensive and if there is one answer they don't like the loan is denied! We found that New Alliance is the bank to do business with as of late if your buying a condo.

Rates are continuing to improve for conforming loans while jumbos are costing 1.5 points for most products. Seller's offering mortgage buy down programs can really create a win-win deal for buyers of their homes. Middlesex County's new conforming loan limit is now $470K. So if your home is listed north of $564K, consider a buy down option. Fenwick Mortgage is quite adept at creating a profile that can be used as a marketing feature for your home.

THE NUMBERS

While 2007 finished strong and ahead of 2006, 2008 is showing the signs of the credit crunch. New lending rules and a dearth of stated income and stated asset products has created an even smaller buyer pool. New listings have decreased 2% when compared to last year which is a trend that is welcomed. The number of closings are down 30%. Sales volume fell $30M or 12.5% over 2007. These figures are for residential home sales for both January and February. Deeper discounts from asking prices were noted where at least 9 towns in our service area gave more than a 10% discount. When I look at that a bit closer, many were asking too high a price for the market. What that does is increase selling time, carrying costs, and creates a stigma for the property. That is reflected in the market area absorption rate which jumped from 11 months to now 14 months. The absorption rate is the number of months it would take to sell all existing inventory at the current sales rate if no additional inventory was added. You could also look at this number as the length of time it could take to sell your home. This year so far the average days on the market are standing at about 5 to 6 months, so don't be surprised if agents start asking for 9 or 12 month listing contracts. The numbers show that the average list price per square foot rose when it should have fallen and stands at $252.33, slightly higher than las year. The average selling price per square foot is at $214.09! That's a 15% spread! This is proof that sellers are asking on average 15% more than what the market value is this year.

NEVER A BETTER TIME TO BUY

If you're a buyer, especially with nothing to sell, its the best time in recent memory to step up and make a purchase. Even though there are many "underwater" or "upside down" mortgaged properties, banks are negotiated what we call "short sale" purchases. This means that they are allowing the seller to sell below what they owe rather than to foreclose on the property. There are many bank owned properties out there as well. A lived in short sale property is a safer buy for most because it follows the normal protocols of a sale. Properties can be inspected and you know its a functioning residence. Empty bank owned properties can be plagued with many hidden defects. Those who couldn't pay mortgages could not obviously do the maintenance needed to keep the home up. So in some cases the discount that you get can be less than the repairs and improvements needed to make the home habitable.

ADVICE TO SELLERS

Seller's need to know that there is always a buyer for your home. There is a smaller pool of buyers out there but they exist. To sell your home you need to do more to prepare your home for sale, price it right, and be marketed where you're noticed over the other competing properties. People are still getting married, divorced, having babies, becoming empty nesters, coming to the area, and leaving the area. What we can do for you is offer you professional photography, data to help you price your home right, create the very best print and digital marketing websites, put you in a national listing service to make your property greatest exposure, give you the service of 3 full time agents instead of 1 (and for the price of 1), and promise you that we'll be present to show your home to prospective buyers instead of putting your home on automatic by putting a lock box on your home.

No one can guarantee when and for home much your home will sell for, but we can guarantee to give you the best possible chance to do so. If you're in a situation where your "underwater" with your mortgage, call us or visit: http://www.CTShortSaleInfo.com and we'll help you get out from under with dignity and without foreclosure. We are experts and professionals available from 8am to 8pm everyday of the week.