April 11, 2013
A new breed of buyers and sellers in region's housing market (The Connecticut Post)
By Rob Varnon

At a recent open house in Stamford last month, 100 people came through the door, said Silva Christov of Keller-Williams Prestige Properties.

It's proof that buyers are back in the southwestern Connecticut residential housing market, a fact also reflected in sales statistics and a sense of growing optimism in the real estate industry.

But the players in today's market are different than those who drove up housing values in a frenzy prior to the collapse of the real estate bubble five years ago, real estate experts say.

They are wiser, more cautious and, in many instances, poorer. Whether buyers or sellers, they fall into some distinctive categories.

Let's meet them. First, the buyers.

[...]

The Gottas
This group is a mix of institutions and people. While there have always been sellers who moved out of state and had to sell, the ranks of this group are swollen by banks or municipalities that have foreclosed on properties and by owners selling short because they can't afford the mortgage.

Statistics tell the tale here. California-based CoreLogic, a real estate data-gathering firm, says the foreclosure rate in Fairfield County is still among the highest in the nation, with 4.32 percent of all mortgages in some state of foreclosure. The national rate is 2.9 percent.

In southwest Connecticut, 50 auctions on foreclosed homes in 14 communities are scheduled for April, according to the state Judicial Branch website's listing of court-ordered sales.

Bridgeport remains the epicenter of the county and state for foreclosures with 20 auctions set for April. Danbury and Norwalk each had five scheduled, tying for the second most.

Foreclosure activity which had waned in recent months, surged upward in March, increasing 52 percent, according to RealtyTrac.

That surge could dampen recent gains in prices when combined with short sales that continue to come onto the market. Short sales are occurring, not just because the banks already have too much property on their books but because of a national settlement.

Five of the nation's largest banks agreed to settle allegations they mishandled millions of mortgages with 49 states, including Connecticut. As part of that settlement, they agreed to provide relief to distressed borrowers who are paying mortgages they cannot afford.

According to an independent monitor of the banks' efforts, between March 1 and Dec. 31 of 2012, the five financial institutions agreed to 1,141 short sales in Connecticut. As part of the deal, the banks forgave any outstanding loans not covered by the purchase price of the sale.

The Wannas
Unlike people and groups that have to sell, these are people who have put their homes on the market because they want to move. They are often people who bought more than a decade ago, before the jump in prices, and they have a lot of equity.

Most are retiring and moving to smaller places, but there are indications that an increasing number of sellers are putting smaller homes on the market to go after larger ones because prices have come down.

These are savvy sellers who do not have to jump at the first offer and who are placing reasonable listing prices on their homes, according to real estate agents.
Susan Corleto, an agent with William Pitt Sotheby's International Realty, held an open house on Whitewood Road in a Newtown neighborhood during the St. Patrick's Day weekend.

Houses in the development were built 15 years ago, Corleto said, and some of the first and second owners are now ready to downsize after raising their children.
"This is a destination neighborhood," she said. The homes are around 4,000 square feet and sit on about two acres of property in a quiet section of town.

The house on 37 Whitewood, where she was holding the open house, was priced at $799,000, far less than the nearly $1 million a home like this would be listed at six years ago, she said.

Likewise, Jan Woodward, a Prudential Realtor who represented the seller to Connie Schumacher, said her client was retiring and moving years after inheriting his house.
She said her client had already bought a home in Oxford and was living in it, so it was unnecessary for him to sell before moving.

The MIAs
Technically this group -- those missing in action -- represents both buyers and sellers. In the past, it was a big component of the real estate market in southwestern Connecticut.

During the boom, these were the people who would buy a home, do some work on it and flip it for a nice profit in a month or two because there were so many buyers in the market. But when the bust happened, that business dried up.

Josh Hollander, vice president of sales and marketing for William Raveis Mortgage, said he doesn't expect those flippers to come back any time soon. The climate of over-exuberance that existed a decade ago isn't present in what so far has been a traditional market, he said.

There are also sellers missing, and you can really see that in the declining amount of inventory, according to Kent Hanley, executive vice president of William Raveis Real Estate.




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