April 26, 2013
Spring Housing: Rise In Sales, Low Inventory Bring Back The Bidding War (Hartford Courant)
Bidding wars are back.

As the spring home buying season heats up in Connecticut, buyers are increasingly finding themselves locked in multiple bidding wars, a phenomenon not seen widely since before the housing recession, realtors and economists say. A year of strengthening sales in the state has whittled away at choices. So, when an attractive property comes on the market, buyers--especially those that have lost out on another house--aren't waiting.

"This time, they are ready to pounce," said John Zubretsky Jr., president of Weichert, Realtors-The Zubretsky Group in Wethersfield.

In the Hartford area, the competition is particularly fierce for mid-range properties, from $300,000 to $600,000, and lower-priced properties aren't far behind, realtors say.

Julia Pon and her husband, Steven, learned that lesson quickly after becoming embroiled in a multiple bid situation on a West Hartford home in March. The couple had rented in Columbia for a couple of years but after having a baby in January, they wanted a house closer to shopping and other services. They were willing to spend from $300,000 to $400,000.

"Once we decided we were going to buy, and you start looking, there's no time," Pon said. "We usually like to take time to make decisions. This was a little out of our comfort zone."

The couple learned from their real estate agent that a colonial near the center of West Hartford was coming on the market on a Friday with an asking price of $350,000. It had everything the couple wanted: a quiet street that wasn't a cut-through, an updated kitchen and a walkout basement.

The Pons offered to go as high as $360,000. By Saturday, there were four offers and a day later, seven. The owner didn't want to negotiate back-and-forth and asked for final offers late Sunday. The house was sold at 5 p.m. that day. The Pons came in second, behind another bidder who offered more.

"You have more time to buy a car," Pon said.

The spring home buying market is traditionally the busiest of the year and could, in 2013, jumpstart the state's housing recovery, which has lagged much of the nation. Bidding wars are being fostered by the slow trickle of new listings. Certainly, not all properties are selling above the asking price or are the target of a bidding war; many are closing below what sellers were seeking.

But real estate agents say activity picking up at the lower end of the spectrum is encouraging, though higher-priced homes--those $600,000 and above--are generally sitting on the market longer.

Janet Morrison saw that where she lives in North Haven. She wanted to downsize to a smaller house and listed her newly-renovated Colonial last fall for $629,000. It sat for months without a bite and, after the holidays, Morrison dropped the asking price to $599,000.

When Morrison did get an offer on her home this spring, she placed a bid on another house and found herself unexpectedly going head-to-head with another buyer. The asking price was $359,000, and she offered $345,000. She planned to counter with a higher offer but in just a day, the other buyer agreed to pay the full price.

"It was sold almost under my nose," Morrison said.

The lack of choices among mid-priced houses also is creating a logjam among those in starter homes who want to move up and those in larger homes who want to downsize, experts say.

Stories of multiple bids are heady and can serve as a spark in market yearning for recovery. But for the upturn to gain momentum, the market will need a steady stream of buyers and sellers, said Ronald F. Van Winkle, an economist and town manager of West Hartford.

"The supply needs to open up," Van Winkle said.

Van Winkle said the lack of newly-constructed houses coming on the market has been compounded by cautious would-be sellers. Some of them are waiting it out, believing their properties will be worth more in a year. Others are struggling with underwater mortgages that would benefit from a future with a sustained increase in prices. Still others are simply worried about the stability of their jobs.

In Greater Hartford, Paula Fahy Ostop, a real estate agent at William Raveis Real Estate in West Hartford and other agents believe sellers will come into the market as prices increase, but the bigger, more long-term, concern are potential buyers.

"The thing that is going to determine if we get into recovery is jobs," Ostop said. "That gives people the confidence that five, 10 years from now, Greater Hartford is going to be able to sustain itself."

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