Posts Tagged ‘home prices’

Low Mortgage Rates, Low Prices – So Where Are The Buyers?

There’s very little debate over the fact that this is a “Buyer’s” Market” right now.  The thing is that this time around it’s a little different than in past market cycles.  There are plenty of homes to choose from, prices are low (still declining in many areas) and interest are as ever.

By all rights, there should be lots and lots of people buying houses right now.  There aren’t!  There are buyers and they are buying houses but not at the pace that the market conditions should justify.

Why not?

Here’s a short video that may be helpful in understanding part of the reason.


Video Tour of Bethel CT

If you haven’t had a chance to drive around and see the sights in Bethel CT, here’s your chance.

There are currently 157 single family and condominiums for sale in Bethel.


Rick Schwartz,   REALTOR

Homes for sale in Danbury, Bethel, Brookfield, Newtown, New Fairfield, New Milford, Ridgefield and Redding CT.

Where Will The Jobs Come From?

I know, I know, I’m not an economist, I’m a Realtor. My expertise is in helping people buy and sell houses in CT, so why am I writing about job creation?

Well, the sooner employment turns around, the sooner the housing market will get back to normal – whatever normal is. As my clients who want to buy and sell houses in the Danbury CT area are able to  take part of this new job growth it should provide them more opportunity to find the right homes.

I came across this report from The Kauffman Foundation regarding their opinions on what areas are going to provide jobs for America over the next couple of years.


Rick Schwartz,   REALTOR

Homes for sale in Danbury, Bethel, Brookfield, Newtown, New Fairfield, New Milford, Ridgefield and Redding CT.

How Much are closing costs in Fairfield County, CT

February 12, 2010 Leave a comment

One of the questions that comes up a lot when I’m working with clients is about how they can estimate the “closing costs” involved in the purchase or sale of a home.

Since these costs generally run in the thousands, having a feel for the total can be important when shopping for a home to guide you into the right price range.

Closing costs, broadly defined, refer to all money that must be paid at the time of closing, or transfer, of real estate. There are a lot of components, including things like:

  • Loan origination
  • Points
  • Title Search
  • Transfer Tax
  • Appraisal Fee

just to name a few.

The doc below will give you a guide that you can use high level planning.  It is not intended to be a representation of specific costs that pertain to your individual transaction.   Once you have a specific home in mind your lender will be able to provide a Good Faith Estimate of the closing costs that will apply to you.


Rick Schwartz,   REALTOR

Homes for sale in Danbury, Bethel, Brookfield, Newtown, New Fairfield, New Milford, Ridgefield and Redding CT.

Should you make a verbal offer when buying a house?

January 18, 2010 Leave a comment

This, as most of my posts, originates from conversations with real clients.  This one comes up with some degree of regularity.

We’re going to start with my favorite, fictitious, $100,000 house.

You’ve been looking for a while and have settled on this house is your first choice – or it would be your first choice except that you can’t or won’t pay the asking price – or anywhere near it.

You and your significant other have decided that you would love to purchase this house IF you can buy it for $80,000.

So you talk to your Realtor and he says “OK, let’s make the offer.”

You reply  –“Well, we were thinking that  since it’s pretty low, perhaps you could just do a verbal offer – you know, just ask if the seller would be willing to sell for that amount before we go through all the trouble of doing paperwork, etc.”

My advice to clients at this point is simply that if you want to make an offer, we should do it formally in writing since a verbal offer isn’t really an offer.

A verbal offer is not an offer – it’s an inquiry.

A written offer is a statement: Mr Seller, I would like to buy your house. Here’s what I’m willing to pay. Here’s my signature. I’ve given my Realtor a good faith deposit, which he is holding.

A verbal offer is a question:  Mr Seller, would you be willing to accept an offer for this price?

A written offer tells the seller that you actually want to buy the house.  A verbal inquiry tells the seller that you might consider buying the house. Which do you think holds more weight?

When you proffer an inquiry, you are putting the seller in the following position. By saying yes, he knows that you might then come back and offer an even lower price, in order to test his “bottom line”.  So while it is possible that he’d be wiling to take the $80,000 offer, he has no reason whatsoever to let you know that when you haven’t made any commitment.

Making a commitment gets you a better price

Suppose you were having a yard sale. One item is an armchair which is in good shape but it has torn upholstery.  You put a price tag on it for $30.

Harry comes up to you at the sale and says “Would you take $25?” I just have to drive home and get my check book.  I’ll be back in 30 minutes.

Joe comes up and says “I’ll give you $20”.  He pulls out a 10 and two fives.

Who are you going go sell to?

You know darn well than Harry hasn’t really made a commitment.  If he does come back at all, he’d be foolish not to try an even lower price, like $15 or $20.  He already knows you’ll take $25, so why wouldn’t he want to try for an even better deal?

Pretty simple when you think about it.

MORAL: If you want to make an offer – make an offer.

A Real Estate Carol: Ghosts of Prices Past, Present and Yet May Be!

January 1, 2010 1 comment





John and Mary decided in the fall of 2006 to move.  The house they were in was old, and had too many steps for John’s aging knees.  They did some fixin’ up and put the place on the market in early 2007.

One of their neighbors who had a similar house two doors down had sold in the summer of 2006 and received $430K.

Their Realtor told them that prices had dropped a little in their market and they should list it at $425 and be prepared to come down a bit.  Mary and John were concerned by this.  They felt that their house was at least as nice as the neighbor’s and that they did not think they should take “a loss”.

The Realtor, who knew that they had bought the house about 10 years earlier for $325, didn’t seem to agree that if they sold for $420 it should be counted as a loss.  In fact, she said, if you sold for $420, you’d be making a considerable profit.

Mary said “But if we had sold last summer we would have gotten more!”

The Realtor said “But you didn’t sell last summer?”

Mary: “Well, should we wait until prices come back up?”

Realtor: “I can only answer that if you can tell me when they will go up?”

Mary and John:  “HMMMmmmmmm

So Mary and John listed the house for $425 and in about 45 days sold it for $415.

They bought a new house in a different town about 20 miles away.  It was actually a bigger place but because it was a little farther out from the big city, the market was priced lower.  They bought it for $375.

With only a very small mortgage left on their original house, they were able to put $300 down on the new house and mortgage $75

As we move into 2010, home prices have NOT rebounded, in fact, they’ve continued to drop.  The home they bought in 2007 is now valued at $300 based on recent sales in their new neighborhood.



Mary said “But if we had sold last summer we would have gotten more!”

The Realtor said “But you didn’t sell last summer?”

Mary: “Well, should we wait until prices come back up?”

Realtor: “I can only answer that if you can tell me when they will go up?”

Mary and John: “HMMMmmmmmm”

So Mary and John held on to their house, waiting until the market came back.  As of the beginning of 2010 it had not, in fact, prices continued to drop.

In January of 2010 John had had it with the stairs.  He told Mary they needed to sell now – even if they had to give the place away.

So they called their Realtor who, after doing a Market Analysis, told them that their home should bring between $330 and $340.

They listed it at $349 and after 45 days sold it for $340

After looking around they found a new home in another town (the same home in the first part of the story).  They purchased it for $305.

Since they had a very small mortgage on the house they sold, they were able to put $235 down and had a mortgage of $70.


So – if you put aside unimportant things like sale price and market value – at the end of the day,  in both scenarios John and Mary leveraged the equity in their home to buy another home that they liked better – and they ended up with virtually the same situation – with one exception. In the second scenario, they stayed in the house they didn’t like for three additional years.


The whole thing was just starting now.

  • What if you have a home that no longer fits your needs?
  • What if you decide not to sell it because you are waiting for prices to come back up?
  • What if prices don’t rise, and you stay where you are for years?
  • What if, after that time, you make a move and end up with essentially the same financial situation?

Of course, as in any good space-time continuum story, the future is unwritten. Just ask good old Ebeneezer and he’ll tell you  The Ghost of What Will Be, is actually The Ghost of What MAY Be. Prices could go up or down dramatically in the next three years.

The point, I guess, of my little fable is that if prices go up or down on the house you want to sell, they will likely go up or down proportionately on the house you want to buy – so if you want to make a move, what is it you gain by waiting?

Just some food for thought.

God Bless Us Everyone!

Ugliest House Principle – Will it help you build equity faster?

September 24, 2009 Leave a comment

A little background before we start on the subject of ugly houses.

Real Estate Markets are very, very local – so this article is based on recent experiences with clients who are buying homes in Danbury, buying homes in Bethel, buying homes in Brookfield and buying homes in New Milford.

Our MLS system in Greater Fairfield County, CT, showed 11 homes the other day with price increases.  There were many more than that where the prices are being reduced so I can’t conclude that we are now in an appreciating market but…. although they are a bit confusing there some signs out there that we may be climbing out of the bottom.

The challenge for sellers over the last few years has been coming to grips with the fact that their home isn’t worth what they would like it to be. Soon, the real challenge may be for buyers.


The challenge for buyers recently, has been that they don’t want to buy until we are “AT THE BOTTOM”.  Many people, who need to move for a variety of reasons, don’t want to buy a house until they are sure that it will not continue to fall in value.

People are staying in their existing homes or apartments much longer they would probably like to because they only want to buy when their new house is going to appreciate.


It’s all about individual preference, I suppose.  Shereen and I bought our condo in June of 2007.

It is now September, 2009 and the value of our home is down roughly 14%.   While we’d certainly like it if the value had gone up, we can’t even begin to express how much happier we are living where we do, than living where we were. It’s a much nicer, newer, bigger place and we are loving it.  Had we held out for the bottom, we’d still be living where we were – all stressed out, waiting to move until the market changed.

In the end, if we’d put off our move until today, more than 2 years later, we’d probably have sold for 15% less than we did, so we’d have spent 2 more years wanting to move and we wouldn’t have made out any better financially.


My loyal Blogosphere fans have heard me talk about “the bottom” before, specifically that we are not going to know where it is until we can see it in our rear-view mirrors.

Having said that there are many who are saying that homes in the Danbury, Brookfield, Bethel area, might just be at the bottom. The challenge with hitting the bottom, is that the turning of the market is not going to be clear cut.  It will be a series of little dips, climbs, more dips and then a steady, if slow climb.


Finally – back to the topic at hand.

Lately, I’ve had a number of buyer clients who have asked me about the “Ugliest Home Principle”.    In Real Estate Lingo we call this the Principle of Progression.  The counter to it is the Principle of Regression. Here’s what they mean in simple terms.

The Principle of Progression says if you have the most modestly valued home in a neighborhood of higher priced homes, your value will move closer to the value of the higher priced homes.  In a down market, your home will drop more slowly and in an up market your home will rise more quickly.

The Principle of Regression says that if you have the highest valued home in a neighborhood of lower priced homes, your value will move closer to the more modestly priced homes.  In a down market your home will drop more quickly and in an up market your home will rise more slowly.

Before we talk about the actual financial wisdom of this, you first need to answer to yourself the following two questions.

  1. When you find this ugly, small, low value home, willl it suit your life needs in terms of size, bathrooms, bedrooms, location etc.?
  2. Will you be happy living in the ugliest, smallest, lowest value home in the neighborhood?

If you can honestly answer “YES”,  then let’s look at the principles themselves and consider if they hold true.


The answer is that they both Progression and Regression do work – but there are a couple of caveats.

First – they work best with a new home.  If there is a neighborhood of 3000SF, 4BR 2.5 Bath Colonials on 1.5 acres and you build a 1500SF Hi-Ranch with 3BR  1.5 baths on .35 acreage, your house will likely appreciate faster than if you built the same one in a neighborhood of other modest hi-ranches.

If the neighborhood has been around for 20 years and are looking to buy that 1500SF Hi-Ranch that was built 15 years ago, you have to keep in mind  most of the Progression has already happened.  Remember, the value of the modest home gets “closer” to the value of the higher-priced homes but it they’ll never be equal. It doesn’t keep going up forever.

Secondly, let’s assume that the “ugly” home is only 5 years old and the value has gone up – here’s the catch.  The person selling the home also knows about this principle and guess what – HE wants to take the increased equity. This is not a secret plan that only you know about. So you’re not going to “trick” the seller into selling below market value and then magically gain the value from Progression.


As a Realtor this is the question I always ask my buyer clients to consider carefully before deciding what home to buy?

Most often, people are moving to accommodate some change in lifestyle.

  • Moving up for a growing family
  • Downsizing after empty nest syndrome kicks in
  • New job – new commute
  • Moving into a town that suits you better

or a hundred other reasons.  The thing is you have to keep those reasons in mind. If you are choosing a house for lifestyle reasons but overlay that reason with wanting to buy a house that is going to gain equity the fastest, you will have to compromise somewhere.  You can’t serve two masters and get what you want.

Pick the investment avenue or pick the lifestyle avenue and move in the direction that you think is most important to you. After narrowing down the choices, you can compare the short list in terms of the “other master” and see how close you can come.

Be true and honest with yourself about why you want to move and let your Realtor help you find the home that suits your personal needs.