Summary
It easy to think nationally when reading of the foreclosure number increases;the glut of homes and the downward impact on price point when,in fact,there are many regions of the country that have not been as adversely affected by speculator development and inflated land values. Connecticut is one of several states that have weathered the storm and continue to have considerably healthier residential markets.
Analysis
The ‘doom-sayers’ are always there and will always make predictions about the coming collapse of the market and other insurmountable catastrophes, but when rational thought prevails, we recognize that we are simply in a weak part of a traditional business cycle. Yes, these still happen, and this cycle will run its course. In the meantime, one thing is certain: people will continue to move and purchase homes. Connecticut hasn’t been a speculative marketplace and this stands in stark contrast to some other areas of the nation. The state is also not overbuilt with large standing inventories of new homes on the market, another characteristic of other locations nationally. Connecticut is also very fortunate to have an economy that has been performing relatively well.
Looking at the rate of deposit activity in March and very early April, the state of Connecticut reflected an increase in the rate of deposits. For example,as of May 15th there were some 4,600 pending single-family sales and 1,600 pending condo sales. While there may well be some that don’t close, the numbers still look pretty good. There is still a market out there.
We have also been hearing that there is almost a 10-month supply of inventory nationally. When this number is run for the state of Connecticut, on an overall basis, it comes out to about a 5-month supply of inventory on the market. Clearly, even if all of the pending sales do not close, Connecticut is well outperforming the national figure. There have not been significant inventory increases which is certainly more good news.
It is important to understand that Connecticut is not alone in bucking the national trend. New Mexico has also offered encouraging news.
The glass is still half full!
