The Danbury News Times had an article earlier this week titled Home Sales Bubble Bursts.
In this article, they include information such as:
- "Danbury-area real estate numbers show the region has not been immune to the slowdown"
- "Home prices have dropped about 10 percent in the region"
While our market may not be as "hot" as it was in the recent past, there has certainly not been a "Bubble Burst" as the newspaper editors would have you believe.
To verify the accuracy of this article, I ran some numbers on the Consolidated MLS, comparing First Quarter 2006 (1Q06) closed sales of single family homes to First Quarter 2007 (1Q07) closed sales, also of single family homes. Here is what I found:
Fairfield County Real Estate Sales:
1Q06: 1,464 closed sales with a median price of $530,000
1Q07: 1,395 closed sales with a median price of $535,000.
Hmmm...where's the 10% price drop?
New Fairfield, Connecticut Real Estate Sales:
1Q06: 29 closed sales with a median price of $375,000
1Q07: 29 closed sales with a median price of $462,500.
Hmmm...this appears to be an increase in median sales price to me.
Danbury, Connecticut Real Estate Sales:
1Q06: 91 closed sales with a median price of $360,000
1Q07: 82 closed sales with a median price of $338,750.
Less than a 6% decline in median sales price. Why? Could it be that fewer lakefront homes sold? Fewer new construction homes sold? Or perhaps many more entry-level homes sold?
I could run these numbers town-by-town for the whole region. Some would show a decline, and some would show an increase in median prices of closed home sales. Some would show more sales this year, and some would show fewer sales. This, to me, does not indicate a bubble burst. Rather, it indicates a look at two different 90 day periods. That's all.
Most importantly, what do these numbers mean to you, a homeowner considering selling your home?
Each home is unique. Each situation is different. Trends are just that: Trends. Nothing more, nothing less.
Statistics are just that: Statistics. Are they useful? Yes, but only as a general indication of the market as a whole.
What is more important is the current market value of your home. Yes, your home's value is determined by neighboring sales, and these sales will be reflected in the above-mentioned trends. But when preparing your home for sale, we will look at your home and the recent sales that are comparable to your home. We won't look at trends for the entire region, and we certainly will not look at what lines editors use to sell papers.
Home prices fluctuate. That's a fact.
Look at the specifics for your home. Don't let the mass media's reporting scare you. Work with real numbers and real data that pertain to you and specifically your home, work with a thorough marketing plan, and successfully sell your home.
Don Fabrizio-Garcia, REALTOR
Connecticut Real Estate & Appraisals
Connecticut Real Estate and Homes for Sale