Hartford Business Journal

8 Hartford Business Journal • March 14, 2016 www.HartfordBusiness.com FOCUS RESIDENTIAL REAL ESTATE High-end home sellers need patience as buyers push for value By John Stearns jstearns@HartfordBusiness.com J oyce Talbot knows her meticulous, updated Glastonbury home sit- uated on about 2 acres and surrounded by apple trees will sell in time — she just has to be patient. Her house, with a $1.075 million price tag, has been on the market for about nine months, not uncom- mon for luxury proper- ties in Greater Hartford, which are taking longer to sell than lower-priced homes, realty experts say. Regional sales of high-end homes are also lagging the broader market. "I wouldn't say [luxury homes] are sitting on the market — but they're taking a little longer to sell," said Margaret Wilcox, who has Talbot's home listing and is Realtor and team leader at Margaret Wilcox & Associ- ates at William Raveis Real Estate in Glastonbury. The median days on market for homes sold in Hartford County last year was 48 days, but for homes priced at least $1 million, days on market totaled 111. Talbot got an offer early in her listing that she and her husband, Rod, rejected, thinking it was too low, but "hindsight's always 20-20," she said. They lowered the asking price by $125,000 in November and, as Wilcox said, are waiting for the next right offer. "Just have to be patient," said Talbot, who's retiring with her husband to Florida to be closer to their son, daughter-in-law and future grandchildren. Her home was built in 2002 and has been well maintained, she said. While Connecticut's broader real estate market experienced higher sales in 2015, luxury home sales were generally flat last year: 55 homes sold for $1 million or more in Hartford County, compared to 56 a year earlier, and 340 homes sold for $600,000 to $999,999, down from 366 in 2014, according to statistics provided by Joanne Breen, broker/owner at ERA Sargis-Breen Real Estate in Newington and Ber- lin and president of the Greater Hartford Association of Realtors. The towns of Avon, Farmington, Glastonbury, Sims- bury and West Hartford account for the bulk of sales in each price category in Greater Hartford. What's considered a high-end home in Greater Hart- ford is somewhat subjective and varies by location, start- ing at $500,000 or $550,000 in some towns and $600,000 and up in others. Clearly, $1 million and up qualifies. John Lepore, a Realtor in the West Hartford office of Berkshire Hathaway HomeServices New England Properties, who sells a lot of high-end real estate and last year held the distinction for most dollar volume sold in Greater Hartford at almost $50 million, considers $1 million and up high end, and $750,000 and up higher end. He sold the most expensive home in Greater Hartford last year, at $3.5 million in Farmington. He said the high-end market is seeing more buyers and higher sales in 2016, but flat pricing. In other words, buyers are getting a lot for their money. "That's what people want today — buyers want value," Lepore said. "Since 2008 they've really focused on value." Lepore said he's noticed more buyers not wanting to or not having the time to deal with renovations; they generally want move-in ready homes. They want things done and will pay more for that, he said. He's hopeful, with a continued environment of low interest rates and prices that have declined or stagnat- ed, that sales of high-end homes will tick up this year. He likes the activity he's seeing so far in 2016, but is cau- tious about whether prices will rise. "[Homes] have to be priced aggressively and buyers want a value and then your house will sell," he said. Wilcox, too, is cautious about home prices rising anytime soon in the luxury segment. Q&A Home buyers not influenced by rate uncertainty Q&A talks about the mortgage-lending landscape with Simon Tahan, senior vice president, director of mortgage lending at Web- ster Bank. Q: Mortgage loan rates have been falling recently, despite the Fed's decision to increase U.S. interest rates at the end of last year. Why is that happening? Do you expect mortgage rates to continue to decline in 2016? A: Volatility in international financial markets has led to a "flight to quality" in U.S. Treasury securities, pushing yields on the bench- mark 10-year Trea- sury note to their lowest levels since the first quarter 2015. Nor- mally as the 10-year rate goes, so goes the 30-year mortgage rate, as has happened in recent weeks. The expectation is that as international markets stabilize, including commodity prices, we should see a return to a rising-rate environ- ment on government- issued debt and hence mortgage rates. Q: Has the Fed's decision to increase inter- est rates slowed or hastened home-buying decisions? Will more home buyers who have been on the fence about a deal decide to make a purchase now, fearing the Fed will con- tinue to boost interest rates in the years ahead? A: The general public is not influenced by the moves of the Federal Reserve, but rather by economic realities on the ground: wages, ability to save, affordability, cost benefit of rent- ing vs. owning and life stage of the borrower, as well as overall confidence for the future. Q: Where do you see the most demand coming from for mortgage loans? Who's the typical borrower these days? A: Repeat buyers who have been able to recoup their lost equity from the economic down- turn are now ready to move up or downsize. The first-time buyer has yet to return completely to the market. Millennials are burdened with student loan debt and have a set of values in which homeown- ership is less important than with previous cohorts; underemploy- ment and wage stagnation remain an issue for millions of Americans. Q: How does a lender like Webster gear-up for home- buying season? Do you unveil special promotions or new products to garner increased interest among borrowers? What avenues are most effec- tive in garnering leads? A: Webster does significant outreach during the peak home- buying season including our spring Realtor call- ing campaign, home- buyer open houses in our banking centers, and home- buyer seminars in partnership with our banking centers as well as community organizations. Q: What is the competitive land- scape in Connecti- cut in terms of mortgage lending? Are there fewer or more lenders in this space today com- pared to five years ago? A: The overall number of participants has declined since the economic downturn due to consolidation and a reduction in the number of mortgage brokers. However, new participants continue to emerge as nonbank lenders continue to view the affluent Connecticut market as fertile ground. Q: There are some who say commercial banks' aversion to risky borrowers means nonbank lenders will be the future of mortgage lending? Do you agree with that state- ment? Why or why not? A: The ability to manage risk is inherent in all prudent lend- ing. The regulations on ability to repay and qualified mortgages, for the most part, leveled the playing field from a basic risk- management perspective — as long as there can be clarity from our regulators regarding enforcement, as well as clarity around risk of repurchase from the agencies. It is fair to say that while we have turned a corner, the regulatory environment continues to remain dynamic, evolving, and has yet to reach a state where there is a high level of predictability. n SIMON TAHAN Senior vice president, director of mortgage lending at Webster Bank Margaret Wilcox, Realtor and team leader at Margaret Wilcox & Associates at William Raveis Real Estate in Glastonbury, shows a home she has listed for $1.075 million in Glastonbury. Check out a video clip of Margaret Wilcox's interview at hartfordbusiness.com. Active listings $600,000-plus (as of March 3) Avon 74 Farmington 64 Glastonbury 51 Simsbury 23 West Hartford 45 S O U R C E : M I C K I G E B H A R D T, S E N I O R S A L E S M A N A G E R , W I L L I A M R A V E I S R E A L E S TAT E , G L A S T O N B U R Y High-end, single-family homes sold in Hartford County: $600,000–$999,999 2014: 366 2015: 340 $1 million-plus 2014: 56 2015: 55 S O U R C E : J O A N N E B R E E N , B R O K E R / O W N E R A T E R A S A R G I S - B R E E N R E A L E S T A T E I N N E W I N G T O N A N D B E R L I N A N D P R E S I D E N T O F T H E G R E A T E R H A R T F O R D A S S O C I A T I O N O F R E A L T O R S , C I T I N G C O N N E C T I C U T M L S R E A L E S T A T E T R E N D I N D I C A T O R H B J P H O T O | J O H N S T E A R N S

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