HOUSING PREDICTIONS for 2015 via Realtor.com

2015: Year of the First-Time Home Buyer

The predicted increase of employment opportunities & lower fuel prices will enable younger buyers to enter the home-owning market.

Realtor.com®’s top five housing predictions for 2015 are:

1. Millennials to drive household formation. The forecasted addition of 2.5 million jobs next year, as well as an increase in household formation, are the two factors that realtor.com® points to in driving more first-time home buyers to the housing market.
2. Existing-home sales on the rise. Existing-home sales are projected to rise 8 percent year-over-year in 2015, as more buyers enter the market. Distressed properties will make up a smaller share of that growth, unlike in 2012, when a similar increase in existing-home sales was mostly driven by distressed properties.
3. Home prices will rise. Home prices are expected to continue to edge up in 2015, with realtor.com® forecasters predicting a 4.5 percent gain. “While first-time home buyers have many economic factors working in their favor, increasing home prices will make it more difficult to get into high-priced markets such as San Francisco and San Jose, Calif.,” realtor.com® notes in its report. “As a result, first-time home buyer activity is expected to concentrate in markets with strong employment and affordability, such as Des Moines, Iowa; Atlanta; and Houston.”
4. Mortgage rates to inch up to 5 percent. In the middle of 2015, mortgage rates are expected to increase as the Federal Reserve increases its target rate by at least 50 basis points before the end of the year. That will likely bring the 30-year fixed-rate mortgage to an average of 5 percent by the end of 2015. (It’s currently averaging 3.89 percent, according to Freddie Mac.) The 1-year adjustable-rate mortgage, on the other hand, is expected to rise more minimally. “Lower ARM interest rates will influence an uptick in buyer interest for adjustable and hybrid mortgages,” realtor.com® notes. “While still at historic lows, rate increases will affect housing affordability for first-timers trying to break into the housing market and will be another factor pushing them to less-expensive locales.”
5. Housing affordability will decline. Affordability for homes, based on home-price appreciation and rising mortgage interest rates, will likely fall by 5 to 10 percent in 2015. However, the decline in affordability likely will be offset by an increase in salaries next year for many households. “When considering historical norms, housing affordability will continue to remain strong next year,” realtor.com® notes.

Source: realtor.com®

Current MARKET Report for New London County

According to the CTMLS database, Residential Sales totaled $71,566,393 within New London County for the month of October.

There were 300 Residential Closings in the month of October (which is up from 254 Residential Closings which took place last October).

The median (3 bedroom / 2 bathroom) home listed for $195,900 and sold for $188,000.   The ADOM (Average Days on the Market) was 71 days.

Residential Property Closings for October (by Town):

        Town                 2014               2013                                                                            

• Bozrah                           4                          3

• Colchester                   13                       17

• East Lyme                    34                       29

• Franklin                          1                        0

• Griswold                       14                        8

• Groton                          37                       26

• Lebanon                        6                         5

• Ledyard                       18                        22

• Lisbon                            6                         4

• Lyme                              3                         1

• Montville                      22                       22

• North Stonington        3                        6

• New London                17                       15

• Norwich                       34                        33

• Old Lyme                     16                        10

• Preston                          4                         1

• Salem                             2                         4

• Sprague                         2                         3

• Stonington                   29                       19

• Voluntown                      1                        1

• Waterford                     34                       22

Since the beginning of the year until October 31, 2014 there were 2,385 Residential Closings within New London County.     (From January 1, 2013 thru October 31, 2013 there were 2,290 Residential Closings within New London County.)

Residential Closings have steadily risen over the past four (4) years between January 1^st through October 31st!  (Residential Closings = ‘11 – 1,755    ‘12 – 2,003 – ‘13 – 2,290 – ‘14 – 2,385)

The market continues to be favorable for buyers, with low interest rates.

Rates – National Averages   (11/18/14) Type Rate Yield 30-Year Fixed  3.99%    4.10% 15-Year Fixed  3.10%    3.28% 1-Year Fixed  2.64%    2.91% Jumbo 30-Yr Fixed  4.17%    4.27% 30-Year Fha  3.58%    3.76% 5/1 Arm  3.22%    5.13% 5/1 Jumbo Arm  3.44%    5.72% Data provided by:

New London County – 3rd Quarter (July-Sept ’14) Market Update

Prices of homes have stabilized.  The quantity of homes have increased, yet the duration of the homes staying on the market are declining, which makes it the perfect environment for “Buyers”.   (Please click on this link for an example of today’s current interest rates!)

The towns within New London County, CT are:  Bozrah, Colchester, East Lyme, Franklin, Griswold, Groton, Lebanon, Lisbon, Lyme, Montville, North Stonington, New London, Norwich, Old Lyme, Preston, Salem, Sprague, Stonington, Voluntown, & Waterford.

Over the past few years New London County has seen a steady incline of residential ‘Closings’, annually within the 3rd quarter.   According to CTMLS, the amount of ‘Closed’ residential, homes have increased over the past four (4) years.  There were 597 closings in 2011, 664 in 2012, 787 in 2013, and 831 in 2014.

The statistics of the individual towns during third quarter vary within New London County.  The average number of residential homes sold per town over the past 3 years vary from 2 (Bozrah) to 98 (Groton) during the third quarter.

The average current sales price in 2014 also varies per town.

• Bozrah – $171,000
• Colchester – $218,100
• East Lyme – $311,500
• Franklin – $229,600
• Griswold – $173,400
• Groton – $257,800
• Lebanon – $245,600
• Ledyard – $212,300
• Lisbon – $206,600
• Montville – $160,400
• Mystic – $353,900
• New London – $195,300
• Norwich– $116,200
• Old Lyme – $414,000
• Preston -$221,600
• Salem – $234,200
• Sprague – $187,600
• Stonington – $371,300
• Voluntown – $166,600
• Waterford – $268,900

The average home sale price in both Waterford & Mystic have risen around 15% since 2013.