A Real Recovery
Much like the effort to push a boulder up a hill, Stamford’s housing market over the past several years has struggled, gaining several inches only to roll back a few.
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“2013 was very hot. We’ve seen a major shift,” says Melanie Healey, the owner of NewBridge Properties, a real estate brokerage firm.
Although investor purchases explain some of the activity, home and condo sales are also being driven by people relocating to work for companies like NBC Sports Group, which cut the ribbon on its new Blachley Road headquarters last spring; 600 people work there, according to NBC, which is among several businesses to have set up shop in recent years. After a few months at their new office, Healey adds, “they say they realize that Stamford is a pretty fun and sophisticated city.”
Mindful of past predictions of recoveries that didn’t amount to much, some are cautious. “We’re not there yet,” says Mayor David Martin, who was sworn in last December. “There are still people challenged by foreclosures. But the market is trending in a positive direction. We may have taken three steps forward, and one step back, but at least we’re moving forward.” The glass-half-full crowd can cite favorable numbers to bolster their case. Last year 702 homes sold in Stamford at an average price of $664,000, according to data from the Greater Fairfield County Consolidated Multiple Listing Service prepared by NewBridge Properties. In contrast, there were 597 sales at an average price of $636,000 in 2012, the data shows, though the average time homes remained on the market stayed about the same, just more than three months.
Condos, which suffered disproportionately during the downturn, also appear to have posted gains. Last year 562 sold at an average sales price of $327,000 according to the listing service data, while 445 sold at an average of $322,000 in 2012.
What’s helping the bounce-back is that the market is “filling in from the bottom,” says Ronald Malloy, an agent with William Pitt Sotheby’s International Realty. That is to say, he explains, that the strongest activity has been with smaller-price-tag properties, especially those below $500,000 found in neighborhoods like Glenbrook and Springdale. This, in turn, has stabilized the general market and moved more buyers off the fence. “What we saw last year was a market no longer dropping, and in fact we found ourselves with multiple offers on some homes,” Malloy says.
Barbara Hickey, another broker with William Pitt Sotheby’s, says this type of “from the bottom up” recovery is a typical indicator that things will improve further. “Now that we truly have a sustained recovery, we are seeing significant demand in our condo market and entry-level single-family home market, as well as what I call ‘the meat of the market,’ the $500,000–$800,000 single-family home range. It is this segment of the market that is driving the overall improvement.”
If the market had an Achilles heel it was in the trophy category, or those homes priced for $1 million or more, explains Malloy. In order to sell, luxury properties sometimes had to slash their prices up to 30 percent over the course of their listing, he adds. In other words, a home purchased for $1.5 million in 2006 at the peak of the last up-market might get just $1 million today because “a new market bottom has been set,” he says. Plus, also working against some of those properties is their rural settings north of the Merritt Parkway when what’s in vogue are in-town locations.
Another factor is continued concern about the job market, says Gail Stone, another William Pitt Sotheby’s realtor. “Many luxury properties have been purchased [in the past] with bonus money, and that money has generally decreased,” she says. “People are still fearful of corporate shrinkage, downsizing and mergers, all of which can result in the loss of jobs.”
These concerns resulted in less borrowing and spending adds Hickey. “Buyers in the luxury market are in that category because they are higher wage earners; they have capital and they wish to preserve as much of that capital as possible in the event of job loss or other economic fluctuations,” she says. “They want manageable monthly housing expenses, and a smaller house and grounds means lower monthly carrying costs across the board. It’s very common today for couples who are both wage earners to use just one salary to base their buying power on, so that in the event one loses a job, or decides to stay home with children, there is virtually no financial impact.
“Buyers today are consistently buying 10 to 20 percent less than what their borrowing power will allow, which is in very sharp contrast to years [before] 2006.”
Despite any softness in the luxury market, it improved in 2013 anyway. There were 101 sales for $1 million or more in 2013, as compared with seventy-one sales in 2012, according to data from William Pitt Sotheby’s, even if the sales-to-list price ratio last year was 94 percent, indicating that most sold for below list price.