If you ask any realtor in the area how the market is, he or she will likely tell you that things have picked up in the last few weeks. Since November, the average 30 year mortgage rate has fallen from 7.8% to 6.6% – a big enough drop to prompt buyers who had been waiting on the sidelines to take action. We are also seeing buyers who sought refuge in rentals in 2022-2023 jump into the fray as their leases are coming up. Add this to the pre-existing pool of buyers who have been looking for months and you get a pronounced uptick in buyer activity. Currently New Canaan buyers have about 40 houses to choose from in New Canaan (versus 250 in 2019). In Darien there are 22 houses for sale and in Wilton there are only 12. Once again we are seeing multiple offers and 5-20% premiums offered over the list price of homes, especially at the entry level in these towns (1MM-1.5MM generally).
High End Buyer
The recent uptick in buyer demand isn’t unique to those pursuing mortgages – high end buyers are also re-emerging and are often using cash. Unlike those obtaining mortgages, these buyers are motivated by reasons unrelated to rates: buying after reducing their number of multiple homes, moving to Connecticut from other states in favor of lower property taxes, or to be closer to family (to name a few). These buyers have limited options as well: of the 17 houses for sale in New Canaan over $4MM, 7 of them are merely renderings of potential houses to be built when a buyer comes along. (It’s worth mentioning that buying pre-construction is a great idea in this environment if you have the time and patience to do so. You’ll have less competition and greater control over crafting a house you’ll love).
Our Prediction For Inventory
The well-documented reason for the inventory bottleneck is that sellers don’t want to give up their lower rate mortgages and also are worried about finding a place to go. For the first time in three years, we are starting to see that concern lift a marginal amount and are seeing a slight increase in inventory, which is in line with what many agents and mortgage professionals predict.
According to Terry Hastings, Branch Manager for Total Mortgage in Ridgefield, “Right now Jumbo mortgage rates (mortgages for $766,500 or more) continue to be below the government backed rates as those mortgages perform better over time,” he says. “When we do see federal rates drop, more listings will come on because sellers will be ready to let go of their historically low rates. But because demand is still so high, expect prices to increase. My advice is to pay “April’s price” today and refinance when rates drop.”
The problem with this scenario of course is that there aren’t as many houses to choose from right now, but at the same time, when more houses DO come on the market in a lower rate environment, they will likely be more expensive and more competitive to buy.
So what do you do?
If you’re a seller, our advice is to put your house on the market now. Don’t wait for your lawn to turn green or open your pool if you’re fortunate enough to have one. The incremental price increase you might get later in the spring can likely be captured now with fewer houses to compete with.
If you’re a buyer, our feeling is that it’s better to buy now at a higher rate than compete with the influx of even more new buyers once rates drop further – you can always refinance down the road and many lenders are offering no-cost refinancing when rates drop.
Occupational bias aside, whether you’re buying or selling, a real estate professional can truly help you carefully consider your options and navigate constantly shifting market conditions. With 300+ agents in New Canaan and 40 houses for sale there are plenty of agents who would be happy to help.
Amanda Bryan is a native New Canaan resident and full-time realtor serving New Canaan, Darien and Rowayton. After receiving her MBA and beginning a career in financial services, Amanda pivoted to residential real estate 17 years ago. She is the co-founder of Team Saxe + Bryan of Compass with business partner Christine Saxe. Amanda is the mother of 3 children, owner of too many pets and has a mild tennis addiction.
