The answer is that its impossible to know exactly when the National Real Estate market will bottom. Some say 2009 and other not until 2010. It will slightly different in each local market, and we won't know until we are way past the bottom that it is actually in place.

However, for savvy buyers who want a deal, now could certainly be the time. Pricing in Litchfield County is far from efficient. I sold a the highest sale in Roxbury in 2008 last February. He paid less than half of the original offering price of $7.5mil. The owner turned down offers in the $5mil range along the way. My client got such a good deal, there is no doubt that he got the bottom pricing, even though it was a year ago! I don't care if the market goes down another 20% from this level, my buyer would never have to sell this house for less than what he paid.

Similarly, I sold one of the highest sales in New Milford last August, that's right only one month before the meltdown. This house had been on the market for more than 5 years. Again, this buyer was able to negotiate an incredible deal, one which will hold up in any market!

By the same token, I am aware of another broker's deal that was recently done in Washington where I am firmly convinced the buyer got screwed, even though the deal closed in December and he knew what the market was doing!

The point I am trying to make is that you can make a good deal or a bad deal in any market. I just searched inventory between $2mil and $3.5mil for a buyer. I am astounded at the pricing variation. There are houses in the group which are 30-40% overpriced, and there are houses in the group which are fairly priced for today's market. You will need professional advice to sort this out! If you want a great deal right now, they are available. However, you will not find them by siting in NYC searching websites and telling your broker that prices are not stable yet. If you want a deal, you need to make a commitment to coming up several weekends in a row, getting familiar with the inventory, talking to your broker about which sellers are motivated, and submitting bids where you feel comfortable. A few sellers might not negotiate, they might even be rude and tell you to take a hike. Who cares? You don't know them anyway! If you are sensitive about this, bid under a lawyer's name. Its done all the time, and then the seller will have no idea who you are if things don't work out. Most smart sellers will negotiate any offers in this market. So come up and get your DEAL!

Even though the current economyis ugly, Spring is GORGEOUS in Litchfield County, and just around the corner!

I came across this interesting article by Gary Keller. I am definitely feeling this same way. Because we are in a real estate market where wall street weekenders make up a large proportion of our buyers, I have come to the conslusion, that things will not really start selling until the stock market has stabilized. It doens;t have to go back to the highs, but it needs to be clear that we have made the lows. Then I expect that there will be a real rush to get in. There are plenty of buyers around, looking and looking, just fearful to act.

"A buyers' market should be just that---a buyers' market. It's not a fence-sitting, waiting, loitering, delaying, dawdling, postponing, vacillating, hesitating, wavering, faltering, pausing, foot-shuffling market. It's a buyers' market. By its very name it means buyers should be doing one thing and one thing only buying. So where are the buyers, and why aren't they buying?

The great irony of a buyers' market is that even though the opportunity to buy is high, buyer urgency tends to hit an all-time low. The media becomes the excited purveyor of negative news and uninformed advice, and buyers buy it all. Actually, it feels like the only thing they're buying.

Their reluctance is ironic since not so long ago buyers were incredibly excited about buying and it was a sellers' market. Prices were escalating and it was perhaps one of the most difficult times to buy value and yet people were buying like there was no tomorrow. Buyers were afraid of losing out by not buying, even though the advantage was all to the seller.

Now a shift has occurred. Fear is still in the driver's seat but the tables are turned the fear of paying too much seems to stop most in their tracks and immobilizes them. When they should have been afraid of paying too much they weren't, and now that they shouldn't be afraid of paying too much they are.

It's one of the great paradoxical moments of any market and the herd instinct at its most pure. Reluctance in the face of great opportunity becomes an agonizingly defining characteristic of a shift. But those who do not follow the herd and take action are the winners in this market."

During the three years of the boom (2003-2006) they said it would never stop. And it did ..now three years into the decline they say it will never stop . But it will ..

I always enjoy Craig Cooper's perspective in his monthly letters, so I decided to pass this along:

Dear Colleagues,

On January 10^th, I was invited to Rumsey Hall School to see the Rumsey Hall Blue Dogs play the Taft School Rhinos in the inaugural game in the Lufkin Rink. It was a great game with a lot of cheering from 200 spirited fans, and Rumsey won 5-3.

What was really striking to me about the game was this . . . I have not seen that many happy people gathered together in a good long time. It was just a totally upbeat scene. And the feeling was contagious; I had a great time at the game, and walked out of it feeling . . . optimistic.

Perhaps you are not feeling optimistic today. You may say, What is there to feel optimistic about? I will respond with two quotes. The first is from Theodore Roosevelt, who said in 1894: We Americans have many grave problems to solve, many threatening evils to fight, and many deeds to do, if, as we hope and believe , we have the wisdom, the strength, the courage, and the virtue to do them. But we must face facts as they are. We must neither surrender ourselves to a foolish optimism, nor succumb to a timid and ignoble pessimism. And I will also quote Winston Churchill, who lived in even more challenging times and said For myself I am an optimist it does not seem to be much use being anything else.

I choose to be an optimist because it is better than the alternative choice. And here is what I find to be optimistic about:

1. When the going gets really tough, so do Americans.
2. Adversity breeds creativity. The most recent issue of Forbes lists ten great companies started in rotten times, including General Electric (1892, one year prior to the panic of 1893), Disney (recession of 1923-24), Hewlett-Packard (1939), Microsoft (1975), Apple (1976), and Genentech (1976).
3. I have never in my lifetime seen better buying opportunities in the real estate and stock markets. I dont say that we have reached the bottom I do not make any pretensions to be able to time markets with precision but I am putting my own money into the stock market.
4. Interest rates are low.

With respect to the mortgage markets, I noted in my last letter than todays mortgage markets are tricky, in that they are both inefficient and volatile. If you or your clients are looking for mortgage financing, I encourage you to call me. Hourglass can guide you and your clients past the shoals of this market. There are safe harbors with truly good deals, including some of the best mortgage rates that we have seen in years.

Sincerely,

Craig M. Cooper

President, Hourglass Mortgage

4 Titus Road, P.O. Box 566

Washington

Depot, CT 06794

Telephone 860.868.2810

Fax 860.868.2610

Today I received an email from a client who has been looking to buy for over a year now. She said she has been going to my website regularly and loves it . (thanks!) But she was wondering why she didn't see new price reductions in this market. Since I have recently done many, this made me realize I was not marketing my price reductions well enough. So I'm changing things, thanks for the feedback J.J.! From nowon I will put the original offering price of the property on the main page as well as highlight any recent price reductions in red.I will be the only area website to show the original offering price of a property, so buyers can get a better idea of what is going on. This comment from my client is important asit indicates what buyers are looking for. Theyare shopping by price reductions only.

I received another email from a buyer this week wondering if there is something wrong with a house as it has not sold in 2 years. This particular house is fantastic. However, the owner spent a lot of time offering it at $3.3mil and was too slowto lower it. Its nowdown to $2.3mil and its agreat deal!They have turned down several offers on the way down.So keep in mind, that just because something has not sold quickly does not mean there is something wrong with it.In this area, it can often take a year or more to sell a house. Houses are unique in this area and it takes some time to match up the right buyer with the right house.

If you are a serious buyer, you need not sit around looking at websites and wait for prices to be lowered. Come up and look, make an offer, and you may very well get hit! Keep in mind that sellers have egos too, and don't want to keep lowering prices in a vacuum. Show some interest, and in most cases, they will respond. Give me a call if you would like to discuss area houses that are likely to sell for good discounts off their asking prices. 860-868-9066

If you have comments on my website, or can think of some info you would like to see there, please let me know!

Fondly,

Stacey

Well, I guess by now you have all heard the bad news, so with 2009 coming up, I've decided to focus on THE GOOD NEWS.Here are 10 reasonswhy I think 2009 will be a good time to buy Real Estate in Litchfield County.

1) Little Speculative Building. The really devastated real estate markets are in areas where there was rampant speculative over development. We do not have that problem here. There has been very little speculative building in the last year. This will serve to lower theinventory of new construction comingon the market as we work through the current inventory.

2) Conservation. There is so much conserved land int his area, that the possibility of major subdivision or excessive inventory build up of new homes, is always lower than in other more developed areas. In addition to the land officially owned by the land trusts, there are thousands more in conservation easements. See my website for more info on conservation easements http://www.staceymatthews.com/AreaInfo/conservation.html

3) Tough Zoning Laws. Bridgewater, Roxbury and Washington have very tough zoning. There are virtually no subdivisionsin the traditional sense of a large cul de sac with homes all built by the same builder. If you are a builder of these homes, I feel safe to say that you should stay away. These towns will not welcome you.

4) Proximity to the City. We remain the only premium weekend area that you can get to in 1 1/2 - 2 hours from the city with virtually no traffic (once you get to the GW bridge). We are the only place that is close and yet has that completely country feel.

5) Low taxes. CT has very low real estate taxes compared to other areas(like anywhere in New York State especially the Hamptons). Washington and Roxbury have two of the lowestMill rates in the state!

6) Economic Stimulus Plans: The amount of money our government is pumping into this economy is staggering, and if that doesn't fix it, Obama seems set on putting in more. Much of this money is aimed directly at the housing market. Today's news is that Obama is considering a corporate tax cut aimed at getting corporations to invest and begin to hire again.

7) Interest Rates Fall Sharply. Interest rates are near 50 year lows. Do I need to say more?? Applications to buy and refinance homes doubled and tripled respectively last month. People are going to be saving a lot of money after refinancing at these rates.

8) Cheap Oil. This is also putting a lot more money into consumers pockets. Hopefully as this stock market stabilizes, consumers will start spending again.

9) Deals. There are GREAT deals to be had, and they won't last forever. We will never know the bottom until we are way above it. I believe the brave who step forward in the next few months will be quite happy with themselves a year from now. When the springstarts to bloom, my experience tells me that sellers get LESS negotiable. The depths of winter is usually the best time to get a deal.

10) Real Estate is Local. While many markets in California and Florida have been killed, this is due to rampant speculative over building. We do not have this kind of problem in this area, and therefore, I do not anticipate our markets will ever godown as much as thoseother areas have. We will remain the preeminent country destination for New Yorkers and many of those who come here will move here full time. I anticipate that as the stock market stabilizes and volatilitydeclines, the buyers who have been looking for the last year will be coming in with offers. To most we are still an undiscovered area, and there is plenty of room for upside as more people tire of the Hamptons.

I know, appreciate, and sympathize with seller's concerns about the current market. I am also a home owner and we are all in the same situation. Here are some ideas:

 

1) Lower Your Price. I know, I know, you don't want to hear it, but every house on the market should have lowered its price in the last 3 months. If you have not done so then you are most likely overpriced, period. We all wish we could sell our houses for the peak prices we had 2 years ago (me too!) Unfortunately, those days are over and unlikely to return in the near future. That is not doom and gloom, its just reality (big difference!) It is unlikely that a buyer will walk into any house these days and pay a premium because they just have to have it. If you want to sell your house, you must be realistic about price. If you really NEED to sell your house, then you better make sure you are the best thing out there in your price range. This is a time where it is crucial that you detach your ego from your house price. Talk to your broker, and then listen to what they say! I am often asked for advice but then owners disregard it if it is not what they want to hear.Sellers are defensive and still hoping for a better outcome. Every day I talk to sellers who refuse to lower their price, but then say they will negotiate once they get an offer. I can not stress this enough: that this is not the way to go, its not working right now! You need to attract buyers to come look at your house with a price reduction. Every buyer is asking if prices have been reduced BEFORE they come to look. They dont want to see houses where sellers are not realistic and negotiable and the only way they have proof that a seller is realistic is by seeing a lowered price. In general, brokers have sent all the current listings to their buyers. Brokers are looking for price reductions as the only way to reach out with a fresh approach to their potential buyers right now. The brokers want to see something that has a Wow price on it, and then they will make calls and try to get people to come up and look. Here is a recent example: I just lowered the price on this amazing house over 10%, from $2.6mil to $2.3mil.

 

It originally started at $3.3mil (with another broker). When I reduced the price, I got 4 showings last weekend! Several of those have indicated interest or asked for more information. Thanksgiving weekend is usually slow and the only listings of mine that were shown last weekend are those that have had recent price reductions.

 

This week I lowered the price for the second time on this fantastic house down to $2,795,000. It in Roxbury on 36 acres surrounded by land trust:

Just after the price reduction, a buyer I had been talking to about the house has called an booked an appointment to see it today.

 

2) Private Price Reductions. Another alternative (though an inferior one) is to have your broker call all the people who have had positive showings on the house and offer a private price reduction for those clients. (Of course, you have to hope your broker keeps good records of who has seen the house, many don't, but I do!) I'm making calls like this for one of my clients now.

 

3) Consider Renting Your House.Many area sellers (including several of my clients) have locked up good tenants for 1-2 year periods recently. This helps the general market, as it takes inventory off the market for sale. It helps the homeowner to cover their costs and wait it out until the market turns, and more imprtatntly, renters often become buyers and maybe the tenant will make an offer to purchase the house during the lease or at the end of it!

 

4) Offer Owner Financing. This really works best when the current owner does not have a mortgage, or has a smaller mortgage that they can afford to pay off in order to attract a buyer to their property. Most of my land offerings now are offering owner financing. Seethe land listings on my website! www.staceymatthews.com

 

 

 

 

 

Interest rates have dropped dramatically in the last 10 days. Some of the highlights as I see them are: 30 year fixed confirming at 5 %; 5 year Jumbo ARM at 5 %;I even have one local guy who can get up to $1mil loan with a 70% loan to value (that means you have to put down 30%) 5 year ARM at 5% today! This will make housing at every price range MUCH more affordable to everyone! Mortgage Broker information is available on my website at www.staceymatthews.com Even if you are not buying a house, this is a great time to refinance.

I was excited to see that our local gentleman farmers, Quincy and Patrick Horan, received great press from the NY Times about their organic farm and fantastic pasta sauces. Check it out on the link below!

http://www.nytimes.com/2008/11/30/nyregion/connecticut/30dinect.html

You can buy their incredible pasta sauces, made with organic heirloom tomotoes, on their website at: www.waldingfieldfarm.com

They also have their holiday gift baskets available now!

If you come to Litchfield County in the Summer, don't miss a stop to their farm stand. More info on other pick your own farmstands available on my website www.staceymatthews.com

If you are considering putting your house on the market soon please consider the following information. In September I sold two houses, I represented the buyer in both transactions. The first one was on the market for 5 years. The price was inched down slowly over that time period and it eventually sold for about half the original offering price. The process was torturous for the owner, creating anxiety angst and anger, not to mention the financial stress over the carrying costs on the house that was not being lived in! The second one was on the market for 2 weeks. The owners had an appraisal done at $1,550,000. They listed at $1,390,000. I sold it for $1,375,000 immediately. There were buyers buzzing all around this house and two other offers in when we had ours accepted. If I had not sold it, I have no doubt they would have had even more offers in the next week. Which seller would you rather be???

I think every top broker in this business will tell you that things are slower than normal right now. My biggest hurdle is that NY weekenders, our steadiest pool of $1 million+ home buyers, are too busy watching the stock market to buy houses. At last count I am working with 21 buyers. They are in various stages of buying. It ranges from one couple who has been looking for just the right thing for 4 years, to another couple who found their perfect dream house on the first and only time they looked (but they want to wait for one more bonus cycle to act). More typical are the several who have been renting and looking to buy for the last 6-12 months or so. They are committed to the area, and will step forward when the economic outlook is more stable. When the financial situation improves, these buyers will act at some point. Some will come in and get great deals while the getting is good (in the next few months) and some will prefer to wait until the all clear bell is rung somewhere. They may not get the bottom price, but they will feel safer with their decision. Im fine to help and wait as long as is necessary.

Below I am providing some hard facts for the area Real Estate market. I have to say that I am reluctant to furnish these facts. I hesitate to ever quote average market prices because this number can be very misleading. The main reason for this is because it does not take into account the improvements made to houses over time. This is, of course, an impossible number to calculate. An accurate average price number would have to take a basket of houses that sold one year, then had only basic maintenance done to them, and then have the same basket sell again in another year. That would give you the average price increase or decrease. For example a house that is bought for $1 million in 2006 and then the owner puts $500,000 into it and sells it for $1.4 million in 2007. Did the market go up or down? The average price statistic will tell you it went up, when in reality it went down. On top of that, average prices are also skewed in this area due to the very limited number of sales. Additionally, this info is only from sales that were publicly listed. Each year we have a handful of private sales in the area which are usually at the high end and would create a higher average price if they were included. This information is the average from Washington, Roxbury and Bridgewater combined.

# Houses Sold Avg. Price % Change From Prev. Yr

2002 105 $573,293

2003 113 $724,167 26.3%

2004 99 $849,251 17.2%

2005 121 $933,635 9.9%

2006 103 $963,265 3.2%

2007 106 $1,077,944 11.9%

2008 to date 70 $1,066,302 (1.1%)

So, is the market really only down 1.1% this year? For that matter, was it really up 11.9% last year? The answer is NO! If I look at what things could have sold for a couple of years ago, vs. what they would likely sell for now, I would estimate we are down at least 20% from the highs. The more interesting number here is the number of houses sold. There are currently 4 houses under agreement. If we assume that 3 of them close (I know for a fact that one will not close this year) and that a few more things sell with quick closings, we could be looking at only 75 or so sales this year. This would be down 30% from last year. Most buyers I have dealt with have put significant money into their houses. Almost every house up here needs something done. This amount of money that has gone into renovations, expansions, landscaping, pools, tennis courts, etc just cannot be factored into these numbers.

Comments and Questions?