Ridgefield Press
Real estate's 'buyers market' comes to town
May 13, 2006

The buyer�s market has officially hit Ridgefield.
Local Realtors describe the market as �normalizing� and �softening,� but no matter how it�s phrased, the fact of the matter is there are now 233 houses on the market. Last May there were 149 houses for sale in town.
�Times are slowing up � it is going into a buyer�s market,� First Selectman Rudy Marconi said at the annual town budget meeting on May 1. �Real estate, there is no doubt, is slowing up. It is not going to change tomorrow.�
Mr. Marconi said he expected the real estate slowdown to last for as long as a decade. �There�s probably an eight- to 10-year cycle,� he said. �We�re in year three of that cycle.�
Board of Finance Chair Marty Heiser agreed. �Housing prices aren�t going up what they used to be, and it�s taking longer to sell a house,� he said.
Realtors have various interpretations of what is going on, but they uniformly acknowledge that there is plenty of �inventory� in every price range, partly because 2005 was a disappointing year.
�2005 was not a great year,� said Jack McAuley of Keller Willliams Real Estate. �There were 380 single-family closings � the lowest number in the previous 10 years. We had been used to the 400s. 2004 was a great year. Closings dropped 21% between 2004 and 2005. 2004 was the best year since 1999.�
Prudential Realtor Laura Fried said she saw the market forces at work now as simple economics, partly stemming from a glut of houses left over from 2005. �It�s supply and demand,� she said. �For buyers, it�s probably the best opportunity they�ve had in a long time. In 2005 we had a good early spring, and then it stopped.�
�I was a CPA for 17 years before this � I�m a numbers gal,� she said. �The way I see it, 2005 was a question mark year for buyers. They heard a lot about bursting bubbles and economic downturns, and they sat on the sidelines to see what would happen. The inventory built. Now there�s a classic economic situation of supply and demand � that creates a downward pressure on prices. There�s a softening, but not a crash.�
�The biggest problem is inventory accumulation,� she said. �There are all those houses from 2005 and then the new houses coming on for the spring of 2006. If we can get the buyers back, I think it will correct itself.�
Ms. Fried said this year �the spring market has been disappointing,� but she said she didn�t think this reflected the general economy. �The job reports are better,� she said. �Although interest rates have gone up, they�re still historically low.�
Coldwell Banker manager Patrick Fink said he felt some buyers were scared off by media reports of a �bubble� in the Northeast housing market, which he said was an unfounded fear. �The bubble is an invention of the media,� he said.
Mr. McAuley studies real estate trends, and he is a columnist for The Press. He said he has been carefully tracking the market recently, and he is not alarmed.
�The market if you look at where we are in terms of historical comparison, we�re in pretty good shape,� he said. �The number of deals being done is less. That�s my sense.  There�s inventory in every price range. Rates are still low, though, that�s one thing. And the average price in town is still going up.�
Mr. McAuley speculated that one problem with today�s market is that sellers have not caught up with the market trend, and they set their prices with too-high expectations.
�Sellers typically are behind the herd instinct, particularly people who don�t have to move,� he said. �People are too late to the party. If you bought your house in 2003 and sold it in 2005, you�d make money probably. If you bought your house in 2004 and tried to sell it now, you�d probably be underwater.�
He stressed that prices are still up, they are just not flying up at double-digit rates.
�The average closing price in April 2006 was $973,000,� he said. �The average closing price in 2005 was $806,000.�
He said sellers expect the prices to keep rising, and buyers expect to cash in on the �buyer�s market,� and the result is frequently a �standoff� over as little as a $10,000 difference.
�You see a lot more expireds right now,� he said. �If they don�t sell it, they take it back off the market. You have sellers trying to cash in. I tell all my sellers that the buyers are who establish the price. What I�m seeing now is there�s too much of a stare-down here. Last year and the year before, buyers felt they had to make concessions. Now buyers are playing more hardball. Deals are falling apart. There will definitely be an adjustment here.�
Mr. McAuley said houses at the top of the market are affected by the inventory buildup, but not more than the rest of the market. In the first four months of this year, six houses in town sold for more than $2 million, compared with one house over $2 million in the same period last year, he said.
But there are 24 houses on the market right now over $2 million, he said. There are 117 houses over $1 million.
Mr. McAuley said he thinks real estate agents are partially to blame if they overprice a house in order to convince the seller to list with them.  �When you first put the house on the market, there�s a new launch feeling � if it isn�t priced right, you blow the launch,� he said. �That�s a mistake people make. When you talk about the $2 million segment, it�s not getting worse more than the others.�
Mr. McAuley said some new homes become tainted if they don�t sell.
�There�s a sense that there�s something wrong if the new construction sits,� he said. �Or the builder took a risk in the location or the lot. They bounce from Realtor to Realtor.�
Despite the slowdown, no one seems to expect to see massive price slashing in Ridgefield real estate. And most Realtors seem optimistic that the slowdown will be only temporary � far less than the decade Mr. Marconi mentioned.
�I think it�s going to be slow for a while,� Ms. Fried said, sounding philosophical. �Until we see a normal inventory, there�s going to be a pressure on prices.�
�No one feels they�re going to have a fire sale,� Mr. McAuley said.



� Copyright by Hersam Acorn newspapers

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