CT-Shore-Homes Newsletter  
January 2009 

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Happy New Year!

We can clearly say that it was a pleasure to turn the calendar and put 2008 behind us. It was an extremely challenging year on many fronts and in the Real Estate Market all the players were stressed. 

However, we believe we enter 2009 much stronger as we made moves to better represent clients and invest in our business. Our team approach has been well recieved by clients and our new release website was a significant investment that should assist our buyer and seller clients.  

There is a positive energy in the air as our phones have started to ring with buyers ready to step up their home search. Recent decline in interest rates (Freddie Mac weekly survey showed an ave for a 30 year mortgage at 5.10%) coupled with a feeling that we are nearing the bottom of the price correction are major factors in the increased activity. The first quarter of 2009 has all the ingredients for buyers to jump off the sidelines and into the market.

• Low Interest Rates
• Large selection of attractive homes
• Aggressively low home pricing

If you are buying a home or looking to sell, give us a call.

Tom Burland                                                JoAnn Stirling

Homes Under Contract
December 2008 

We have started to see a pick up in contract activity on homes in the area. Particularly healthy is the market segment under $400,000. As you can see from the data below, the number of homes going under contract in each town in December is down from the previous year, with the exception of Madison showing an increase in 2008. We have included Median List Price for each town as well as Average Days on Market (ADOM). 

MLS Data Residential Single Family Homes and Condos 

Closed Home Sales
December 2008 

Closings were also down across the board with the exception of Madison showing a slight increase. Average Days on Market (ADOM) are high relative to years past, however several towns show improvement to under 100 days.. Median SP is an indication of the price segments that are selling and are best put into perspective by understanding the specific inventory that has sold. We would be happy to walk you through a more indepth market analysis...just give us a call.

Town	Units 2007	Median SP 2007	Units 2008	Median SP 2008	ADOM 2008
Branford	27	$285,000	17	$220,000	97
Clinton	17	$302,000	9	$240,000	87
Killingworth	13	$380,000	1	$265,000	48
Guilford	16	$472,000	9	$390,000	173
Madison	7	$475,000	9	$525,000	106
Westbrook	10	$295,000	4	$268,750	96

MLS Data Residential Single Family Homes and Condos

Active Home Inventory
December 2008

We have seen the annual end of year retreat of homes on the market, primarily as people pull the houses off the market for the holidays as well as evaluate whether they are even interested in selling.

One statistic we have started to use is absorption rate, that is the amount of time it would take existing inventory to zero out at urrent rate of sales per month, given no new inventory comes on. Generally we will use a 3 month and 6 month ave. sales volume figure. We are seeing a 10-12 month absorption rate across all towns...if 20 homes sell each month and you have an inventory of 200 homes there is a 10 month absorbtion rate. 

One of the drivers to a higher number of homes on the market is owners looking to sell before their adjustable rate mortgage resets. Look to developments from the Federal Governement and enders to become more agressive in conducting "work outs" to keep people in their homes.

Featured Article - Remodeling Cost vs. Value Trends

Each year Hanley Wood Remodeling magazine does a nationwide survey and rates various home improvement projects relative to the impact on increasing your home's value. They have also trended this over time.

The return on investment picture is changing and that is no surprise in a market that is seeing declines in home values. For instance 2005 set the record for ROI at 86.7% on average for all projects - that means that a $10,000 project would ad $8,670 in value to your home. High level data can be found on this link Cost vs. Value Trends. In 2008 the overall return was approximately 67.3%. The payback varied regionally and New England, Mid Atlantic and East North Central Regions returns were reduced greater than the national average because of higher costs.

There are several variables that go into "cost recovery" of a project; these include condition of the rest of the home; value of similar homes in the surrounding areas; specific catagory of project.

The Regional Data section provides return based on project and drill down to the specific region of the country and also down to city.

For New England the best ROI on projects were:

• idrange Deck Addition - 76.8%
• Siding Replacement - 78.8%
• Window Replacement - 76%
• Minor Kitchen Remodel - 73.7%
• Bathroom Remodel - 71.3%
• Major Kitchen Remodel - 68.6%
• Major Kitchen Remodel (Upscale) - 63.5%

Going to the Regional Data allows you to drill down to the project to get a description of what is involved in the project.

Hanley Wood: The No. 1 Media Company Covering Construction Since 1976, Hanley Wood has focused exclusively on North America's important residential and commercial construction industry. Through its four divisions, Hanley Wood develops magazines, Web sites, e-newsletters, exhibitions and conferences, and custom marketing and data services that support builders' critical information needs.

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