One of my favorite real estate statistics is the number of homes sold. It is a simple metric that is not influenced by the purchase price of properties. Only the seasonality of the real estate markets needs to be considered. I like to look at the trailing 12 month number of transactions so that I am always getting data from each month of the year.
Previous posts have shown that prices in West Hartford have been relatively stable over the past year, through the number of transactions has fallen. The graph below shows more detail about the trend in transactions. Specifically, each data point counts the number of sales for the preceding 12 months. All data is for single family homes and comes from the CTMLS, which is deemed reliable but not guaranteed.
We can look at the same data in a table.
1. West Hartford is one of the most active markets in Greater Hartford. I don’t show the comparison to other towns, but most have annual sales in the 100 - 300 unit range. Check out the data for all the towns in the Year-End 2008 Roundup.
2. From the beginning of the data series through mid-2006 the number of transactions was consistently between 800 and 900 per year. This observation is interesting for two reasons. First, it confirms that West Hartford is a mature market. There was not a lot of new construction during the boom to inflate the sales numbers. The observation also suggests that homeowners did not get real estate crazy by buying and selling more frequently in hopes of making a quick buck.
3. The final peak in the graph was in May 2006, when 884 homes were sold in the previous 12 months. West Hartford seemed to be ahead of the curve in terms of slowing down. Mortgage markets started to visibly implode in March of 2007 with the New Century bankruptcy, and the stock market began struggling in July of 2007. Perhaps the increasing mortgage rates during that period were enough to encourage homeowners to stay put.
4. As of February 2009 the number of transactions over the previous 12 months has fallen to 627. While this is 29% off the May 2006 observation, there is still a lot of activity in West Hartford.
West Hartford is a very interesting real estate market. It has a large number of homes, and properties at all price points. Because it is such an active market, trends are generally meaningful and worth analyzing. The town saw neither the frenzied building nor the frenzied buying during the “real estate boom,” and so far has not seen much of a price correction in the “real estate bust.” That being said, the number of sales is down over the past two years.
It will be interesting to see what happens next. My colleagues and I all have clients actively looking for homes in town, so we can safely conclude that West Hartford has not lost its appeal to buyers. However, the market is so large that we really need to wait for the data to truly understand what is happening.