There's a good article today on local real estate trends in, of all papers, Greenwich Time

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I say “good” because the reporter reaches the same conclusions I have, so of course, she’s brilliant. Non-subscribers to the paper can access the article by disabling Java script on their browser and going here. I suggest ignoring the headline, which would better read as “ Connecticut real estate market: still hot, but cooling”.

By the time the open house at 33 Hollow Tree Ridge Road in Darien began on Saturday, Feb. 11, it had been saved over 300 times on Zillow. As the clock struck noon, cars with first-time home buyers, families with small children and curious neighbors alike began rolling up to the 1963 colonial home listed at $1.19 million in the Noroton area. 

“I wonder where they are all going to park,” laughed Berkshire Hathaway listing agent Maria Reciuga.

The four-bedroom, four-bathroom home brought a mix of local lookers, Westchester County residents and New York City escapees. Neighbors looking to upsize came with teens boasting Darien “Blue Wave” sweatshirts, and couples searching for their first home drove up from Manhattan. One couple told the listing agent they were aware of how “not creative” their move from New York to Connecticut was, but here they were.

The busyness of the open house represented a bigger picture of Connecticut real estate — there is a lack of housing inventory in the state. The high interest rates have made selling undesirable, as refinancing a new home at the current rates means potentially forgoing a 2.5 or 2.9 percent rate for what is 6.6 percent as of Feb. 17. 

With little to choose from on the market, a lack of supply and an increased demand has caused home prices in the Nutmeg State to increase 10 percent in the last year alone, according to Zillow. Sellers know that serious buyers will pay more to get into a market that has pushed many home-buying hopefuls out, and the prices reflect that.

That is why Zillow data shows that 48.6 percent of homes sold in Connecticut between December 2021 and Decmber 2022 went for over asking price. Buyers have little recourse when it comes to making the best offer against the person next to them. Many buyers find themselves offering over asking price for homes, telling sellers they are ready to move immediately or dropping a mortgage contingency. With so few homes to choose from, this is how the market has been operating as of late. 

The speed at which the homes are going means agents like Reciuga can set deadlines for offers. At the Darien open house, she planned to honor all showings at the property through the weekend and then would set a deadline of Monday, Feb. 13 for all offers. On a normal weekend, she would have asked for all offers to be in sometime Sunday evening, but because of the Super Bowl, Monday evening would be the date. 

Because of trends like this, Zillow's one-year market forecast notes that, on average, homes in the Nutmeg State go from listed to pending sale in under two weeks. Anne-Lise Brown, a real estate agent for Brown Harris Stevens, said that she used to prep her seller clients to have their homes on the market for a full year. Now, the market has completely shifted to prioritize speed and how buyers can stand out among multiple offers over asking. That being said, how much over asking people are going has calmed since the pandemic.

She’s reporting what I’m seeing:

Brown said that although people may be stretching their budgets to find a home in this market, huge offers over asking have become fewer and farther between. During the pandemic, she said, it was normal to see multiple offers on one home, all anywhere from 10 to 15 percent over asking. Now, the numbers are not that high. For example, Brown recently had a Rowayton home sell for over asking price, but at 3.5 percent over. She feels that the pandemic-era buying trends left many buyers feeling regretful. Now, people may stretch, but they do not want to end up like their home-buying counterparts of a few years ago.

"30 percent of people who bought in the pandemic have buyers remorse that they paid too much,” Brown said. “And [current] buyers are reading that stuff. [They] have heard the stories and they don't want to find themselves in those situations."

If you do decide to put your house up for sale and don’t have an acceptable offer within a week, then, for houses under, say, $2.5 million, I would give serious consideration to dropping your price immediately. And maybe even sooner than a week: if the initial weekend open house flops completely — drop the price on Monday. That’s just my suggestion, and a lack of incoming offers for higher priced homes might justify a longer wait, but if you’re under $10 million and no buyer has appeared on your doorstep after a month, you’re way overpriced.

Your opinion may differ, of course, so if you want to stubbornly stick to your price when your agent has advised you to drop it, the failure’s on you. If, however, it’s your agent who’s telling you that you just have to ‘wait for the right buyer to appear”, she’s probably just too embarrassed to admit that she erred in setting the original price, and I’d fire her, and hire someone who knows what she’s doing.