Archive for November, 2006
Mommified
November 28th, 2006 categories: Central Connecticut News & Information
I have trouble identifying myself as a mom. Moms wear mom jeans (high-waist, tapered leg), they have sweatshirts with animals on them and they do crafts. But now the reality is hitting me. I am mother to one 8 month old human and three canines, a work-at-home business woman, and all around doer of stuff related to the home. These blogs capture the lives of women just like me. So, in honor of my life outside real estate…
24/7 - The author is a freelance writer and work-at-home mom. Read her story about her pitbull Roxie’s feast of garbage.
Ruthless in the Suburbs - Suburban writer mom. I like this post because she makes up a really great word that I’m going to start using - compuchat.
IzzyMom - When is MY Day Off? Need I say more.
Notes from the Trenches - Where the Insurgents Wear Diapers. Check out the It’s Like Herding Cats post.
eMomsfromHome is a bit more serious and offers really helpful ideas for the Momtrepreneur.
Mom 101 - As a former eye-rolling, non-parental diner and now blessed with a child, I can relate to everyone in this story. The author’s story about eating out in public can be told by every parent around.
And last but not least, this article reminds me of why I left a steady, well-paying corporate job for a life of very un-steady income to pursue the things that make me who I am - my family, my pets and volunteering in my community. At Your Funeral, No One Reads Your Resume.
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The Murky Middle - Defining Middle Class in Connecticut
November 28th, 2006 categories: Central Connecticut News & Information
Inspired by an article in this morning’s Hartford Courant called Who is Middle Class?, I thought it would be fun to include varying perspectives (including my own) on the question of what defines class and just who among us is in the middle. This is an issue that is likely to be addressed nationally but it will have ramifications for many in Connecticut who feel like middle class but may be treated as the “wealthy” when compared to those in other states.
More analytical commentators have differed for years on how to measure the middle class. Should net worth be the yardstick? If so, the Federal Reserve says, people in the middle would have a median family net worth - assets minus liabilities - of a healthy $93,100 in 2004, up from $70,800 in 1995.
But if you look more closely at the numbers, the median net worth rose very little in the three years before 2004.
Also, The Big Picture did a summary article on the report.
Median Income
Or should the measurement be median household income? By that measure, the midpoint was $46,326 last year, according to the Census Bureau. But median income varies widely by region, age and racial groups.
The national medial income in 2005 was $46,326.
The median income in Connecticut was $56,409. Compare that to Mississippi which has a median income of $32,397.
So What are Nutmeggers Doing With All That Extra Income?
While looking at median income, we also have to consider the cost of living. The largest expense for most households is housing costs. According to the Partnership for Strong Communities, housing costs in Connecticut have risen nearly 63% from 2000 to 2005 and wages have risen only 18.5% during the same period. In 2005, the median home price in Hartford, Connecticut, was $253,300.
Home Connecticut did a study about home affordability and found that 159 of the 167 towns in Connecticut are not affordable when comparing the median income to median sales price.
To determine the affordability of a given town, HOMEConnecticut calculated the income necessary to qualify for a mortgage for a median sales priced home in that community based on a conservative formula: a 4.5% fixed rate, 30-year mortgage, 1% annual property tax rate and $60/month in property insurance. The formula assumes the buyer has 10% of the purchase price for a down payment and no other debt. We then compared the qualifying income with the town’s actual median household income. A town was considered unaffordable if its median household income was lower than the qualifying income.
Missisippi vs. Connecticut
While I’ve never been to Jackson, Mississippi, and can’t say if it’s comparable to Hartford, Connecticut, both are state capitols and I thought it would make for an interesting comparison using the measurements discussed above. In Mississippi, the Median Income in 2005 was $32, 397 and the Median Housing Price in 2005 in Jackson was $133,880.
Compare that to Connecticut where we have a a median income almost double that of Mississippi but our housing costs are also almost double. Median Income in 2005 was $56,409 and Median Housing Price in Hartford in 2005 was $253,300.
What Am I Getting At?
Defining middle class may be an exercise in futility because there are so many variables, even more than what I care to go into. But it is clear that the value of a dollar in one part of the country is different that the same dollar elsewhere. And certianly to make broad policy decisions affecting “the middle class” should take into account this variation.
To be middle class in Connecticut is very different than middle class in Mississippi simply because to live here, you have to make more income to be just able to live. The additional income goes to pay for housing, owned or rented, and other expenses and taxes (can you say property tax burden). While someone earning $100,000 may be “wealthy” when compared to the national median, the $100,000 annual salary in Connecticut feels more middle class than it does elsewhere.
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Tales From the Real Side - Vol 1. - When Winning is Losing
November 25th, 2006 categories: Home Buyers
Halloween may be over but this story is scary enough to tell anytime. When I’m just about to put in an offer for a client, I remind myself of this experience so I remember just how important it is to remain professional and “friendly” throughout the process because I’m dealing with not only the future of my clients but that of the seller.
I was a new agent - my second transaction to be precise. Clients of mine were looking in the low end of the market during a busy seller’s market - not the best place to be as buyers. They couldn’t put any money down, they were FHA, they were looking in the summer and they needed to buy within 90 days. Slim pickins’.
We came across a house that was in the area they wanted and was a price they could afford. Looking at the house, I saw some structural as well as many cosmetic problems and pointed them out to my clients. The home was also in a serious state of disrepair and filth - never a good sign. Despite my concerns, my clients bid and their offer was eventually accepted and we went to inspection. Read the rest of this entry »
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Real Estate and Mortgage Market Report for Connecticut - November 20, 2006
November 20th, 2006 categories: Real Estate Market
Local Market Trends: According to monthly statistics released by the Greater Hartford Association of Realtors, October closings were down 11.5% from last year. Houses were on the market for 55 days on average, up 17%. More homes were listed in October 2006 than last year - over 1700, a nearly 8% increase. And year-to-date, there are more houses on the market than last year, more than 4% more.
While it seems that homes are taking longer to sell and there is more for buyers to choose from, prices have not begun to drop overall. Comparing October 2006 to October 2005, home prices remained stable. The average sales price was $284,780, just .3% more than the average price in October 2005. The median price of homes was $250,000, about 2% higher than October 2005. Connecticut is not yet seeing the declines in sales prices that other parts of the country are experiencing.
National Trends: The national outlook for real estate shows prices dropping in most states. According to the National Association of Realtors, “…the midpoint price for an existing home sold during the summer dipped 1.2 percent year over year to $224,900. Some 45 metropolitan areas saw home prices decline.”
Interest Rates:CHFA rates dropped to 5.25%. For more on CHFA’s rates, programs and limits, visit www.chfa.org. According to Kiplinger’s Forecasts, interest rates will remain steady - no increases or cut likely:
“The inflation rate is easing, but interest rates won’t follow anytime soon. Officials at the Federal Reserve are surely pleased with the October inflation report showing another big, energy-fueled decline in the Consumer Price Index (CPI) and a modest 0.1% rise in the closely tracked core CPI, which excludes food and energy costs.
However, Fed officials don’t think the economy is out of the inflation woods yet…. In their last policy meeting in late October, Fed officials noted that core inflation “remained undesirably high.” They also voiced concern about a possible upward drift in the future inflation expectations of businesses and consumers, which could further fan the flames of price growth, “if core inflation remained elevated for a protracted period.” This is Fedspeak for no rate cuts on the horizon.
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A Diamond in the Rough? - Bridgeport, CT
November 19th, 2006 categories: Central Connecticut News & Information
Bridgeport, CT, was recently named one of the Top Ten Cities - Where to Buy Now, by CNN/Money.com - Number Three, to be precise. I was surprised, although I shouldn’t be. Looking at Bridgeport purely from a financial standpoint, the numbers make sense.
The editors project that in the next five years, home prices will rise by 63%. By any measure, that’s a good investment.
Bridgeport is a bargain when compared to neighboring communities in Fairfield County. The average sales price in Bridgeport this last quarter was $241,000. The average sales price for the same period in all of Fairfield County was nearly $752,000.
The last place you’d expect to find undervalued real estate is in tony Fairfield County, home to ultra-exclusive towns like Greenwich and Darien, where the Masters of the Universe retreat after a tough day on Wall Street.
But a mere 20 miles up the coast lies the hardscrabble city of Bridgeport, which has long suffered from sleazy politics and urban decay but is finally cleaning up its act.
But the wealth is starting to spread: As more businesses have left New York for Greenwich and Stamford, more middle-class workers - entry-level professionals, executive assistants, and so on–have come too, and they’re keen to take advantage of bargain prices.
The authors caution that the price increase is dependent upon New York’s continued growth. That can be said for all of Fairfield County and even New Haven County. But what I think makes Bridgeport most susceptible is its reputation -epecially for people with kids. Like many cities, Bridgeport has struggled with crime, drugs, corruption, and the flight of businesses and residents. The City has worked very hard to change these quality of life issues and I think real progress is being made.
Other than concern for quality of life issues, Bridgeport makes a lot of sense for investment - location, location, location. It’s an affordable city that is close to New York and other regional cities like New Haven & Stamford and it’s within one of the wealthiest counties in the country. And because it’s affordable and positioned so well, it can’t help but attract people - people who work in the homes and businesses of all those wealthy Fairfield County residents but can’t afford to live in the same towns.
The Urban Land Institute conducted an analysis of Bridgeport which is equally optimistic, including a report of Real Estate Market Opportunities.
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