Despite pandemic, eastern Connecticut housing and rental markets not seeing dip
In eastern Connecticut, some in the housing and rental markets have been surprised by relatively strong performance in April and May, given the pandemic.
Rent money in Connecticut for the Simon Konover Company is due on the 10th of the month, and collections in both April and May were down just 2%, Vice President Newt Brainard said. The company owns and manages more than 7,000 units across New England, and Brainard didn't see geographic variation in the rates of people making rent payments.
"It's a little bit disconnected from reality," Brainard said of the strong rent collection numbers. "I'm not quite sure why, but at the moment we don't see any big issues plaguing us in southeastern Connecticut."
Eastern Connecticut Association of Realtors CEO Susy Hurlbert was also surprised that sales have remained strong.
Brainard and Hurlbert spoke in a virtual roundtable ECAR and the Chamber of Commerce of Eastern Connecticut held Wednesday afternoon on the topic of "trends, adaptations and opportunities" in real estate.
Hurlbert said last month, the number of single-family home closings actually increased by about 1% over April 2019. She also said the median price increased 15% over this time last year, to $247,000, and the number of days homes spent on the market decreased slightly.
ECAR board President Greg Hanner commented, "We are seeing multiple offers. The people that are out there are serious buyers, and I am repeatedly seeing multiple-offer situations, and not just one or two, and they're going over ask."
Hanner thinks the increase in median sale price is because higher-end buyers are continuing to close, whereas real estate agents may see delays in closings on the lower end because of income verification issues.
Hurlbert said that during the pandemic, "the whole process of a transaction from A to Z has really sped up and become a lot more efficient."
While it's not the case nationally, she said Home Builders & Remodelers Association of Eastern Connecticut President Craig Caulkins told her that builders are getting a lot of new contracts.
Hurlbert also noted that Lawrence Yun, chief economist of the National Association of Realtors, said 60% of buyers and 90% of sellers believe prices are stable, as if there were no pandemic. Yun also is predicting mortgage rates will go below 3% later this year.
Interest rates "are still unbelievable" and have been sitting around 3% for a 30-year fixed rate, said Heather Cini Roberts of the Niantic-based Norcom Mortgage.
She said the increase in demand for refinancing has made the back end tricky, that it's a big push for underwriters, appraisers and attorneys. Roberts said applicants for purchasing and refinancing have a little more work because Norcom is requiring more documentation, and bank statements are now expiring in 60 days rather than 90.
Roundtable participants also discussed mortgage forbearance. Chamber President Tony Sheridan said it seems to be a common practice for banks to tack payments owed onto the end of the mortgage, while CorePlus Credit Union home loan specialist Susan Dombrowski said some might require people to pay all missed payments in a lump sum at the end of the 90-day period.
"These folks have no chance of getting together three months' worth of mortgage payments at the end, and that's really going to set people up for failure," Dombrowski said. She said each customer considering forbearance should check with their lender.