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Residential R.E.: Homing in on a Growth Sector
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Business New Haven
3/17/2003
By: BNH
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While much of the economy stagnates, or worse, shrinking residential real-estate inventories in the Northeast have buoyed optimism for the coming 12 months on the part of residential real-estate brokers.
According to a recent survey by the Council of Residential Specialists (CRS), a non-profit affiliate of the National Association of Realtors, more than 90 percent of residential Realtors in the Northeast describe their business prospects for 2003 as "good" or "excellent."
A dearth of new-home construction in the region makes it a sellers' market, according to 79 percent of respondents to the CRS survey. More than half of Realtors reported a smaller inventory of homes for sale in 2002 compared to 2001. Nationally, Realtors' opinions were about equally divided between those who thought it was a sellers', vs. a buyers', market.
Of the 79 percent reporting a sellers' market in the Northeast, nearly all said they experienced "bidding wars" in 2002, causing some sellers to receive more than their asking price. Almost half of respondents in the Northeast reported a large number of bidding wars in their areas, while just four percent reported none at all.
The effects of a sellers' market are manifest in the fact that 86 percent of respondents to the CRS survey reported "higher" to "much higher" home prices in 2002 compared to 2001. Nearly three-quarters (72 percent) report prices ten percent higher or more in their respective states.
Key home-buyer motivations are similar in the Northeast to those in other parts of the country, with low interest rates and a sense that a home investment is more stable than the stock market figuring in 95 and 76 percent, respectively, of answers.
Of those purchasing a home in the region last year, 60 percent were reported to be "typical" move-up buyers, compared to 48 percent in 2001. First-time buyers comprised 27 percent of the market in 2002, compared to 32 percent the year before.
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