Connecticut Real Estate

How will rising rents impact my budget?

According to recently released data by the National Association of Realtors (NAR), vacancy rates are down from a year ago and average rent is projected to increase 5.3 percent in 2008, up from 2007's modest 3.1 percent increase. In fact, the first three months of 2008 represented the 24th consecutive increase in rental prices with experts projecting steadily increasing rental rates for several years to come.

If you are a renter or have been contemplating purchasing Connecticut real estate for investment purposes, now might be a good time to begin searching in earnest. Interest rates remain at historically low levels and prices have actually remained stable or even declined in the past year.

In addition to rising rents, vacancy rates in the Northeastern United States have dropped from a high of 7.3 percent in 2004 to 6.6 percent in the fourth quarter of 2007 (Q4). Compared to the national average of 9.6 percent for Q4 and a high of 10.2 percent in 2004, the Northeastern region typically experiences lower than average rental vacancy rates compared to the rest of the nation creating the potential for higher than average demand.

Visit the HomesandLand.com search tool to locate potential Connecticut homes for sale in your area or schedule a time to meet with a buyer’s agent. Locking in a fixed rate mortgage in a home of your very own is one of the best ways to control escalating costs and monthly expenses.

Decreasing rental vacancy rates combined with rising rents of over 5 percent annually can wreck havoc on the best budgets in a short period of time. Use the following quick example to see how much your rent could increase with an average of only 5 percent per year with a beginning rent of $1,000 per month.

Year 1 = $1,000 per month rent.

Year 2 = $1,050 per month rent.

Year 3 = $1,102 per month rent.

Year 4 = $1,158 per month rent.

Year 5 = $1,216 per month rent.

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What outdoor amenities help sell a home?

If you are considering selling your Connecticut real estate then spring and summer may provide the best time to list your property with a local agent. Not only is summer a great time for families with children to relocate while school is out, but the summer season allows potential buyers to see everything the property has to offer.

According to the 2007 National Association of Realtors "Profile of Buyer's Home Feature Preferences", outdoor amenities top the list of most sought after trends when shopping for real estate. Make sure your home looks its best by carefully considering the following desired options:

Play Space. Approximately half of all home buyers list a backyard or play area as "very important." Make sure there is a wide open space available in at least a portion of the back yard.

Fences and secured areas are highly sought after amenities, especially for those with children or pets. Be sure the fence is secure and well-maintained both cosmetically and functionally.

Patio or Porch. Nearly a third of potential home buyers specifically indicate the desire for a porch, patio or both. Consider adding a porch or patio to a home especially if it has limited living area. A close runner up is a deck for situations where a porch or patio won't fit.

Outdoor Living Area. Depending upon the location of a porch or patio an outdoor living area may be a continuation of the home or a distinctive set-apart area of the yard; in either case, weather-proof seating and lighting create a unique space potential buyers will fall in love with!

Specific things to avoid:

Insects. Make sure all wasp nests, bees and other potential pests are completely eliminated prior to showing your home and yard.

Dated Play Equipment. Don't assume children will automatically love the decade-old wooden structure. Take time to remove out of date play houses, swing sets and other children's equipment prior to showing the home.

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Is PMI still deductible?

If you are in the market for Connecticut new homes or existing Connecticut real estate then chances are you will need to purchase Private Mortgage Insurance in order to obtain a loan.

PMI or Private Mortgage Insurance premiums are typically required for buyers that finance more than 80 percent of the purchase price of the home however, there is some good news to keep in mind. Beginning in 2006, PMI premiums became deductible on federal taxes and in 2007, Congress approved a three year extension.

To determine if you should put more money down or if the tax incentives will help offset the cost of PMI, use the following:

1. Calculate the cost of a piggy-back loan versus PMI. Tighter lending standards have made it more difficult for buyers to obtain piggy-back loans at competitive interest rates so be sure to comparison shop.

2. Once you obtain an estimate for a piggy back loan versus the cost of PMI, calculate the estimated time before PMI elimination versus the pay-off of the piggy back loan. Remember, most PMI can be eliminated once you pay down 20-22 percent of the original loan.

3. Calculate estimated tax savings due to PMI premium deductions.

4. Compare the total cost of carrying PMI (including tax deductions) versus a piggy-back loan over the life of each – not just annually.

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What is the best cost to value modfications to make to a home?

If you are searching for Connecticut new homes or thinking about remodeling your home prior to putting it up for sale then it is a good idea to steer clear of these trendy mistakes.

Over-Building. McMansions are out. While about two-thirds of major metropolitan areas experienced rapid growth among larger than average homes, the trend has clearly and definitively reversed. Buyers desire quality rather than massive space that requires more maintenance, higher fuel bills and excessive taxes. Instead, focus on quality upgrades to existing space. This trend is so pronounced that 14 percent of cities surveyed have recently implemented strict building codes designed to reduce the size of homes. Likewise, large builders like Toll Brothers Inc., report the demand for smaller living area is "much greater" than that of larger square footage.

Sustainability. One look at the Cost to Value report shows the leading projects include those designed to reduce maintenance, increase efficiency and add beauty to the home. At the top of the list for 2007 was upscale siding replacement such as concrete siding, vinyl insulated windows and composite decking.

In summary, focus on quality improvements that add function, beauty and sustainability to the property over size and cost. Energy efficiency, lower maintenance, reduced taxes, lower insurance rates and other factors are the new trends driving home buyers and investors.

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How do I target the single women market for home sales?

The 2008 election demonstrates what researchers have known for some time; women are more independent than ever both financially and socially. In fact, more than half of all women are single and creating a major impact on real estate sales. Increasingly, successful single women of all ages are choosing a house before a spouse while relying upon their own money to finance the purchase.

According to research conducted by the National Association of Realtors, 2007 Profile of Home Buyers and Sellers, one-fourth of all first-time home buyers are now single women. Whether you are interested in listing Connecticut homes for sale or a homeowner or investor interested in preserving the real estate value of your home this is what you need to know about selling to single women.

1. Luxury. Single women tend to value luxurious bathrooms, kitchens and surroundings more than square footage. Well proportioned rooms, adequate lighting and quality fixtures are meaningful improvements they will appreciate.

2. Low Maintenance. Busy lifestyles and careers leave many single women with little time to deal with maintenance and repairs. Durable but attractive options for outdoor exteriors, landscaping, flooring and other materials are major selling points.

3. Security & Convenience. Single women of any age value security as well as convenience so special attention should be made for additional security precautions including fire, locks, accessibility and general location. Elderly single women are more likely to value close proximity to shopping, physicians and community-related amenities.

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What size garage is best?

Sometimes bigger really is better: especially when it comes to the garage. While larger than life living spaces are quickly losing ground, the trend toward expanding garage space shows no signs of slowing. Savvy investors searching for Connecticut new homes would do well to invest in an over-sized garage as one sure way to protect real estate value.

Here are the top reasons this trend is likely to continue far into the future:

1. Multiple Vehicle Households. The days of "his:" and "her" cars are long gone. Today’s vehicles consist of "his", "hers" and "ours" with teenage drivers, ATVs, motorcycles and other vehicles all competing for space and security.

2. More "Stuff". Storage units have become common place across the nation in an effort to store everything that does fit in the closet, attic or basement. Areas like Florida that lack substantial attic space or build on slab construction often have even more limited storage areas.

3. Hobbies. As extra bedrooms are turned into home office space, hobbies are increasingly relocated to the garage. Dusty or dirty hobbies like woodworking or car restoration are often the domain of the garage.

When searching for Connecticut homes for sale pay special attention to "other" square footage which commonly includes areas like the garage or porch. Not only is it taxed at a slightly lower rate in most areas, but it is the most eagerly sought after form of square footage on the market!

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