CORT’S REAL ESTATE NOTES
Commentary on Connecticut, Real Estate, and Life
SOURCE: ERIKEPHRIM.COM
RENTAL RIDDLES
The rental market in Connecticut suffers similar constraints like the home owner market. Low inventory, rapid price increases are typical. When one researches the rental market in Connecticut, there are a number of features that do not make sense. There is high demand, yet there can be rentals which are on the market for a long time. The price can be reasonable, and the location desirable, yet it is not rented.
According to data from the Federal Research, the percent vacancy rate for rentals reached an all time low in 2022 of 3.3% and then rose to 3.8%, the second lowest in recent history. The table of data is presented below.
TABLE 1
PERCENT VACANCY RATE FOR RENTALS IN CONNECTICUT
(%, 2014-2023)
YEAR | PERCENT VACANCY RATE FOR RENTALS IN CONNECTICUT
|
2014 | 5.8 |
2015 | 6.3 |
2016 | 7.0 |
2017 | 6.8 |
2018 | 6.1 |
2019 | 5.6 |
2020 | 5.6 |
2021 | 5.1 |
2022 | 3.3 |
2023 | 3.8 |
SOURCE: The Federal Reserve, St. Louis
The major drop from 5.1% to 3.3% can be attributed to the pandemic. The decision to stay in place may have extended to renters as well. The slight rebound to 3.8% in 2023 suggests that might be the case. The real estate market, including rentals, is as subject to business cycles is any other economic sector. That said, Connecticut is expected to continue to struggle with overcoming the chronic housing shortage which has plagued the state for many years. There are currently two groups locked in battle over the affordable housing problem. The conflict can be reduced to a simple question: How much local control should there be over zoning decisions and related areas. CT169Strong fights for local control. Desegregate CT fights for greater centralized government. Their impact on rentals will be felt over the years.
TABLE 2
MONTHLY RENTALS IN SELECTED CONNECTICUT LOCATIONS
CONNECTICUT TOWN | MEDIAN RENT (AS OF 4/2/24) |
Greenwich | $5,005 |
Stamford | $2,690 |
West Hartford | $2,228 |
Westport | $8,650 |
Norwalk | $2,542 |
New Haven | $2,062 |
Milford | $2,516 |
Darien | $6,650 |
Danbury | $2,513 |
Hartford | $1,451 |
Trumbull | $2,846 |
Shelton | $2,062 |
Stratford | $2,277 |
Bridgeport | $1,798 |
SOURCE: Redfin
While there is considerable variation in rents from place to place, the range is surprising: From $1798 in Bridgeport and $1451 in Hartford to $6,650 in Darien and $8,650 in Wesport. That is roughly a five-fold variation, while median incomes are a ten-fold variation.
Ken McElroy, CEO of MC Companies, did a recent video focusing on banks, but he did review the national picture for rentals starting at the 5:30 mark. The basic message is that the next couple years will lead to significant oversupply of rentals. This will lead to a significant drop in rental prices. This will lead to landlords offering concession in order to attract renters.
CONNECTICUT REAL ESTATE MARKET – MARCH
During February there was anticipation among agents that there would be a turn up in the market. That has turned out to be half true. On the one hand, at least one office has seen a significant jump in listings to such a point that the office manager suggested March could be one of the best they have had in a very long time.
On the other hand, at least one top agent with over 30 years in the business is still beating the bushes for a listing. This is like Babe Ruth repeatedly striking out. But it is not about a bat gone cold. It is about a market that is still cold.
According to a search on MLS, the state inventory of residential and condo properties is roughly 4,500. Year to date for roughly the same period there were 2500 properties listed for sale in Connecticut. The reader is reminded that there was a time when there were upwards of 30,000 lists at this time of year around 10 years ago.
However, according to the MLS, while there were 1900 closings in 2023, there has been a drop, year to date to 1700 closings. This would have to suggest that houses are on the market for longer periods. However, according to Redfin, the current average for days on the market is 45. This is reportedly down 7 days as compared with last year. So, there is something that still does not quite make sense with the market.
Despite these puzzling features, the overall sense is that the Connecticut real estate is slowly thawing. There have been other reports of spikes in selling in small towns around the state. This can be interpreted as a result of pent-up demand. But it can also be attributed to a slow but positive change in the direction of the market.
THE HUBBARD CLAUSE
The Hubbard clause, was created as a result of a 1987 New York court case (Hubbard v. 44 Warrendale Bayne Corp.). it resolved a common problem. What if a buyer needs to sell his house before he can buy another house? The ruling on this case allowed a buyer the time needed to sell his house before buying another house. The Hubbard clause has since become a contingency that can be invoked by the buyer, if needed, in a real estate transaction.
A key feature of the Hubbard Clause is the timeframe for completing the transaction. The buyer makes an offer to buy the house but only if he manages to sell his home in a specified time period. Typically, the term could be weeks or months. If the home is sold, then the buyer must notify the seller that the first transaction was complete and now he is ready to buy the house. However, there can be variations that require the services of a real estate lawyer. For example, the transaction can get complicated by the seller pressuring the buyer to either complete the transaction or even find another buyer.
Even though the Hubbard Clause is seen as favoring the buyer, the seller can have considerable control as well. The clause removes uncertainty for the seller. In some cases, he is able to solicit better offers during the term of the clause. This is a reminder that real estate transactions can be highly detailed and complex.
TOMATO TIME
Tomatoes will soon show up in nurseries. The choices have multiplied as people have become more interested in legacy varieties rather than hybrids. They compete in the stores side by side. Fast growing, high disease resistance, delicious fruit are among the points of competition. Meantime, other breeders develop new strains which can have fascinating features. Growing tomatoes in Connecticut can very rewarding. Below, I discuss briefly some types of tomatoes.
There are three general ways to plant tomatoes. The typical method is to make a hole of about 4-6 inches and then plan the root. The second method is plant them so deep the dirt comes up to the first set of leaves on the stalk. This promotes greater fruiting, along with careful pruning. The third method, which I am still experimenting with is to dig a shallow trench and lay the body of the stalk in the trench. Then, the top third with the leaves is gently turned upward while the trench is filled in. The objective is always to grow the strongest plants with the best yields. Besides the standard chemical fertilizers (e.g, Scotts Miracle Grow), there are a number of organic alternatives. Azomite is a source of trace minerals. A variation on that theme is rock dust. Some report that a finely powdered rock dust causes a late season surge of growth in the garden due to the trace minerals. There has been growing interest in bacterial and fungal amendments to the soil. The complexity of what can go into growing tomatoes is a reminder of the need to pay attention to various aspects of the plant’s life.
Brandywine - This is a legacy tomato dated back to at least 1886. Generally in the same class as a beef steak tomato, It has a rough lumpy surface and can be in the ½ pound to 1 pound range. The tomato has a slightly pinkish color inside, while tending to have a strange red color in the skin. They take 90 days to mature and are considered among the best tasting of tomatoes. There is also a wide variety of strains of Brandywine. They are mostly distinguished by color: Pink, yellow, apricot, purple, cherry and red are just a few.
Jetstar - This variety was first introduced in America in 1969. It is a smaller tomato that tends to mature sooner. It is a mild-low acid tomato. They withstand water-stress very well. They are also resistant to some forms of wilt. However, some growers find that it does not grow well under cool and wet conditions. Some look on Jetstar as a predecessor to Big Beef. The time to harvest is said to be 72 days; which would be average.
Early Girl - Early girl lives up to its name. It is a hybrid that matures in 50 days. A variant called Bush Early Girl is ready in 54 days and Juliet can take 60 days. Online sources recommend a rich soil that is both well drained and well fertilized. The recommendations about azomite and bacterial amendments would apply as well.
Big Boy -- The big boy tomato is in the top five of popular Tomatoes. It is a surprisingly successful F1 hybrid. I have grown my share of Big Boy plants and they are the highlights of the harvest. Late in the season those plants can get out of control. They are the textbook example of hybrid vigor. The creation of this hybrid is credited to Ovid Shifriss, a plant scientist who was originally born in what was to become Israel. He was hired by Burpee in 1936. By 1948, he had developed Big Boy after working to establish inbred lines of tomato plants that became the parental line for the Big Boy hybrid.
Goliath - This variety goes by many different and confusing names: Bush Goliath, Goliath Bush, Hybrid Goliath, Original Goliath. The range of names corresponds to a range of results in the garden. Some can produce fruit that is up to 3 pounds. Others will produce smaller versions and have a different look. Still, thick, rugged stalks make it a sturdy plant. Some claim remarkable yields of 40-70 fruits per plant. Yet is it is still a sort of niche plant compared to the more popular ones. The heirloom variety dates back to the 1800s. But Goliath hybrids are dated back to the 1980s. There is a variety, that ripens a week earlier than Early Girl. It claimed that it is disease resistant, tasty, and gives good yields. Some claim the heirloom variety outperforms the hybrids. and still delivers hearty flavor, good disease resistance and generous harvests. Ideal for container growing. Other varieties can take up to 78 days to ripen.
Carbon - The origin of this tomato is unclear. The earliest mention is from the 1990s. It is described as the darkest of the dark purple tomato varieities. It has won a number of taste contest. It is described as having complex flavors and a dense meaty flesh. They can get up to 10-12 oz. They mature in 90-95 days. My experience with them is limited. They didn’t seem to do well. I will try again.
Note on the publisher: Cort Wrotnowski is a real estate agent who works with Berkshire Hathaway in Old Saybrook. Cort is also a biotech analyst, Chairman of the Greater Education Council of Connecticut, and publisher of Yankeetea.news. Besides being an inveterate writer, he believes educating customers is extremely important.
NEXT ISSUE - 4/16
THE MOVING MARKET
A FEW LISTINGS
COMMUNITY CENTERED DESIGN
WILDCRAFTED COCKTAILS
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