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He's right. Consider your typical developer's Fairfield County Colonial that sold for $450,000 in 1995, then sold again for $900,000 in 2005. Can we really expect it to fetch $1.8 million in another 10 years? No, it's not worth it. And if cookie-cutter construction projects were to edge toward $2 million, what about the really nice homes? Are they worth $50 million?
Another factor stalling sales: Builders are more cautious. Loads of less-than-lovely older homes were being snapped up by builders at inflated prices, torn down and replaced with $2 million spec houses. But home builders are in a holding pattern too, waiting to unload their current inventory in order to re-invest.
"I tell buyers they're stupid if they don't get in now," says one broker with some impatience. More diplomatically, the National Association of Realtors avoided the word "stupid" when launching their new consumer campaign, which declares, "It's a Great Time to Buy or Sell a Home." Sellers may take issue with the second half of that statement, and it's not a great time to buy anything, anywhere. Here are our tips for making the best of the changing 2007 real estate market, based on advice from experts.
1. It's a great time to make a long-term investment
At press time, the 30-year fixed mortgage rate was around 6.2%, the lowest we've seen since January 2006. NAR economists are forecasting a drop to 5.9% around mid-February, at which point rates may tick back up. So money is cheap and Connecticut housing prices are flat, having appreciated just 1.25% in 2006. Plus, there's virtually no chance you'll get into a bidding war over the property you love. When prices do rise, you can pat yourself on the back for buying at the bottom of the market.