Connecticut Shifting into High Gear?

A new report from the Connecticut Center for Economic Analysis is predicting an 8.1% increase in CT's economy this year.  That is so high that experts are backing away from endorsing the exact number, but even a growth rate of quite a bit lower would outstrip the national rate of about 3%.  It's about time!  We've been lagging behind the rest of the country--event the December housing figures show us with a decline in 2014 home sales vs. the year before, against the grain of almost every other state--and we were (almost) bound to catch up sometime.

The only big fly in the ointment is the State government's position on business issues.  That encompasses our tendency to borrow against the future, and to underfund pension obligations, both of which make our economy more precarious.  However, the Governor's latest budget proposal shows encouraging signs of trying to correct these problems, and we in the private sector are certainly rooting for both the executive and legislative branches concentrating on improving our rankings as a place to do business. 

Leaving that potential worry aside, it does seem that early indications show pent-up demand on the residential side, frequently a precursor to commercial growth.  Also, we know that there is pent-up demand on the commercial side--it's just being held in check by caution and uncertainty.  This latest prediction should give a big boost to those who've been waiting on the sidelines to act.  This is your year!

Picking Up in Late Summer?

August is traditionally a time for beaches and BBQs, not real estate.  Many people are on vacation, and those who remain start to think of Labor Day as the acceptable point at which to pick up projects like moving or expanding.  And yet, this year, we seem busy as we hurtle toward September.  A lot of what we are working on has yet to close, and our commissions so far this year still lag behind last year's, but many of our agents say that they are busier than they have been in years. 

Some of this reflects the fact that every transaction is harder than it used to be; you can't count on anything simply proceeding through to completion without a few bumps along the way.  Some, though, does seem to suggest that Connecticut may at last be joining the ranks of all the other states that are embracing recovery.  While jobs have not gotten back to their 2006 high, they are headed in the right direction.  Ditto housing prices and construction permits.  Also consumer confidence, which is evident in the proliferation of new restaurants and retail ventures. 

Maybe this is the new normal.  A less seasonal, less steady expansion, but a tentative and welcome leap forward.  Okay, a step forward.  But it's progress, and we are glad to see it!

Commercial Follows Residential

One of the truisms we know about real estate is that commercial usually lags residential by nine months to a year, whether it is going into a recession or coming out of one.  Well, here we are again.  The residential market in most parts of the country has already shifted from a buyer's market to a seller's market, largely due to lack of supply.  While Connecticut is lagging behind other places, it too is showing signs of marked improvement.  Prices here have not risen on the whole, but are certainly poised to do so at any time.  Multiple offers are commonplace lately, and inventory in certain submarkets is tight.

What does that augur for commercial sales and leases? We expect to see increasing demand and decreasing supply by the middle of the year, and much of that will be tied to consumer demand.  If you look around any restaurant, you can see that purse strings have loosened.  Retail is turning around, and, if we're lucky, office will follow.  Let's all hope so!