Current Absorption Rates

Explanation of absorption rate: The rate at which available homes are sold in a specific real estate market during a given time period.  If you look at the number for Wallingford you can say “If market conditions do not change and if no new listings come on the market it will take 7.2 months for the current inventory to sell at the current pace of the market.  A balanced market’s absorption rate is typically between 5 – 7 months.”

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Time to List?

Our commercial agents are finding themselves busy, and happily with people who have decided to list properties that they may have been sitting on since the Great Recession started.  Unlike prior business cycles, we didn't go into this most recent decline with a lot of unused space.  That means that supply of desirable product is short, and is going to get shorter.  Without new construction to compete, people holding other space may and should consider listing it now.

Mortgage rates have gone up 15% in residential products, and it is very likely that commercial rates will quickly follow.  Banks can't wait to raise interest rates, which are too low for their comfort now.  Any advantage to be gained by waiting to see more property or by watching national trends will easily be wiped out by higher financing costs.

Connecticut has lagged in job recovery, and has just now gained back half of the jobs lost during the recession.  The rest of the country is largely fully recovered, and prices are rising, rapidly in some places.  Can we be far behind?  If you didn't buy when rates were lowest, and you didn't buy when economic conditions were at their worst, you have only yourself to blame, if you don't look at the writing on the wall and buy as quickly as possible!

Users are Out There

We have been happily surprised this season by the interest in listed properties by users.  During the darkest days of the recession, most people who were looking at properties were investors, usually what we call "bottom fishers"--people looking to get a really good deal from the misfortunes of others.  This is especially true when they have cash and can close immediately.

While we expected the early spring market to be more of the same, we are finding that showings are more often for businesses and organizations that need space.  There are a lot of start-ups, and also places that need to expand.  This is an excellent sign for the improvement of the commercial real estate market, and one that we hope to see continued in the weeks and months to come!