When it comes to assessing the value of your home on the real estate market, what’s better, an agent or an estimation program? While the latter is definitely quicker, speed can make accuracy fall to the wayside. In some instances, being slightly off is insignificant; in real estate, however, gross inaccuracies are devaluing Connecticut real estate.

According to a piece in the Hartford Courant, Zillow.com, a popular tool for sellers in assessing the worth of their properties, uses an algorithm to assess a home’s worth, taking into account publicly available data like sale price, square feet, number of beds and baths, and recent home sales in the area. The site claims to not factor in foreclosure sales. Yet, while the site claims to have a 7.9-percent error rate nationally and 6.8-percent rate in Connecticut, a fair amount of sellers in Connecticut find that Zillow’s estimates are greatly above or below the actual value.

The Courant cites an instance in Glastonbury in which two home sales lowered average neighborhood prices, and about this, Enza Dandeneau, of Prudential Connecticut Realty in Glastonbury, told the newspaper:

“Zillow deals with absolutes and that is not always valid. You could have two houses, exactly the same style, one with updated features like granite countertops, central air and hardwood floors, and the other without. That makes a huge difference.”

On a similar note, Evan Berman, of ERA Broder Group in West Hartford, explained that a website can’t offer the same accuracy as a professional:

“The simple fact is they have never been on the street or the town, let alone stepped inside the house to see the condition and enhancements. If your house is above or below average, the Zestimate [Zillow’s estimate] is inaccurate.”

Essentially, consulting a website can be a reference point in selling a home and gathering information, but the value should not become the be-all-end-all in obtaining a price. While a website like Zillow takes into account only data, a local real estate agent is more familiar with each neighborhood’s and town’s market conditions and can produce a closer estimate.

A large percentage of the towns in Connecticut are considered commuting communities. Some of these towns, such as Cheshire, are within driving distance of the state’s major cities, such as Hartford, Waterbury, or New Haven. When considering the real estate in such a community, research options for commuting. Is there public transportation, such as trains or buses? How close are state routes and highways?

One reason Fairfield County is considered desirable, real estate-wise, is commuting to New York City. Running from New Haven all the way to Grand Central Station in New York, the Metro North Line allows residents to easily commute into Manhattan for work. As a result, nearly 60,000 commute daily from various towns in Fairfield or New Haven Counties into Manhattan, but railroad stations along the New Haven line have roughly only 20,000 parking spots total. Residents wanting to park their vehicles at the station need to purchase a permit and face extensive, years-long waiting lists to obtain one.

As detailed in the Wall Street Journal, the Fairfield Parking Authority has a list of more than 4,200 individuals for permits, resulting in a six-year wait. Getting a permit is an ordeal, with those waiting in line for several hours and those with them holding onto them for many years. At the same time, the proximity to a train station isn’t the only benefit of a permit; compared to prices for parking garages, a permit for a station spot runs about $340 per year.

But what about other alternatives? The station in Fairfield, unfortunately, only has minimal room for bike lockers. Eugene Colonese, the transportation department’s rail administrator, is looking for a solution. He told the press the task force is, “looking for the best way to get commuters to stations, a balance we think will be between building more transit-oriented development, looking at shuttles and other public transportation, as well as parking improvements.”

While the price of homes for sale in Connecticut is increasing in some areas, commercial real estate is going the opposite direction, staying stagnant, or, worse, falling down. Depending upon your expertise, now can be a good time to be a real estate agent in Connecticut, as home prices are going up. For example, prices are almost back to 2005 levels in the Danbury area.

A piece in the Housatonic Times describes the real estate climb in Brookfield, a suburb north of Danbury. With a desirable location and good school system, Brookfield has seen housing prices go up in 2009 and 2010. Agents in the area claim prices are at a “new normal,” indicating the gap over the past six years is closed.

But real estate in 2011 is not the same as 2010:

Mrs. Hensal [owner of Hensal Realty] said the market has changed since the subprime mortgage crisis that surfaced about three years ago.

“It used to be that maybe you could get by with a low credit rating,” she said. “That is no longer the case.”

Buyers are also more cautious. But the combination of these factors has led agents in the area to expect a surge in home buying – only with better responsibility on both ends.

Almost an hour east of Brookfield, however, Hartford has been better days for commercial real estate. A story published in the Hartford Courant discusses a recent survey conducted by the Society of Industrial and Office Realtors in which 33 out of 50 contacted local brokers responded. The brokers, in observing commercial and industrial real estate in central Connecticut, expect prices to stay flat or decline. Lease rates are expected to take a similar pattern.

The recent sale of the Connecticut River Plaza is one distinct example. The former location of UnitedHealthcare, which moved down the street to building City Place, was recently sold for $6.7 million, or, as the Courant article specifies, $12 per square foot.

The Connecticut Post recently ran a story about Oxford, CT, a town near the center of the state. Describing it as a “boomtown,” the Post article makes Oxford seem like the center of Connecticut real estate, with seniors attracted to the area, more homes being built, and residents needing more schools and closer retail.

With a rural, bucolic character, Oxford is near major roads that lead to Bridgeport, Waterbury, and Danbury but is also located near a forest. This combination of character, convenience, and lower home prices has attracted residents to the area over the past few years. The Post article explains that Oxford’s population has grown 46 percent over the past 20 years, from 8,600 to 12,600 residents. In the 1990s, families were attracted to the area. Over the past decade, seniors are the largest growing population in Oxford.

Meadow Brook Estates and The Village, both housing for those 55 years old and up, have brought in many seniors and have resulted in 100 new homes being built in town, and 60 more are planned. The Village even has a golf course. Meadow Brook offers handicap access, single story homes, and services for plowing driveways and mowing lawns.

A primary concern depicted in the Post piece is whether Oxford can handle all of these residents and maintain its character. On one hand, those living in the town for many years want to keep up its rural charm. Those who moved in the area, however, want closer retail, and the growing population at one point resulted in a town high school being built.

With such a surge of new properties being built and many new homes for sale in Connecticut, a change is inevitable to meet the needs of the residents. Otherwise, those who moved into Oxford over the past 20 years may just move away.

Some simply purchase a property as a home. Others, however, purchase real estate to rent out the property or to build up an investment portfolio. If you fall into the latter category for purchasing Connecticut real estate, the Connecticut Real Estate Investors Association (CT REIA) is holding workshops in January and February for those considering purchasing a property for this purpose.

According to a press release, the workshop will focus on the basics of investing in real estate, such as wholesaling, rehabilitating the property, selling quickly, or holding on to it to make an income or profit. As the press release explains, those attending this workshop should expect to learn about:
• Working with REALTORS® in buying and selling
• Finding a good investment property
• Inspection
• Evaluating a deal and making an offer
• Wholesale properties
• Dealing with retailing
• Being a landlord; and
• Creating income and wealth

Although real estate has a greater tendency to be a sound investment, purchasing a property for this purchase has advantages and disadvantages. Investment generally includes purchasing a building and renting it, improving or upgrading and selling, or wholesale properties. Many turn to real estate for this purpose, as it is easier to finance than most other investments. Only a portion of the down payment is needed.

Real estate is a non-liquid investment, however, and if you own a property, you need to maintain it and pay taxes regularly.

While the real estate market has been in flux, it appears to have reached a plateau, and in some areas, renting, as opposed to owning, has become more desirable. Purchasing a property in Connecticut allows you to capitalize on this and gain income through renting out apartments or a building. The CT REIA workshop will be held in Meriden on January 20, February 2, and February 9 from 6 to 9 p.m. To attend, visit their website and register.