Sixth-Straight Yearly Decrease For House Sales In State
0.5 Percent Decline In 2010 From 2009
Kenneth R. Gosselin
February 17, 2011
Despite a strong start, house sales in Connecticut fell for the sixth straight year in 2010, leaving the total at its lowest level since 1991 and providing little momentum for much of a rebound this year.
Sales of single-family houses fell by a modest 0.5 percent, the smallest year-over-year decrease in the past six years, according to a report Thursday by the Warren Group. But the decline still brought sales down to where they were at the depths of the devastating real estate recession of the early 1990s.
For the full year, a total of 24,270 single-family houses changed hands, continuing a drop that started after a peak of more than 45,000 sales in 2004. The numbers varied widely across the state's eight counties, with Fairfield showing a strong gain and Hartford declining more steeply than the state average.
And now, as the outlook for job growth in the state remains sluggish, some experts say the housing market is facing another lackluster year, perhaps even two.
A broad-based, robust improvement in the economy that lifts all occupations will be needed for the housing market to make any real gains, said Steven P. Lanza, editor of The Connecticut Economy, the University of Connecticut's economic publication. And that isn't expected this year.
"The issue is whether it will be flat, up a little, down a little," Lanza said. "We'd consider ourselves lucky if we were where we are now a year from now."
Hopes for a rebound surged early in 2010 as sales were spurred on by the federal home buyer tax credit aimed at first-time owners, designed to jumpstart the market. But when the credit ended mid-year it didn't have the desired effect. Sales in Connecticut and nationally slowed and, by December, registered a 16 percent decline in Connecticut, compared with the same month in 2009.
The median sale price — at which half the sales are above, half below — rose 4 percent in 2010 to $250,000, from $240,500 in 2009, Warren Group said, citing a bright spot in an otherwise slow market.
But some have questioned whether that represents a true increase in prices. Some economists have said the median price may more accurately reflect a shift to second-time buyers moving up to larger, more expensive homes, now that the credit is no longer coaxing first-time home buyers into the market.
Low mortgage rates and lower prices have done little to spur activity so far this year — and the heavy snows left potential buyers and sellers more worried about driving to work or shoveling off their roofs. The recent increases in mortgage rates, combined with tighter lending standards, could hurt sales further, although rates remain extremely low by historic standards.
A separate report Thursday from the Greater Hartford Association of Realtors showed that sales dipped nearly 8 percent in January in the 57-town area tracked by the association — an early indication that 2011 is off to a slow start.
Mary Beth Bain, a mortgage banker at William Raveis Mortgage in Middletown, said she now is sensing a bit more interest, as an increasing number of potential buyers seek to be pre-qualified for a mortgage.
"It's a warming," Bain said. "It's 'Let's test the waters, let's see what's out there.' "
That's what Rachel Marcelino intends to do. In the next few weeks, she intends to put her colonial in Windsor Locks on the market. She's leaning toward an asking price of $248,000, which is lower than the $259,000 she paid seven years ago, but closer to what comparable properties are now selling for in her area.
She knows it could take some time to sell, perhaps until much later in the year. Marcelino said she could wait for prices to rise, but she would only have to pay more for her next house.
"I know it's not the greatest market," Marcelino said. "But it's six of this and a half-dozen of the other."
Although sales were off statewide in 2010, the numbers varied widely across Connecticut's eight counties. Four counties saw sales gains, with Fairfield County — hit hardest by the housing downturn — showing the strongest increase, at 21 percent, compared with 2009
Of the counties registering declines, Tolland County had the deepest, at 16 percent.
In Hartford County, sales fell 9.2 percent, to 5,850, from 6,445 in 2009. The median sale price rose 1.8 percent, to $224,000 from $220,000 in 2009.
Among other counties, median sale prices also were mixed, ranging from a gain of 6.2 percent in Farfield County to a decline of nearly 5 percent in Windham County.
Real estate agents say they expect more buyers to be in the market this year, but properties aren't going to move much faster than they did in 2010.
"There's going to be a slight uptick," Leslie Bajorski, an agent at Re/Max Precision Realty in Newington, said. "You're going to see more people put their houses on the market. Prices are going to remain relatively flat."
Reprinted with permission of the Hartford Courant.
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