Hartford Business.com
July 05, 2008
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Connecticut is no longer immune to the declines in home prices and sales that have enveloped the rest of New England.
In March, the number of homes sold in Connecticut fell by 27.9 percent and the number of condominiums sold dropped by 35.8 percent from March 2007, according to data from the Warren Group.
The median price of a single-family home in Connecticut dropped 7 percent in March, falling to $268,250 from $288,500 in March 2007. That was the steepest decline since prices fell 7.9 percent in April 1995.
For the entire first quarter of 2008, home prices are off 5.8 percent from last year. The number of sales also are down. For the first three months of 2008, home sales fell by 27.3 percent and condo sales by 33.8 percent compared to last year.
‘A Different Story’
Connecticut had avoided the housing slump throughout 2007.
“But this year, it’s a different story,” said Timothy Warren Jr., CEO of the Warren Group. “The state is quickly catching up with the correction affecting Massachusetts and Rhode Island.”
Home sales were down in every Connecticut county in March compared to a year ago, paced by a 33.7 percent drop in Litchfield County and a 30.8 percent decline in New London county.
Hartford County did not fare much better, as home sales fell by 25.9 percent.
As troubling as the sales volume figures are, the rapidly declining prices for homes sold may be even more worrisome.
“This is the biggest drop in Connecticut in 13 years,” Warren said. “It’s clear that after such a long run-up in prices … the state was due for a correction.”
Foreclosures Pile Up
Warren Group data had shown Connecticut home prices increasing by double-digit percentages for nearly every month between 2002 and 2005.
Connecticut appeared to be isolated from the troubles that ravaged the housing markets in Massachusetts and Rhode Island — and many other parts of the country — because prices and sales remained relatively steady. But a rash of foreclosures, Warren said, means that the market’s supply has been inflated and is now outpacing demand.
“It will take some time before the number of foreclosures starts to stabilize and home sales and prices pick up,” he said.
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