Connecticut home prices rose for the second straight month in May, but sales sank 14 percent, The Warren Group reported Tuesday.
The state’s median price for single-family homes was $288,000 in May, up 5 percent from $275,000 a year ago. Through the first five months of the year, the statewide median price rose 2 percent from a year ago, from $270,000 to $275,000.
“Connecticut, thus far, is weathering what really is a nationwide housing slump relatively well,” said Terry Egan, editor in chief of publications at The Warren Group, which publishes The Commercial Record.
The Boston firm also tracks residential real estate in Massachusetts and Rhode Island, where year-to-date prices are down 3 percent and 5 percent, respectively, from last year.
Rising prices in Fairfield County have helped Connecticut fare better than its neighbors, Egan said. The median price in Fairfield County in May was $600,000, up 10 percent from $545,000 a year ago.
“That seems to be bolstering the entire Connecticut market,” he said, adding that the county’s proximity to New York City makes it attractive to home buyers. But as prices rose, sales fell 14 percent statewide, from 3,671 a year ago to 3,169 in May. Year-to-date sales totaled 13,151 from Jan. 1 to May 31, down 5 percent from 13,809 sales in the first five months of 2006.
In New Haven County, sales also fell 14 percent in May compared with a year ago, from 809 to 693. Year-to-date sales fell 2 percent, from 2,994 to 2,931, and the median price fell 2 percent, from $256,000 to $254,000.
“There seems to be a lot of activity in the lower price range,” said Lee McParland, manager at Calcagni Associates Real Estate in Cheshire. “Anything over $500,000 is really a very sluggish market at this point.”
Homes that are priced right can sell quickly, though, said Tom Casey, office leader at Prudential Connecticut Realty in Orange.
“Some of them are coming on (the market) high, as far as pricing goes,” he said. But many sellers realize their house likely won’t fetch as high a price as it would have a year or two ago, and most are pricing appropriately, he said.
Looking ahead, Egan said home prices are likely to drop in Connecticut as mortgage interest rates inch upward. Another trend that will push prices downward is the string of subprime mortgage lenders faltering because of defaulting loans, he said.
“There are certainly some factors that have been introduced to the market only recently. Lenders are tightening their underwriting standards,” he said. “They are requiring better credit. That means there will be a smaller pool of qualified buyers out there.”
by Cara Baruzzi, http://www.www.thewarrengroup.com