State housing market shows signs of life
Observers say: Fairfield County communities bouncing back
The housing market is improving across New England, and Connecticut is leading the way in one important category.
The RE/MAX of New England July Monthly Housing Report, relased last week, shows that Connecticut led the other five New England states in pending sales -- a gain of 50.6 percent year-over-year.
The total number of transactions here is up 22.5 percent, with the median price climbing 1.1 percent, according to RE/MAX.
Fairfield County was a major contributor to the state's turnaround with disparate communities like Bridgeport, Stamford and Weston all showing positive signs.
In Bridgeport, the number of closings was down 3 percent in July compared with July 2012, but the average sale price was up 5 percent. And when compared with June, the July figure is encouraging.
"Bridgeport had a stellar month in July. It's beginning to show a nice comeback," said Virginia Klein, a Realtor with RE/MAX's Westport office. "It's up 53 percent in closings, comparing June to July."
The average sales price was up 11 percent in July, compared with the prior month.
The number of closings in Stamford in July was 50 percent higher than in June, and the average sales price was up 9 percent from June. Comparing July to July 2012 in Stamford, closings were up 22 percent, though the average sales price was down 2 percent.
While Bridgeport and Stamford showed strong July over June results, the Weston market was even more impressive, with a 92 percent jump in closings, month over month, although with a 5 percent drop in the average house price.
Its year-to-year comparison also was impressive, with 65 percent more closings in July compared with July 2012. The average house price in the town also was 15 percent higher, compared with July 2012.
"Weston and Wilton are comeback towns. They are really going through a number of transitions," Klein said, adding that they are seeing an influx of home buyers who cannot afford to make purchases in upscale communities closer to Long Island Sound. "There's a flight of home buyers inland from places like New Canaan and Westport."
With rental rates for upscale apartments in the $2,500-plus range, some people able to make a down payment are opting to pursue buying a home, she said.
"The rental inventory has gotten low, and prices have increased. Therefore, people can buy equal to what they are paying in rent. The rental market is helping the investor and first-time home buyer buy in," Klein said, and some sellers, no longer needing a large home, are purchasing smaller homes.
The RE/MAX report also shined a light on the disparity of home prices in Fairfield County compared with the rest of the state.
The median price for a home in Stamford is $463,500, while it is $160,000 in New Haven, $153,000 in New London and $85,000 in Waterbury.
Stamford prices are influenced by market demand as lower Fairfield County benefits from an inflow of people, unlike much of the rest of the state.
"The state isn't attracting workers, so therefore sales prices are generally stagnant. There's not a big net job creation," said William Raveis, chairman and chief executive officer of William Raveis Real Estate. "Internal movement is what's moving the market price."
But the fact that there is an overall increase in sales in the state indicates that people are generally confident about the economy, he said, adding that new listings in Connecticut rose from 49,784 in July 2012 to 50,080 last month.
"We're less exuberant in the booms and busts. Connecticut is the land of steady habits," he said, referring to the unofficial state motto. "Lower Fairfield County is doing better because of the spill-over from New York City. I wouldn't interpret this as a renaissance in the housing market."
A recovery is occurring across the country, according to Daren Bloomquist, vice president of Realty Trac, which issued its first "Housing Market Recovery Index."
Rochester, N.Y., led Realty Trac's top 20 markets in the real estate recovery, based on below-average unemployment, underwater and distressed sales percentages, combined with above-average drops in foreclosure activity and increases in home prices.
It was followed by Cape Coral-Fort Myers, Fla., and Albany-Schenectedy-Troy, N.Y.
"The U.S. housing market has clearly shifted to recovery mode over the past 18 months," Bloomquist said in the report, "with home prices consistently rising and foreclosures falling closer to pre-housing bubble levels."