Connecticut headed into the fall home buying season with slower sales in August but with purchase prices that were the highest for the month in five years, a new report Wednesday shows.
Across the state, sales of single-family houses fell more than 4 percent in August, while the median sale price — in which half the sales are above, half below — rose 2.4 percent, according to the report from The Warren Group, which tracks housing trends in New England.
Connecticut’s housing market is still recovering from the last recession, which lasted in the state from March 2008 to February 2010. While experts agree the market has stabilized, the market is not following a typical path of recovery: sales gaining momentum followed by prices.
Real estate agents say slow sale and price gains, like those reported for August, are evidence of a different reality. Buyers, they say, are looking for houses — across all price ranges — that are both priced well and renovated. It is that limited number of properties that are commanding higher prices, sometimes in multiple bids, they say.
Here are some key takeaways from The Warren Group’s Wednesday report:
Statewide Median Price Up
The median sale price for a single-family house was $271,500, up 2.4 percent from $265,250 for the same month a year ago, and the highest for the month of August in five years. But the median was still 14 percent below the most recent peak for August of $314,450 — reached in 2007.
Hartford County A Bright Spot
Hartford County saw both its single-family house sales and median price increase in August, bucking the trend of all other counties that saw prices and sales going in opposite directions. The median sale price jumped 8.2 percent to $243,000, from $225,000 for the same month a year ago. Sales increased 3.8 percent.
State Could See Price Gain For the Year
Through the first 10 months of the year, the median sale price for a single-family house in Connecticut was up 4 percent, to $260,000, compared with $250,000 for the same period last year.
Timothy Warren, The Warren Group’s chief executive, said he isn’t expecting a major move up or down.
“It just seems as though the pricing and the sales volume, they edge up and then they go back down,” Warren said. “The net effect is a flat market.”
Rising Interest Rates Could Hold Back Gains
Despite the signs of gains in Warren’s report for August, rising mortgage rates could make buyers wary of moving to bigger, more expensive homes — and taking on a higher monthly mortgage payment, Warren said.
Mortgage rates on 30-year, fixed-rate mortgages hit a new, seven-year high, averaging 4.72 percent, according to mortgage giant Freddie Mac. The rate is about 1 percentage point higher than a year ago, but still low when compared with the double-digit highs of the 1980s.
Recent Job Growth In Connecticut Could Be A Boon
A housing market’s recovery depends on job growth and the confidence that comes with it to make big purchases, such as a new home.
Employers in Connecticut created a net 1,100 new jobs in August, the fourth straight monthly gain and enough to push the unemployment rate down one-tenth of 1 percent, to 4.3 percent.
Condominium Sales Holding Their Own
Sales of condominiums rose nearly 4 percent in August, while the median sale price gained nearly 5 percent, to $177,950 from $169,900 for the same month a year ago.
To read more, visit The Hartford Courant.