Battling a 20-year low mark in home sales, Connecticut is dealing with the aftermath of the real estate crash with dwindling sales after the federal home buyer tax credit expired. But Fairfield County, home to four of the state’s largest cities is seeing a rebound in sales that could usher in a change in the state’s major housing markets.
Home sales have dropped in the majority of the country as a result of the credit’s expiration, but driven by record low mortgage rates sales of single family homes and condominiums surged higher in Bridgeport, Stamford, Norwalk and Danbury.
Despite suffering from the foreclosure crisis, New Haven has been the center of bright news in Connecticut as new home builders took out more than 500 building permits to construct new homes, more than anywhere else in the state. The figure is welcome news for homebuilders who took out more than 6,000 permits a year during the boom. Students attending nearby Yale University are looking forward to the new housing, but it will be nothing like the easy money days of the real estate boom when they graduate to buy a home. New Haven housing prices are projected to decrease an average of 7.3% in 2011.
The Greenwich market, which saw higher sales during the summer, slumped after the credit expired, despite a large inventory of foreclosures priced low by banks to get the inventory sold and off the market. Expensive estate homes priced between $1-million and $1.5-million shot up, however, as financial executives picked-up their annual bonuses from Wall Street to buy homes on the cheap.
More than two dozen hedge funds make their home in Greenwich. But the community has plenty of challenges ahead and is forecast to experience average housing deflation of 8.4% in 2011.
In Bridgeport home sales improved for a while, but the foreclosure crisis is having a menacing affect on the market when it comes to home prices.
Despite an increase in sales and near record low mortgage rates, the area is under going a soft market when it comes to home prices increasing. Tight mortgage market conditions are prohibiting many home buyers from making a purchase, keeping a tight grip on bank lending. As a result the market is projected to remain sluggish over the next year and Bridgeport home prices are forecast to decline an average of 6.9%. Stamford, Danbury and Norwalk will sustain similar drops.
High unemployment crippled home sales in Hartford towards the end of 2010 as most home buyers, leery of a troubled economy shed any idea of buying a home except in the best of employment and economic conditions. The state capitol has been devastated by the foreclosure crisis and the fallout from the troubled economy is likely to last a number of years, despite record low mortgage rates.
An over supply of homes on the market will keep sales sluggish through 2011 as homeowners who want to move to another property have trouble selling their own home to do so. Average home prices in Hartford are forecast to sustain another decline for the year of 6.3%.