By Lee Howard
Publication: The Day
While sales of Connecticut single-family homes sprinted ahead in October, New London County real estate took a breather - temporarily shaken, analysts said, by employment concerns at three of the region's biggest employers.
Home sales statewide were up 11.5 percent in October compared with last year, but New London County saw a 1 percent decline, according to figures supplied Thursday by The Warren Group, publisher of The Commercial Record. The slight downturn ended a run in which the region had recorded sales gains in five of the previous six months.
Les Bray, an agent with William Pitt Sotheby's International Realty in Stonington who provides monthly analysis of local trends, said he had expected numbers to be higher statewide this October, given last year's financial-sector collapse that led to a Wall Street crash and this year's creeping recovery.
But he wasn't surprised local numbers were flat, given uncertainties at Foxwoods and Mohegan Sun casinos, where revenues are down, and at Pfizer Inc., which is downsizing after its merger with Wyeth Pharmaceuticals.
The casinos, he said, had been a ripe employer for lower-end buyers, and Pfizer had supported much of the middle-income market.
"We're dependent on both," Bray said. "That's what's driven sales activity through the years. Now there's some uncertainty attached to them."
Barry Rosa, a vice president with Prudential Connecticut, said real estate prices are "fundamentally driven by consumer attitudes." And he agreed that operational difficulties at the casinos and concerns among Pfizer employees about their futures could have led to New London County's lower sales figures.
But he said flat sales over a one-month period was nothing to get worried about, and suggested that with inventory levels finally showing stability and deposits increasing over the past five months by about 40 percent, there may be a real-estate rainbow beyond the horizon.
"It's looking very much like a traditional marketplace, and that's how it's been for the past few months," Rosa said.
Statewide, sales have been helped by the $8,000 first-time homebuyers' tax credit, which has been extended into next year. Agents also hope that a new $6,500 tax credit for some established homeowners will boost sales in the coming months, encouraging move-up buyers to get into the real-estate game as well.
Rosa said about 30 percent of real-estate sales statewide currently are to first-time buyers, many egged on by the special $8,000 tax credit.
He added that the two tax credits, plus the current 5 percent mortgage rates, are "kind of a neat combination … and sixty-five hundred bucks is nothing to sneeze at."
"The tax credit that's being offered to homebuyers has certainly stimulated home sales in Connecticut and elsewhere," said Timothy M. Warren Jr., chief executive of The Warren Group, in a statement. "And while unemployment remains a concern, I think people who have jobs are probably feeling a big more optimistic about the financial markets and the overall economy."
Still, median prices were off from last year, with single-family homes selling for $210,000 in October, a 6.7 percent decline. The year-to-date median price of homes in the area stood at $215,000 in October, more than 10 percent off from the previous year's median of $240,000.
The median condominium price also declined in New London County in October, down nearly 5 percent from a year ago at $165,875. But October condo sales surged, up nearly 30 percent.
Rosa said that while prices in New London County are down, other areas of the country are already seeing a rebound. Prices locally are sure to follow, he added.
"That part is almost over, if it's not over already," he said.
New London was the only county in October recording a decline in sales compared with last year. Middlesex, Windham and Fairfield counties saw strong increases of nearly 20 percent or more.
Despite the October numbers, year-to-date home sales statewide are off more than 9 percent and prices are down 11.3 percent compared with last year.
"While gains in sales volume are pointing to a housing recovery," Warren said, "we have to keep in mind that home prices are still declining year-over-year, so the housing market hasn't completely turned a corner."
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