Region's housing market gets lift

The worst of the local real-estate downturn may be behind us.

Sales of single-family homes in November surged nearly 90 percent in New London County compared to a year ago, according to a report released Thursday by The Warren Group, publisher of The Commercial Record. That's the sixth time in the past eight months that single-family home sales have increased in the region.

What's more, for the first time in about two years, median single-family home prices increased - up 5.3 percent from a year ago.

Timothy Warren Jr., chief executive of The Warren Group, called the November numbers "good news" for the real estate market in Connecticut, which saw an overall improvement in sales nearing 75 percent. Statewide, prices declined only slightly.

"The stock market has been doing well," Warren said. "We also saw improving consumer confidence."

Rising sales, boosted by an $8,000 first-time-homebuyer tax credit that originally was due to expire in November but has been extended into the new year, gave hope to residents that a long-anticipated rebound in real estate could be around the corner.

"The jump in sales can be credited to the homebuyer tax credit and a stabilizing economy," Warren said in a statement. "It may be too soon to say we're totally out of the woods, but it's definitely a positive trend."

Perhaps most encouraging is that the number of single-family home sales through November has caught up and passed last year's tally in New London County. And the increase in sales statewide for November was the highest month-over-month increase in the past 20 years.

The region trailed only Fairfield County in the rate of home-sale increases in November. The month's home sales tally of 2,702 in Connecticut was the highest since 2005, when the state real estate market was riding high.

And condominium sales, lagging the single-family market locally, have started to show some life, up 46.7 percent in November with prices rising 11.5 percent.

Warren said he expects sales volume statewide to increase over the next few months, partially because last year's economic meltdown means the current market would be hard-pressed to fall much further. But the real question for homeowners is when they can expect prices to begin consistently rising again, and Warren said the best that can be hoped for is that they moderate in the spring and then start to improve gradually over time.

Real estate pros are hoping a new $6,500 tax credit for those looking to trade up or down to a new home will help stimulate the real estate market over the next few months, but Warren said it's hard to say what will happen after the stimulus money expires in July.

"Looking ahead to next year, there is some concern that the … withdrawal of support by the government could lead to problems in the real estate market," Warren said.

l.howard@theday.com