Real estate sales brisk, but prices drop
Real estate in the region is moving at a brisker pace than was seen a year ago, but the typical price of a home isn't seeing a boost.
Third-quarter statistics released this week by the Eastern Connecticut Association of Realtors, which tracks trends in New London and Windham counties, showed single-family home sales rose more than 15 percent compared with the same period last year.
But the median sales price was $200,000 — a $10,000 drop from a year ago. The median price in the region is the midpoint of all sales transactions.
"It's definitely a mixed bag," said John Bolduc, chief executive of the local Realtors association.
Bolduc pointed out, however, that the average price paid for a single-family home in the July-through-September period was up 1.6 percent compared to the same three months a year ago.
"That tells me a broader range of prices are selling," he said. "The higher ends are beginning to sell."
Dragging down the median price, he said, are three factors: jobs, foreclosures and consumer confidence.
Bolduc figures the region will be hard pressed to see major gains in real estate prices until the overhang of foreclosed properties is cleared out, which will take at least a year. Jobs are also at a premium after reductions at many of the region's key companies over the past few years, including the two Indian casinos and Pfizer Inc. Even Electric Boat, which had been a stabilizing force, announced layoffs last month.
These developments have hurt consumer confidence, but Bolduc said he sees renewed interest in homebuying that is showing up in the condominium and multifamily real estate market as well.
"A lot of buyers have now recognized that we're beyond the bottom (of the market)," Bolduc said.
Condominiums have been particularly strong in recent months, with a 23 percent surge in sales during the third quarter compared with a year ago. Prices also rose, from a median of $125,000 seen in the third quarter a year ago to $131,500 for the same three months this year.
Bolduc said he believes the increase is related to more condo associations winning approval for Fannie Mae financing, along with a general loosening of Federal Housing Administration lending requirements.
Multifamily properties also saw a boost in the third quarter, with sales up almost 27 percent. The median price of these multi-unit dwellings were on the rise, from $101,750 to $105,000.
Bolduc said the brisk pace of multifamily sales may relate to an overall improvement in the market and a recognition of some of the great values available.
"We're beginning to see multiple offers on low-priced properties," he said. "Inventory on the low end is fairly low, and that makes it a seller's market. In the high end, it's a buyer's market."
By the numbers
Real Estate Sales in Third Quarter 2013, New London and Windham counties
Single-family home sales: 921, up 15.3 percent
Single-family median price: $200,000 down 4.8 percent
Condominium sales: 112, up 23 percent
Condominium median price: $131,500, up 5.2 percent
Multifamily homes sales: 66, up 26.9 percent
Multifamily median price: $105,000, up 3.2 percent
SOURCE: Eastern Connecticut Association of Realtors
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