Bypass plans may have hit Old Lyme home sales
It was a good year for real estate in the northern part of New London County, but 2016 won't be remembered so fondly along the shoreline, particularly in Old Lyme, where sales fell dramatically.
The most recent town-by-town real estate statistics released this week by The Warren Group, publisher of The Commercial Record, revealed the disparity in sales numbers and prices for single-family homes, with places like Bozrah, Franklin and Norwich seeing substantial rises between 2015 and 2016.
But Old Lyme, Lyme and Griswold didn't fare as well, each seeing double-digit declines in median prices.
In Old Lyme, the decline of more than 31 percent in sales and 13 percent in median prices was a concern for Bonnie Reemsnyder, the town's first selectman, who questioned whether plans for a high-speed rail bypass through town could have played a role.
"It's very disturbing," she said. "We've already suffered economic harm here."
Reemsnyder said she received an email last March from a potential homebuyer along Ferry Road who decided against the investment after hearing about the bypass, which is slated to cut somewhere near the center of town. She added that the village area of town near Main Street particularly has been hard hit by a slump in sales activity.
"It's certainly something we're going to reference," she said of the home-sale slump, as the town continues efforts to stop current bypass plans.
Mary Poola, a principal of Heritage Properties and a member of the board of the Eastern Connecticut Association of Realtors, said she was unsure whether the bypass played a role in the Old Lyme real estate slump last year. She pointed out that much of the shoreline had a less than stellar year, with the median price of single-family homes down in Waterford, East Lyme and Groton, and sales off in Stonington and New London.
Poola said the region slowly has been converting from a white-collar economy when Pfizer Inc. was at its height to one dominated by workers making lower wages. Homes are more affordable on the northern fringes of New London County, she said, and that has been where the action is.
"There's been a remolding of the market somewhat," Poola said. "High-end suburbia took a big gut punch."
Meanwhile, Bozrah saw a 39 percent increase in the median price of a single-family home last year, and Franklin and Norwich were both up more than 20 percent. Poola said Norwich had been hit so hard over the years that it was due for a comeback.
"They're now starting to see some improvement because the values had stooped so low," she said.
But Carol Christiansen of RE/MAX Realty Group in Ledyard pointed out that sales are still an issue in Norwich, especially in the higher price ranges, because of the high tax rate. She said she had sold one home in Norwich last year for under $150,000, and the taxes were $9,000 a year; another went for $22,000, but the taxes were over $5,000 annually.
"Things under $250,000 are moving really quick," she said. "It's really busy out there."
Lyme, a rural town north of Old Lyme that sports the highest median price homes in eastern Connecticut, saw a 115 percent increase in sales, but prices were off 18.5 percent last year compared with 2015. Susy Hurlbert, chief executive of the local Realtors association covering New London and Windham counties, said declining prices in Lyme have been ongoing, with a median of $715,000 three years ago, $484,000 two years ago and $437,000 last year.
"It's clearly an adjustment or a market correction," she said.
She said towns like Lyme and Old Lyme have had to adjust to a smaller pool of buyers as the market has shifted to a younger crowd. Even the new Electric Boat engineers and designers being hired are not able to afford many of the homes in the Lymes, she said, if they are making an average of $60,000 a year as a starting salary.
"Higher-end homes are not doing so well," Hurlbert said.
Overall, though, the real estate market in eastern Connecticut turned in its best year since 2007, she said. And though New London County was not as hot a market as Windham County, it still saw an 8.3 percent rise in single-family home sales and a nearly 2 percent rise in the median price.
"Everything is moving in a positive direction," said Sue Barnhouser, a former president of the local Realtors association and agent for RE/MAX Home Team in Waterford.
The only issue is a shortage of inventory. Christiansen said the supply of houses on the market in Ledyard is currently 73, while it had been double that a year ago.
Barnhouser added that while there was a 14-month supply of houses a year ago, that has been cut to only nine months today. The result is that the average number of days on the market for a single-family home has dropped dramatically, to only 82 days.
"There's not a lot of houses on the market," Barnhouser said, "and there are a lot of buyers out there."
Agents say January and February are normally slow months for home sales, but the good weather lately combined with concerns about higher interest rates ahead have spurred more activity among buyers.
And agents say new EB hires are not a big part of the buying activity. Most have been looking at rentals, Barnhouser said, and likely won't be in a position to buy a house for another year or two.
"(The year) 2016 was a great year," Barnhouser said. "It was a very balanced market, which is what you want."
Southeast Connecticut real estate 2015-2016
Data source: The Warren Group
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