Currently on the market for $534,900, this Tudor at 1405 Little Meadow Road in Guilford includes three full and two half bathrooms, two fireplaces and 4,400-plus square feet of living space.

Home sales in Connecticut climbed to a near-record level last year, but industry leaders are not sure whether that type of pace can be maintained with the threat of war with Iraq looming and the economy still wobbling on unsteady ground.

About 54,300 homes were sold last year – including single-family homes and condominiums – close to the record of 54,500 home sales posted about nine years ago, according to the National Association of Realtors. Last year’s home sales were only slightly higher than 2001 sales, when 53,400 homes were sold.

Like other regions in the country, sales prices in Connecticut last year were on the rise. According to a NAR report measuring fourth-quarter prices in 120 metropolitan areas, 39 areas saw double-digit annual increases in median home prices. At least one Connecticut region fell into that category.

In the New Haven/Meriden metropolitan area, the single-family home median price in 2002 – $192,300 – was 14 percent higher than the $168,000 median price of the prior year, according to NAR statistics. New Haven/Meriden’s fourth-quarter median peaked at $202,000, which was 17.5 percent more than the median price posted during the fourth quarter of 2001.

The Hartford metro area experienced a more moderate price increase in 2002 compared to the prior year. The median price for a single-family home in the Hartford area last year was $175,900, a 5 percent increase from the $167,300 median price of 2001, according to NAR.

“I see continued strength in the market in the coming year, but prices are not going to rise as dramatically as they have been,” said Maureen Campbell, vice president of corporate and relocation services for H. Pearce Real Estate Co. in North Haven.

Campbell predicted that the Greater New Haven market will see a more “normal rate” of appreciation of between 5 percent and 12 percent because buyers will be more cautious as a result of world events, including the threat of war.

‘Solid Investment’

Last year, the average sales price for single-family homes sold in Greater New Haven – 28 communities extending from Meriden to Milford – was $290,129, according to a report compiled by H. Pearce Real Estate using statistics from the Cooperative Multiple Listing Service of Hartford.

Some 5,374 single-family homes were sold last year, with the homes staying on the market an average of 41 days. In some communities, homes sold much faster than that. In Middletown, North Haven, Southington, Cheshire, East Haven and Hamden, homes sold in less than 35 days.

The average selling price for condominiums in Greater New Haven was $169,547, and on average it took 36 days to sell listed condos last year. Roughly 2,100 condos were sold in 2002.

According to Campbell, several factors boosted the real estate market in 2002 – including historically low mortgage interest rates, which led to more buyer demand, a low supply of for-sale homes, and the stock market’s poor performance.

“People have been looking at real estate as a more solid investment,” she said.

So far this year, sales managers at H. Pearce Real Estate are reporting that sales activity levels are similar to last year’s despite the harsh winter weather, said Campbell.

“We’re off to a very good start this year,” said Cash Mitchell, who manages H. Pearce’s Guilford office. Mitchell said the sales numbers at his office during the first few weeks of the year closely match what occurred during the same timeframe in 2002.

Residential real estate has continued “perking” despite the hurdles – the cold and snowy weather, terrorism threats, rising unemployment and the shaky stock market – he said.

Those obstacles also didn’t seem to chip away at residential sales in Fairfield County last year. In Fairfield County, sales of single-family homes jumped 10.8 percent last year to 9,168 units sold compared to 8,272 in 2001, according to statistics from the Consolidated Multiple Listing Service. Condo sales, however, slipped 3 percent from 3,209 unit sales in 2001 to 3,108 last year.

The average selling price of single-family homes sold in 2002 increased 12 percent from the prior year to $515,600, while the average selling price for condos went up even more. The average condo price was $216,800, 14.5 percent higher than the $189,400 average of 2001.

“The interest rates are driving our market huge,” said Michael Feldman, president of the Stamford Board of Realtors and a senior sales associate in the Stamford office of William Raveis Real Estate & Home Services.

In Stamford, single-family home sales rose 6.5 percent to 849 units sold, but condo sales fell 5.7 percent from 855 in 2001 to 806 last year. Average selling prices for both single-family residences and condos, however, increased by double-digits. The average selling price for a single-family home in Stamford shot up to $610,000 last year, 11 percent more than in 2001, and the average condo price was $242,300, which is 11.8 percent than the prior year’s $216,700-average price.

The market could start skidding if interest rates start going up, according to real estate experts. Economists for both NAR and the National Association of Home Builders predict that interest rates will start climbing during the latter half of the year if the economy itself begins to pick up.

NAR economist David Lereah has said he expects the 30-year fixed mortgage interest rate to rise gradually from a current low of around 6 percent to 7 percent by the fourth quarter of 2003. The rising interest rates and other factors like unemployment will likely leader to fewer home sales this year compared to prior years, but sales will still be strong, according to NAR leaders.

“People who are saying that they’re waiting for prices to go down, but what happens if they don’t go down and interest rates go up?,” asked Feldman.

In answering his own question, Feldman said that even if the interest rates do edge up, the residential real estate market will survive. At the first sign of interest rates going up, buyers will be rushing to purchase homes before the rates increase further, Feldman predicted.

Although marketing time might increase for homes that are listed for sale, real estate agents agree that a home that is appropriately priced will sell quickly. One early anecdotal clue that this year’s real estate market will not flounder is the attendance at open houses.

According to H. Pearce’s Mitchell, the open houses that his office has conducted have attracted a lot of potential buyers.

“We have every reason to believe that this year will be a very good year,” said Mitchell.