With spring weather just around the corner, Connecticut homebuyers are looking to purchase newly constructed houses such as this home at 25 Garnet Hill in Avon that recently sold for $1.2 million. Industry insiders say the new-construction market was booming during the first quarter of 2003.

Although the Connecticut Department of Economic and Community Development reported last week that the number of housing permits was down for the month of February, local Realtors say the new-construction market has taken a recent upswing and things are vastly improving.

“We had a good 2002 first quarter, and we’re having an outstanding 2003. The weather wasn’t that cooperative, but our revenues are up 200 percent,” said John Tarducci, senior vice president of the New Homes Division at Shelton-based William Raveis Real Estate & Home Services. “We’re actually looking forward to a very good year. All things considered, if we don’t get too many hiccups we’re looking at a great year with these low interest rates. Our inventory is already moving at good levels.

“People who buy new construction are really fulfilling a dream.”

Tarducci explained that when looking at comparative prices, the resale marketplace isn’t very strong with inventory. Therefore, when prospective homebuyers look at the resale inventory and find that it’s within a decent percentage to go with new construction, then that’s where they tend to gravitate.

“People are finding that it’s worth it to go with the new construction, and they can say to friends and family, ‘Look, I made it.’ It’s really the dream of lifestyle,” said Tarducci.

He chalked up the “hiccup in February” to the bad weather conditions, noting that when the temperatures rise higher than 40 degrees people start to buy houses again.

Tarducci said that in Fairfield and New Haven counties, there was a period of time in the first quarter when there weren’t a lot of new zoning applications.

“What I see is the pricing structure of land sellers. The cost of land helps determine the end cost, so when land is becoming scarce, the price starts increasing to aggressive levels and tends to push your end product up,” said Tarducci. In his area, he added, the time that it takes to pass a subdivision approval is tending to get a little longer, with all of the current regulatory processes and appeals. Tarducci said that’s one factor that might have contributed to a lack of permits earlier this year, simply because land wasn’t permissible to build on.

“Things like that are always a challenge, but that’s real estate,” he said.

Tarducci is predicting a good market for the rest of the year.

“We have new-construction sites that are open from one day a week up to seven days a week, and the units of traffic have spiked and stayed at high levels since early February. It went up and down a little bit because of snowy Sundays, but we’ve had lots of visitors come through our sites,” he said. “I think it’s a combination of low interest rates and cabin fever. Spring is traditionally time to make buying decisions.”

‘Great Guns’

Nick Cifaldi, a sales associate with Prudential Connecticut Realty’s Farmington office, works primarily in the Farmington Valley of Hartford County, and reports that roughly 30 percent of his sales comes from new construction.

He said the new housing market in his area never really slowed down in the first quarter and has been very strong during the opening months of 2003.

“The market has been terrific and continues to be terrific. I’ve heard that new-construction sales were down in the first quarter, but not in Farmington Valley, they weren’t,” said Cifaldi. “It’s been really great guns.”

In his particular area, newly constructed houses selling for $1 million or more have been moving in greater numbers in the last two months than in the previous six months combined.

Prior to the first quarter there were no high-end sales for several months, said Cifaldi. However, he recently sold several houses in the $1.2 million to $1.5 million range in Avon and Devonwood.

“If you go down in price a little bit, the [houses listed at $900,000] are kind of slower, but I’m still selling a lot of stuff in the [$700,000 range]. That range is really very active,” said Cifaldi.

He did report that construction has slowed somewhat during the winter months.

“I was just speaking with a builder who closed on a lot in November but only started on the house two weeks ago. As soon as he started construction, we sold it,” said Cifaldi. He noted that “to-be-built” houses were affected by the weather, but said the houses that had been started have all either sold or are about to close.

As far as land in his area is concerned, Farmington and Simsbury are running dry on buildable lots, but Avon still has plenty of space on which to build.

“Avon has a large a number of big subdivisions where they sell lots, and that is definitely not true for Farmington and Simsbury.” said Cifaldi. “Avon represents the biggest number of housing lots in the area by a long shot, and they’re selling pretty quickly.”

Surrounding towns, such as Bridgewater, are also reportedly selling quite a number of lots for new houses.

“Some of the other towns have quite a bit of land, but it’s like hens’ teeth in Farmington and Simsbury,” said Cifaldi. He added, however, that the scarcity of land in those two towns hasn’t had a dramatic effect on the end price.

“Probably if you looked at the per-square-foot value you might get a few more dollars in Farmington or Simsbury, but the price would increase dramatically. The whole valley is almost looked at as one big market now,” said Cifaldi.

Whatever small dip was noticed in the Farmington Valley, Cifaldi attributes it to a lack of homes that were under construction.

“It was more a lack of spec inventory because of the weather, and once we got to November construction was pretty much over. That probably contributed to what might have been fewer sales,” said Cifaldi.

Now, as the weather turns around, work is getting started, foundations are being poured and homes are being framed.

“It was more a function of getting houses started than a lack of demand. In the past few weeks, more things are started and more houses are out there to buy,” said Cifaldi. “Spring is the best market, but it’s not the dramatic spikes and valleys that it used to be. I’ve been in the business for 20 years, and the spring market [previously] showed a dramatic spike in sales.”

While there are still seasonal ups and downs in the Connecticut housing market, the relocation buyers make up a large portion of it, and “they move when the company tells them to move,” said Cifaldi. “The spring is maybe enhanced because the local buyers are coming out to buy, too.”

Marilyn Sexton, a Realtor with H. Pearce said, “The winter was so horrendous, just absolutely horrendous and I think that was a major drawback. The phones weren’t ringing and people didn’t want to leave their house.”

Now entering the spring market, which she reports is her strongest, the sale of new construction has turned about.

Sexton covers the area of shoreline east of New Haven. As far as land in her area of Connecticut is concerned, there isn’t much left to go around.

“There’s not much land at all,” she said. “There’s still a few pockets of land that they’re finding and building on, but it really depends on the town.”