Connecticut topped the Northeast in existing-home sales in the second quarter of this year, and area real estate agents believe that success will continue. This four-bedroom Colonial at 60 Silo Hill Road in Madison, which was built in 1994, is currently being offered for sale at $849,000.

Connecticut led the Northeast in existing-home sales during this year’s second quarter and local real estate agents are not only happy with the results, they expect the trend to continue. At the same time, home prices increased during the second quarter, especially in the Northeast.

Existing-home sales in Connecticut rose 23.3 percent from the second quarter of 2003, according to statistics from the National Association of Realtors, which showed that the increase for the Northeast as a whole was 12.6 percent.

“Everything is good,” said Sandy Gervais, broker-owner of Re/Max Advantage in Avon. “We love it.”

Gervais’ firm saw 813 closed transactions for single-family homes during the second quarter, she said. The firm serves the Farmington Valley area, which has been particularly popular with families because of those towns’ strong school systems.

“That is pretty substantial,” she said.

Any home or condo priced right is being snapped up right away, Gervais said.

“They get sucked up,” she said. “We’re shocked.”

Barbara Pearce, president of North Haven-based H. Pearce Real Estate Co., also has noticed the high numbers, even since the second quarter ended in June.

“July was a tremendous closing month,” she said.

Realtors in New Haven are doing particularly well, she said. Sales in H. Pearce’s New Haven office are up 50 percent from last year, she said.

“And last year was incredible,” Pearce said. “New Haven is the strongest part of the market.”

The activity is likely an extension of the rapid buying and selling that has been going on for the last couple of years, Pearce said. Interest rates have a lot to do with it and, in Greater New Haven, sales jumped in large part because listings increased and people who had been shopping were able to find a house.

“I think it’s still the tail end of this surge that took place a couple of years ago,” she said. “I also think you’re seeing a push from interest rates.”

‘A Higher Plateau’
The national average commitment rate for a 30-year fixed mortgage was 6.13 percent in the second quarter, up from 5.60 percent in the first quarter, according to NAR. The rate was 5.51 percent in the second quarter of 2003.

“Mortgage interest rates have come back down to the 6 percent range over the last few weeks,” said NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, Calif. “Although mortgage rates will trend gradually upward, they will remain historically low. What won’t change is the demographic demand from more people entering the years in which they typically buy a first home, which is freeing existing owners to make another purchase and keep home sales at a higher plateau than we saw in the beginning of this decade.”

Interest rates, although they have lately been fluctuating, are still favorable, according to Pearce. Homebuyers today often are looking more at the cost of ownership than at the price of a home, Pearce said. If interest rates are low enough, price doesn’t matter as much, she said.

But prices are increasing.

Most of the homes Gervais’ firm sold in the second quarter were in the $300,000 to $500,000 range, but 17 of those sales were transactions between $1 million and $4 million.

The median resale price in the Northeast during the second quarter rose 17.6 percent from the second quarter in 2003, according to NAR statistics. The New Haven/Meriden area in Connecticut saw some of the strongest increases for the quarter. The median resale price went up 15.6 percent to $246,800, the statistics show.

Nationally, 49 metropolitan areas experienced double-digit price gains – the most ever, according to NAR.

“A tight supply of available homes in a record sales market has been favoring sellers,” said David Lereah, NAR’s chief economist, in a prepared statement. “Even so, the low level of mortgage interest rates and loan origination costs are providing the headroom necessary for buyers to handle higher prices in most areas.”

As a region, the Northeast saw the strongest increase in median resale price during the second quarter. The strongest increase in the nation was in Las Vegas, where the median price reached $269,000, up 52.4 percent from the second quarter of 2003, according to NAR.

“That is the biggest annual home price increase in any metro area on record,” Lereah said. “A close examination of the data shows why – Las Vegas only had a 1.7-month supply of homes on the market in the second quarter, compared with a 4.2-month supply for the nation as a whole. By contrast, a housing supply in the range of six months represents a fairly even balance between homebuyers and sellers.”

After Las Vegas came Anaheim-Santa Ana at $655,300, up 38.7 percent. The national median existing-home price was $183,800 during the second quarter, up 9.1 percent from the second quarter of 2003.

Although all the numbers were favorable for Connecticut in the second quarter, Pearce doesn’t expect this year’s overall numbers to beat last year’s. Prices will start to rise at a slower rate and available units won’t increase, she said.

“It’s easing off,” she said. “I think we’ll have a soft landing from a heated market.”

But Gervais expects the market to stay strong. She recently went to the Canadian city of Quebec for an international conference for real estate agents, where she heard predictions that the market would stay strong until 2010, she said. The improving job market also should assure the real estate market stays healthy, Gervais added.

“We see the job market strong,” she said.