Realtors across the state expect 2005 to rival 2004 despite interest rates that may go up as the year wears on.

“Everyone is looking for the balloon, but I don’t think you’ll see a burst,” said Geri Guzinski, a Realtor with William Raveis Real Estate & Home Services in Stamford and the incoming president of the Stamford Board of Realtors.

Barring any major event such as a stock market crash or a terrorist attack, sales will likely level off over the next year, Guzinski said.

Barbara Pearce, president and chief executive officer of H. Pearce Real Estate Co. in North Haven, agreed.

“I expect prices to level off and units to stay where they are [in 2005],” she said.

The coming year will still be a good one for Realtors and the market will stay strong, but will be a bit softer than 2004’s, according to Pearce. But that is probably healthy as the market retreats to growing at a sustainable rate, she said.

“It’ll still be good, but it won’t be sizzling,” Pearce said.

The past year has been a healthy one for Realtors, she said. The second half of the year was slightly slower in terms of sales than the first half, according to Pearce, who added that prices remain high.

Fairfield County Realtors are looking forward to the coming year, according to Bitsy Govern, a Realtor at William Pitt Real Estate’s Fairfield office.

“Everybody seems quite excited about 2005,” she said.

Interest rates, although they have risen over the last several months, are still historically low and the housing market in Fairfield County continues to be strong, according to Govern. The Federal Reserve likely will not raise interest rates again until June, Govern said, so Realtors are looking forward to the spring season, which is historically a busy one for homebuyers and sellers.

The low interest rates have spurred activity for both first-time homebuyers and for homebuyers who want to move into bigger homes.

“People still have so much borrowing power that they can keep moving up,” she said.

But although Realtors are not too worried about the slowly rising interest rates, they likely will push up occupancy rates in rental units, according to Steve Witten, a commercial broker with New Haven-based Marcus & Millichap. Property owners in Fairfield County – especially in Stamford – and in suburban New Haven and Hartford counties and Hamden County have over the last few years been offering concessions, such as one month’s free rent, to attract renters. But the rise in interest rates will mean fewer people will purchase their first home and more will be renting, according to Witten, so concessions will completely disappear.

Witten expects between 3 percent and 5 percent in rental growth and for occupancy to return to more normal levels of 95 percent to 96 percent. Some areas of the state have seen occupancy rates as low as the high 80s over the last few years, he said.

“We’re starting to see that turn back to normal,” Witten said.

Realtors have noticed some other trends that likely will be prevalent in the new year.

Condominiums in Stamford have been popular lately, both with first-time homebuyers and with older people who want to downsize, Guzinski said.

Also, many Fairfield County residents are renovating their homes, according to Govern.

“People are spending a lot of money on renovations,” she said.

Govern said she has seen many people put in gourmet kitchens, master suites and sauna showers. Some also are putting expensive appliances like cappuccino machines or refrigerators in bedrooms or bathrooms, she noted. People are refinancing to pay for such expenditures, or depending on large yearly bonuses to invest in new, high-end appliances for their homes, she said, adding that she expects the trend to continue into 2005.