All across the country, home prices are leveling off and sales are dropping as the housing boom comes to its long-touted finale. But in one Connecticut city, affordable home prices mean first-time homebuyers are eager to buy and Realtors are busier than ever.

The number of single-family homes sold in Waterbury last year rose 7.5 percent compared with 2004, a stark contrast to results in the state’s other big cities and in the state as a whole, according to statistics from The Warren Group, parent company of The Commercial Record. And while median prices throughout the state showed about an 11 percent increase, Waterbury’s rose nearly 21 percent between 2004 and 2005.

“The affordability factor has a lot to do with it,” said Cathy Donnelly, the sales manager for William Raveis Real Estate and Home Service’s Southbury office.

A search of www.realtor.com showed single-family homes in the city starting at around $50,000. The city, which has a population of around 107,000, is located on Interstate 84 and Route 8, and trains take workers as far as Manhattan. That amenity has brought more commuters to the city, and with home prices in surrounding areas hovering at twice those in Waterbury, 2005 was a healthy year for the city’s real estate market.

“One of the trends our sales offices are seeing is that people are getting priced out of Fairfield County and [parts of New Haven County],” said Frank D’Ostilio of Coldwell Banker Residential Brokerage.

Fairfield County’s median home price in 2005 surpassed the half-million-dollar mark, standing at $520,000. That was up almost 11 percent from the year before, when it was $470,000. In New Haven County, the median price rose from $210,000 in 2004 to $238,500 in 2005, an almost 14 percent increase. The city of Waterbury’s median price for single family homes rose from $119,900 in 2004 to $144,900 in 2005.

According to industry experts, that helps explain why Waterbury’s sales rose from 1,538 homes in 2004 to 1,653 in 2005, a 7.5 percent increase. Single-family home sales in Hartford decreased slightly from 474 in 2004 to 469 in 2005, a 1 percent decrease. New Haven’s sales increased slightly from 677 in 2004 to 692 in 2005, a 2 percent increase.

Donnelly said she expects to see the lower-priced homes increase in value in the future, while the higher-priced homes in Waterbury and the surrounding area will stay steady.

It is mostly first-time homebuyers and people trading up from condominiums who are fueling the city’s market, according to Donnelly. Because interest rates are still good, even some people who just graduated from college are buying homes in Waterbury, she said.

There is a lot of available assistance for first-time homebuyers. The Connecticut Housing Finance Authority is among the groups that target the area for assistance. Most of the people buying homes in Waterbury are from the area.

‘Things Are Fine’

Donnelly said she expects the good housing market to continue.

“I think we’re going to see it continue to rise,” she said. “I don’t see Waterbury falling down.”

But while the city of Waterbury’s housing market booms, nearby New London County experienced the largest drop in single-family homes last year of all the counties, although appreciation was the highest. The sales of single-family homes fell from 3,747 in 2004 to 3,354, a 10 percent drop. But the median sales price increased more than 15 percent, from $210,000 to $242,000.

The drop in sales may have been due to the announcement that the Naval Submarine Base New London in Groton may close.

“There was a little slowdown at the time things were in question,” said Joan Cerniglia, sales manager at Prudential Connecticut Realty Pequot Properties in Mystic.

But that was just a blip, she said. Since the base came off the list of possible closures, there has been healthy interest in New London County, she said.

“Things are fine in New London County,” Cerniglia said.

There has not yet been a reaction to the announcement of layoffs at Electric Boat Co. in Groton, one of the area’s biggest employers, she said.

Cerniglia expects the number of sales to increase in 2006, along with moderate increases in prices.

“We look forward to a good year,” she said.