Home sales were generally steady for Connecticut’s rural communities during the first quarter of 2006. This four-bedroom home in Lakeville sold for nearly $1.8 million in January.
Mostly steady sales characterized the more rural parts of Connecticut in the first quarter of this year, and Realtors expect only some softening of the market over the next year. That could, however, lead to an unexpected boon for the industry’s veterans, as some part-timers and others leave the business.
Litchfield County’s sales went down about 5 percent in the first quarter, even as prices continued to rise steadily, according to statistics from The Warren Group, the parent company of The Commercial Record. In the first quarter of this year, 475 single-family homes were sold, compared to 502 sales in the first quarter of last year. Meanwhile, the median price rose more than 10 percent, from $230,000 last year to $254,000 in the first quarter of this year.
The steady market in Litchfield County can be attributed to its connection with New York, according to Elyse Harney of Elyse Harney Real Estate in Salisbury.
“Ours is a New York market,” she said.
Most of the sales in the area are generated by people buying weekend getaway homes. Since incomes and bonuses in New York City have remained solid for the last couple of years, the residential real estate market has reflected that trend, Harney said.
“This has always been a weekend area,” she noted.
There is also a limited inventory of second homes in the area, a trend which has driven the price up at a faster rate than the statewide median.
Litchfield County’s market has been steady for years, Harney said. The events of Sept. 11, 2001, were a factor in the area’s popularity, as they spurred on New Yorkers’ desire to have a place outside of the city. Before 9/11, rentals were common. But since then, people who can afford to buy have been doing so.
The abundance of protected land, which does not allow for much new construction, also has been a factor in the price increase. Land has been rising in value so quickly that protected land actually has increased to almost the same value as non-protected land, according to Harney. That is a new trend that illustrates the value of land.
Harney said she does not expect the market in Litchfield County to see many changes over the next year.
“I think the market’s going to hold,” she predicted.
Harney added that does not expect a downturn like the one in 1987, which lasted for 10 years. There will be adjustments, but the factors that drive the market – which include incomes in New York City – have not changed, she said.
‘A Real Market’
The picture is similarly sunny in Tolland County, where sales dropped less than 5 percent from the first quarter of last year to the first quarter of this year, and where the median price rose by almost 11 percent. During the first quarter of last year, 284 single-family homes were sold, compared to 270 during the first quarter of 2006. Prices rose from $215,000 last year to $238,150 this year.
According to Pat Ferrigno of Ferrigno Realtors in Storrs, Tolland County’s market – which is often lumped together with Windham County’s – has not gone through any significant changes. Call ratios at his company remain good, he noted, and the company is busy.
Ferrigno Realtors has been in business through two significant downturns in the market, Ferrigno said, and has fared well both times. When a market goes through a downturn, many Realtors leave the business, he said. His company, however, does more advertising and sticks it out.
“My experience when the market declines is that a lot of people give up,” he said.
The declining sales force is beneficial to those who stay in the industry, according to Ferrigno. However, he said he does not anticipate a significant change in the economy, mostly because of the area’s proximity to the University of Connecticut, which is in the process of major development.
The numbers in Windham County, however, are less favorable. Sales dropped 24 percent from the first quarter of 2005 to the first quarter of this year. Last year, 311 homes were sold during the first quarter, compared with 236 this year. The median price for single-family homes rose by almost 7 percent, from $190,000 last year to $202,500 in 2006.
“We’re back to a real market,” said Dick Loomis, broker-owner of Loomis Real Estate in Putnam. “We were order takers for a few years.”
The market was fueled for years by an influx of people coming over the border from Massachusetts. Because homes became so expensive there, people were willing to commute from Windham County. That trend has begun to dry up and prices are now leveling, Loomis said.
Most people buying in the area now are first-time homebuyers, many of whom are buying condominiums. The numbers for condos are not much more favorable, however. The number of sales dropped 40 percent, from 43 in the first quarter of last year to 26 in the first quarter of 2006. Price also dropped by about 11 percent, from $155,000 last year to $137,450 this year.
Loomis said he also expects to see some Realtors leave the business. A number of people got into the industry when the boom began, and this is the first time they are seeing a “real” market, he said.
But that will be good for people who have been in the industry for years, according to Loomis, who said those professionals know how to market their companies and work in a more balanced market.
