The housing market in Connecticut is making a selective recovery from the nation’s housing crisis, a reflection of the economy at large. Job growth in the state, and not just pent-up demand, may be a contributing factor; the Bureau of Labor Statistics reported that Connecticut was one of only nine that added enough jobs in April to be “statistically significant.”

Drawing from data in The Warren Group’s Real Estate Records Search, we looked at differences in year-to-date sales from January to May in 2005, 2010 and 2013 (May was the most recent month for which information was available). The figures are selective; they represent the median sale price of single-family homes and condominiums. The year 2005 is judged to have been the height of the growth in home prices, and 2010, the trough, in which prices reached their low. So far, we have been hearing that 2013 is signaling a market rebound.

Since all things are relative – most notably, economic recoveries – our chart takes two different figures into account – the percent change in median price from 2005 to 2010, the peak to the trough – and the wider recovery period of 2005 to 2013.

We chose five communities in which property values are generally at the high end of the scale, and compared them to three cities and the state’s two casino towns. This selection does not take into account the suburbs of the city markets or contiguous towns.

What we found was a striking difference in the peaks and valleys between the higher-end towns and the more economically diverse cities and towns. The higher-end towns were far less affected by market fluctuations than the other cities and towns, which experienced steep decreases in median sale price from 2005 to 2010. Three of those cities and towns have posted modest gains over the trough of 2010, while others have a long way to go.

Best Time To Buy

The statement, “It’s a great time to buy” might be dismissed as something Realtors say all the time, but they happen to be right – it’s a great time to buy for those in a sound position to do so. Interest rates, while not at their historic lows, are still down. And unlike prior cycles – when sale prices rose in proportion to falling interest rates, quickly eating up the advantage – values have stabilized, and are now at realistic levels.

John Bolduc of the Eastern Connecticut Association of Realtors notes healthy job growth in private-sector powerhouses suchas Electric Boat in Groton, and Pfizer, though the casinos have trimmed jobs.

The engagement of appraisal management companies, instituted in 2010, was designed to cut down on inflated appraisals by engaging appraisers with no local ties. But with lack of local ties comes lack of market knowledge. Realtor Michael Barbaro of Huntsman and Meade said there’s an art to appraisal that isn’t often found in the numbers – or even in description of properties. “Values can change from one street to the next,” he noted, with high-end houses cheek-by-jowl with homes whose value is dictated mostly by the land they’re on.

On the other side, good value is as good value does. Barbaro notes that properties with consistently high value, as opposed to average properties that have been overvalued and overbid, are less impacted by market downturns. “Even in depressed times, we had bidding wars [on good homes],” he remarked.

Foreclosures are still cycling through the system, and still pose a multi-level difficulty that has nothing to do with Connecticut being a judicial state, Barbaro said, and everything to do with the difficulty of determining who holds title to the property, as well as the reluctance of banks to hold onto foreclosed properties any longer than they have to. Fortunately, continued improvement in the local economy, as well as proposals by the Connecticut Association of Realtors (with the working title “Foreclosure by Market Sale”) that would improve the ability of owner-occupants to better compete with cash-paying investors who do not intend to live in the property, hold out possibilities of bringing the market back to a state of more consistent long-term health.

Email: coneill@thewarrengroup.com