The path to recovery in the housing market is far from straight, even in a state as small as Connecticut, as a new report showed Monday.
Statewide, the median sale price of a single-family house rose an encouraging 6.2 percent, the second consecutive monthly year-over-year increase.
But in Fairfield County, the median soared by almost 30 percent. In Tolland County, it didn't even budge. And in Hartford County, it fell by nearly 5 percent.
January is a notoriously light month for sales and that can mean wild swings up and down. But nevertheless, all this is a good sign as the housing market struggles to get its footing, experts said.
"Where recovery and recession meet, you're going to have some data turbulence," said Donald L. Klepper-Smith of DataCore Partners Inc. in New Haven. "It really boils down to there not being one housing market in Connecticut, but 169 housing markets."
The statewide median price of a single-family house — where half the sales are above, half below — rose to $238,900 from $225,000 in January 2009, according to a report Monday by The Warren Group, which tracks real estate trends in New England.
Sales rose 19.5 percent to 1,277, from 1,069, continuing a trend of increasing sales that began gaining momentum last year.
Median prices rose in five of eight counties — with double-digit gains registered in Fairfield and Middlesex counties. The median was flat in New Haven and Tolland counties.
Hartford County had the only price decline, with the median slipping to $200,000 from $209,900 for the same month a year ago.
Ronald F. Van Winkle, an economist and town manager of West Hartford, said that the soaring increase in Fairfield might possibly be attributed to the price declines on the Gold Coast, which were the deepest in the state.
"It may have overshot the bottom," Van Winkle said.
By contrast, Hartford County suffered more modest declines and might still be bumping up and down at the bottom, Van Winkle said.
Whatever the case, Van Winkle and others do not see a "bounce" in prices in the near future, overall. First, they say, there must be strong evidence of a sustained recovery and that will only come when companies start hiring.
"We're not going to see a rebounding housing market," Van Winkle said. "We're going to see a mild recovery."
Real estate agents say there is a sense among buyers that the market has bottomed out.
Also driving sales right now is a sense of urgency. There is concern that interest rates will rise later this year, perhaps in the coming days and weeks. And a federal homebuyer tax credit for first-time buyers and owners who have been in their home for five years will soon expire.
The credit requires that contracts be signed by April 30 and sales closed within 60 days.
Leslie Bajorski, an agent at Re/Max Precision Realty in Newington, said she expects the credit and low rates on home loans to drive sales heading into the spring home-buying season.
"My only concern is what will happen after April 30," Bajorkski said. "I do think we might see a slight dip in the market if they don't extend it."
Fear that a housing recovery could peter out mirrors broader fears about the economic recovery at a time when some federal stimulus programs are winding down.
"The big unknown is whether home sales will continue to increase when the homebuyer tax credit expires and the Federal Reserve stops purchasing mortgage-backed securities," said Timothy M. Warren Jr., chief executive of The Warren Group.
The Fed's purchases of more than $1 trillion in mortgage-backed securities have had the effect of subsidizing the housing market by pouring money into the mortgage system. But the Fed has said it will stop that program after this month.
That could spell a rise in mortgage rates, making it tougher for borrowers to qualify for financing.
In January, Eric S. Rosengren, the chief of the Federal Reserve Bank of Boston, told The Courant that mortgage rates could rise as much as three-quarters of a percentage point in the coming months as a result.
As of last week, rates on 30-year, fixed-rate home loans averaged 5.1 percent in Connecticut, with no points — up slightly but still near the lows of this winter.
Reprinted with permission of the Hartford Courant.
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