Single-family home prices in Connecticut suffered their steepest year-over-year drop in at least 28 years, with the median home price 17.1 percent lower this February compared with February 2008, The Warren Group reported Monday.
The plunge marks the fifth consecutive month that single-family median prices have dropped by double-digit percentages year over year. The Warren Group began tracking residential real estate in Connecticut in 1981.
It also marks the second February in a row in which prices fell — although last year's drop was significantly smaller, 4.4 percent.
Economists say the declines so far in 2009 confirm that Connecticut is in store for a sharp decline in housing prices throughout the year, only standing to get better in 2010 when the economy is expected to rebound. In January, Connecticut had a 17 percent drop in the median single-family house price, the second-largest monthly drop since 1981, as sellers were forced to lower their asking prices to entice buyers worried about keeping their jobs.
"This is not the bottom," said economist Ronald Van Winkle, acting town manager of West Hartford. "We're looking at the true fall now. It is without question a buyer's market."
Unlike the housing downturn in the early 1990s — when prices fell for more than six consecutive years — this recession has sent home prices into a more rapid spiral, he said.
"In this recession, we've had a very fast turn, where the economy just fell off a cliff," Van Winkle said.
Price declines in Hartford County have not been as bad as in Fairfield and some other counties. For example, the statewide median home price for February 2009 is down by 21 percent from February 2007 — nearly the same as the entire drop in 1989-95 for February. Hartford County's median price, by contrast, was down by 13 percent last month, compared with February 2007 — about half the decline that Hartford County had in 1989-95 for the same month.
Economist Don Klepper-Smith of DataCore Partners in New Haven said that the housing market won't gain traction until the labor market picks up, which he predicts will happen in mid-2010.
Tom Abbate, a real estate agent at William Raveis in Middletown, sees a pickup in business.
"I'm negotiating two sales right now on the same day, and I'm not complaining," he said.
Abbate said business has slowed so much in recent months that he's been advising sellers to "price realistically" from the start — with very little "padding." But as soon as the weather began to change, he said, buyers began coming out of the woodwork.
"The buyers are testing," he said, "and I attribute it to the coming of spring."
Reprinted with permission of the Hartford Courant.
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