Home Sales Keep Falling

Down For 6th Month In Hartford Area

August 17, 2005
By KENNETH R. GOSSELIN, Courant Staff Writer

Single-family home sales in Greater Hartford fell for the sixth straight month in July, a further sign that the area's housing market is cooling a bit from the torrid sales pace of the past four years.

"The market is slowing," said Ronald F. Van Winkle, a West Hartford economist. "It's not necessarily taking a turn for the worse, but it's definitely slowing."

Despite slower sales, there is enough demand - and not an overabundance of homes for sale - to keep pushing sales prices higher, though not at the double-digit pace of the past few years.

Statistics for July from the Greater Hartford Association of Realtors show:

Closed sales of new and existing single-family homes fell 9.2 percent, to 1,151, from 1,267 for the same month in 2004. The decline was the steepest since a 15.1 percent drop in April.

The median sales price rose 6.3 percent, to $255,000, from $239,900 for the same month a year earlier. The increase is more modest than the double-digit increases in price appreciation in recent years.

New listings rose 3.6 percent, to 1,750, from 1,690 a year earlier. Deposits, an indicator of potential future closed sales, increased 2.5 percent, to 1,151, from 1,193 a year earlier.

Jeff Arakelian, the association's chief executive, said the slowdown in sales comes as little surprise because the area's residential real estate market came off an exceptionally robust year in 2004.

Closed sales rose 4.5 percent last year, compared with 2003. For the first seven months of this year, closed sales are down 2.6 percent, compared with the same period in 2004.

"This is something that we've expected for some time," Arakelian said. "The market is slower than it was, but we're still at high levels."

The strong housing market in Greater Hartford, elsewhere in Connecticut and across the country has been driven by mortgage rates that have remained lower far longer than many economists expected.

On Monday, the National Association of Realtors reported that total existing-home sales rose 14.7 percent in the second quarter in Connecticut, compared with the same period last year. In addition to single-family homes, the national association's statistics include condominiums and co-ops.

The numbers reported by the national association also represent an annual rate on a seasonally adjusted basis. The annual rate for a quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters.

The statistics from the Greater Hartford association are not seasonally adjusted.

Although borrowing costs have risen in the past six weeks, the average for a 30-year, fixed-rate home loan still remains below 6 percent.

Most economists expect the housing market in Connecticut to slow as mortgage rates rise, but they do not expect values to fall because construction has been constrained.

The number of single-family homes on the market rose just 2.8 percent in July, to 4,187, from 4,072 a year earlier. That stands in contrast to other markets in the country, such as San Diego and northern Virginia, where the number of homes for sale has risen sharply.

Arakelian said the increase in new listings and deposits shows that there is clearly plenty of interest from buyers and sellers. The average time that it took to sell a single-family home in July rose only slightly, from 37 to 40 days.

That sales pace is still brisk, Arakelian said. A couple of years ago, it took an average of 55 days to sell a home, he said.