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Hartford Leads Area in Growth of Home Prices
But Higher Prices Limit Choices of Those with Lower Incomes

by Mike Swift

Home purchases by immigrants. Demolition of the city's worst public housing. Educational and financial programs that expanded the pool of homebuyers. Slow but visible progress on a massive state-financed downtown building program.

And, perhaps most of all, rock-bottom housing prices that persisted well into the economic boom of the 1990s.

Those factors have combined to give Hartford a surprising regional distinction: The city had the largest growth in housing prices by percentage in Greater Hartford over the past five years.

A new survey by the Capitol Region Council of Governments found that the median housing price in Hartford jumped by 76.5 percent between 1999 and 2004, the largest increase by percentage in the 29-town region. The next largest percentage gains were in Suffield, Marlborough and West Hartford, which recorded growth of 73 percent, 69.7 percent and 64.1 percent, respectively.

At a median sale price of $148,300 in 2004, Hartford's median housing price in 2004 is not reminding anyone of Beacon Hill in Boston or the Upper East Side of Manhattan. The Hartford median is less than half that of the priciest town, Avon, at $361,665. But Hartford's housing values match a surge in values in other Connecticut cities, notably in New Haven and Bridgeport.

For the first time since 1997, Hartford does not have the lowest median housing price in metro Hartford. That distinction now belongs to East Hartford, where the median sale price of a home was $145,000.

As recently as 1999, the median sale price of a home in Hartford was $84,000.

“I remember we couldn't give stuff away in the Linden [a downtown Hartford condominium building], and now, just try to buy something there,” said Curtiss Clemens Sr., president of Century 21 Clemens & Sons Realty Inc. “The prices had dropped so dramatically in the city that when this resurgence came up, they went up a lot more quickly.”

While the substantial jump in housing prices many towns recorded during the first years of this decade were good news for those who own a home, higher prices are becoming a barrier to homeownership for many people, the CRCOG study said.

Higher housing prices are “really limiting the choice for individuals of low and moderate incomes,” said Mary Ellen Kowalewski, director of community development for the council of governments.

Three years ago, 40 percent of the region's homes sold at prices affordable to “moderate income” households -- those earning 80 percent of the region's median income. The current median income is $48,024. In 2004, just 23 percent of homes sold for $141,000 or less, prices affordable to people at that moderate income threshold.

The share of homes affordable to “low-income” people, households with incomes less than half the regional median, slipped to 8.4 percent in 2004 from 15 percent in 2001. The largest number of sales in the Capitol Region, the CRCOG survey found, were between $300,000 and $500,000 -- well above the range considered “affordable.”

Affordable housing also is becoming more concentrated in fewer communities. Nearly half the homes defined as affordable to low- and moderate-income people in 2004 were in Hartford and four towns east of the river: East Hartford, Manchester, Enfield and Vernon.

But three other towns east of the river -- Bolton, Marlborough and Somers -- had fewer than 10 affordable sales each in the past year.

In Hartford, stronger housing prices are a boon to developers such as John Reveruzzi, who hopes to convert the historic Capewell Horse Nail Co. factory into condominiums selling for $100,000 to $185,000.

“People are anticipating that there is going to be life in the city of Hartford. That's really what all this reflects,” said Reveruzzi.

Reveruzzi said he has about 10 reservations for Capewell units, including one from a University of Connecticut football fan who lives out of state and wanted a place to stay for games at Rentschler Field.

“Those are the extremes that you've never had,” the developer said.

The CRCOG study was based on the 12,798 home sales recorded by municipal assessors in the 29-town Capitol Region between July 1, 2003, and June 30, 2004, a one-year record for number of sales.

In Hartford, prices for condominiums, single-family, two-family and three-family homes all jumped by more than 50 percent between 1998 and 2004.

Real estate agents familiar with the Hartford market say there are many reasons why the city's housing prices have climbed out of the cellar. Low interest rates, down payment assistance programs, housing educational programs and other efforts by government and nonprofit groups have enabled more people to become homeowners.

Many Latinos and members of immigrant groups such as Bosnians have moved into the city's home-buying market, Clemens said. Blue Hills, the West End and Forster Heights in southwest Hartford are among the areas that have seen strong growth in prices. A shortage of supply in downtown condominiums and single-family homes across the city has helped to drive up prices.

The development of new regional magnet schools may be encouraging some middle-class parents who did not consider Hartford before because of the public schools, said John Guszkowski, author of the CRCOG report.

Whatever the cause, Kim Nichols, owner of MB Merski Real Estate, said there are slim pickings for owner-occupied housing in downtown Hartford. Two of the largest downtown owner-occupied housing complexes, Bushnell Tower and Bushnell On The Park, have only one unit for sale each, Nichols said.

“Condos are hot. We don't have many downtown, and we're desperate for them,” said Susie Hatch, a broker with Coldwell Banker who specializes in the downtown market.

“Adriaen's Landing -- no, we don't have the developer for Front Street,” Hatch said. “But the convention center is in and is going to be ready to go, and the hotel is going to be ready to go. The Civic Center is under construction and on its way to happening. You've got a lot going on, and I think people are feeling positive about the economy in general.”

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
| Last update: September 25, 2012 |
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