Home Prices Rise as Sales Hold Firm in 2010

WALLINGFORD, Conn., Jan. 24, 2011 /PRNewswire/ -- The Connecticut real estate market ended the year positioned for growth, leaving little doubt we are headed in the right direction.  While many states still feel the grip of the downturn, there are signs Connecticut may have reached an inflection point.

Connecticut saw an increase in median price in single-family homes of 4% in 2010, according to area multiple listing services.  Fairfield, Hartford, Litchfield and New Haven Counties each gained, showing evidence of our market stabilizing.  In addition, Condominium prices rose in Hartford, Tolland, Fairfield and New London Counties.  Connecticut also saw gains in homes sold, with the largest increase of 15% in Fairfield County. Litchfield and New London also saw sales growth.

Back in 2009, the biggest change in the market was the drop in the number of months it took to sell single-family inventory.  The numbers were 50% better than the highs of 2008.  This year we find the number of months to sell single-family inventory is up 10% from 8 to 8.8 months.  This is a slight increase but is one way to acknowledge that 2010 was still doing a good job of reducing inventories. By comparison, condominium inventory supply times dropped 1% from 10 months to 9.9 months.  This is welcoming news.

A good indication of future improvement is housing permit activity.  We are ending the year up 19% to a projected 3,900 +/- permits issued across the State. And, the New England Economic Partnership, a non-profit economic forecasting group, projects permits to be around 4,500 in 2011.  That's good news for builders and the overall economy.  Most people understand the positive ripple effect that new home construction has on local retail and service sectors like home furnishings, landscaping, etc.

According to the State's department of labor, Connecticut's unemployment rate came down slightly in November from October to 9.0%.  But, it is still .3% over November of a year ago.  Like the Nation as a whole, Connecticut faces some interesting times ahead when it comes to employment, new business starts and budget deficits.  So, it remains to be seen how our new Governor and legislature handles their first year of managing it all.  Fortunately, the New England Economic Partnership also predicts personal income to rise 2.5% in 2011, which should help bring consumer confidence to levels known to spur spending in all sectors of the economy.

The year 2010 brought us stability and a measure of confidence.  Moving forward, there will be conditions that are less than ideal, but as the factual data here shows, there is significant opportunity for growth.

Prudential Connecticut Realty is the largest, full service real estate firm in Connecticut and the 19th largest in the United States. For more information, visit www.prudentialCT.com.

SOURCE Prudential Connecticut Realty