Home sales across Connecticut in March provided a weak lead-in to the state's spring home buying season with sales and prices both registering year-over-year declines, a new report Wednesday shows.
The median sale price of a single-family house — where half the sales are above, half below — was $243,000, down 1.6%, compared with $247,000 from the same month a year ago, according to the monthly report from The Warren Group. Sales fell nearly 5% in the same period.
Through the first three months of the year, the median sale price slipped about 2% to $235,000 from $240,000 for the same period a year ago, according to Warren, which tracks real estate trends in New England. Sales tumbled more than 7% in the same period.
So far in 2019, the three-month trend for sales and prices paid is disappointing for the state's housing market, which has struggled to recover from the last recession, which ended in March 2010. There were hopeful signs in 2018 when Connecticut registered its third consecutive annual gain in median sale price. The velocity of sales remained a concern, however, not demonstrating strengthening upward momentum.
"This does not bode well for the housing market for the remainder of the year," said Donald Klepper-Smith, chief economist at DataCore Partners Inc. in Durham. "It will be tough sledding."
The news was not better for Hartford County. The county generally has held up better than the state as a whole, but performed worse in March. The median sale price slumped nearly 8%, to $209,000, from $228,000 a year earlier, the deepest year-over-year decline of all of the state's eight counties. Sales fell 10.4% on the same basis.
Interpreting home sale trends early in the year can be tricky because there are often small samples. But Klepper-Smith said the three-month trends for the state are more definitive toward the downside this year.
The report comes as the state is in the midst of the spring home buying season — traditionally the strongest of the year — and an indicator of the direction of sales — and prices buyers are willing to pay — for the year.
Home sale prices, as measured by the median, are still well below the most recent peak of $295,000 in 2007. The state bottomed out at $240,000 in 2012. In 2018, the median price came in at $258,000.
Economists say slow recovery in housing is tied directly to lack of gains in the labor markets. The state has only regained 80 percent of the jobs it lost in the last recession. By contrast, neighboring Massachusetts has recovered four times the jobs it lost, Klepper-Smith said.
The economic development and job creation policies pursued by the state will have a direct and lasting effect on the housing market — and everyone who owns a home, Klepper-Smith said.
Klepper-Smith said state legislators in Connecticut must be wary about passing laws such as a $15 minimum wage or paid family medical leave that will add to the cost of doing business. In turn, higher costs, he said, could constrain job growth, which bears heavily on the state's home sale market.
Across the state's eight counties, sales fell in all but New Haven County. The median sale price fell in just three counties — Fairfield, Hartford and Litchfield — but it was steep enough to pull down the overall state median.
Timothy Warren, chief executive of The Warren Group, said other factors may be at play, including the slow price recovery in the last decade, possibly making would-be buyers more cautious.
"I think the last crash in the real estate market changed the attitude about homes being the ticket to financial success," Warren said. "It has not been a great investment over the last 10 years certainly."
Warren said younger generations of workers are less willing to be tied to a home purchase, recognizing they may need to move to another city or state to get a better-paying job.
Real estate agents say homes are selling but those that get the most attention are the ones with the latest updates and in the best locations.
The median sale price is a well-watched indicator of changes in sale prices and trends affecting property values. But it doesn't necessarily mean all home prices and values, for that matter, are moving in the same direction.
