Record-low interest rates and higher consumer confidence are kick-starting the New London County real estate market out of its four-year doldrums.
Quarterly numbers collected by the Eastern Connecticut Association of Realtors show a 16.3 percent surge in single-family home sales in the July-through-September period in New London County compared with the same three months last year. And prices in the region rose from a median of $219,750 in last year's third quarter to $233,500 this year.
"It's been a great year," said Marilyn Lusher of the RE/MAX Home Team in Waterford. "This is going to be the biggest year I've had in real estate."
Lusher said mortgage rates averaging about 3.5 percent have brought out buyers who are finding motivated sellers and a nice selection of homes. Move-up buyers, who had been in scarce supply recently, have started to become active again, said Lusher, who just sold a home to a young couple who had been her clients three years earlier and now can afford a $100,000 step up.
"People have been holding back for so long - several years," said John Bolduc, chief executive of the local Realtors association. "Demand hasn't gone away; it's just been postponed."
Bolduc pointed out that home sales have now increased for three straight quarters. He added that association members report having one of the busiest summers ever, which should be reflected in strong fourth-quarter sales figures.
"It would be even more robust if the job market were better," Bolduc said.
September single-family home sales reported by Sound Investment Consultants, a Stonington-based consulting firm run by Les Bray, held basically steady compared with a year ago. But Bray pointed out that every month so far this year has recorded higher sales volumes than in the same period a year ago, a reflection of the higher number of transactions and increased prices.
"Considering the exceptionally low interest rates and the sustained positive market growth, there now is cause for greater consumer confidence in the New London County single-family market," Bray said.
Movement of homes is particularly strong in the $100,000 to $199,000 range, while sales volume is increasing fastest in the $200,000 to $299,000 range, Bray's numbers show.
And that's good news for eastern Connecticut, which had to withstand the bleakest of downturns over the past several years as median prices on single-family homes fell nearly 30 percent and condominium prices collapsed even more. Last year, median prices on single-family homes in the combined market of New London and Windham counties dipped below $200,000 for the first time in nearly a decade.
Randall Realtors, which also offers a quarterly report on New London County real estate, said positive momentum in the market appears to be continuing into the fall, with 291 homes in the region under contract as of Oct. 1, compared with 279 a month earlier.
"We are experiencing a slow, steady recovery," said Doug Randall, chief executive of Randall Realtors. "In the long run, modest increases are much healthier for our housing market than dramatic spikes as occurred prior to the recession."
Still, Bray reported that inventory levels of unsold homes remain high, at approximately a 12-month supply, meaning it would take a year to sell off all the homes currently on the market at the present sales pace. This compares to historical standard of about a six-month inventory.
But Randall Realtors said the inventory is slowly shrinking, down to 2,078 single-family homes in September, compared with 2,400 during the spring.
"The inventory decrease is putting pressure on prices to rise," Randall said.
Randall nevertheless cautioned sellers to avoid overconfidence and overpricing. The best homes may attract competing offers, he said, but others will languish unsold if pricing isn't realistic.
"Languishing" might be a good term for another portion of the real estate market: condominiums. Sales for the third quarter were down nearly 16 percent compared with a year earlier, according to Bray's statistics.
Only condos below $100,000 and between the $300,000 and $349,900 range have seen a boost this year. Units priced at more than $500,000 currently have an inventory that would take well over three years to sell off.
"The single-family and condo markets continue to have high inventories, which have caused sellers who are leaving the area to opt to rent as a means of covering the cost of ownership," Bray said.