Connecticut house sales in 2012 rose for the first time in seven years, and prices could follow later this year — signs that the state’s sluggish housing market is slowly on the mend, a new report Wednesday shows.
“Sales were up in 2012, so it would appear that the worst is behind us,” Ronald F. Van Winkle, an economist and town manager in West Hartford. “That said, existing home sales are still at recession levels and have a long way to go before we can call this market in recovery.”
Single-family house sales rose nearly 15 percent across the state, to 24, 276, the highest level in three years. While encouraging, the sales volume is still well below the 30,000-plus sales that most economists would call a market in recovery, Van Winkle said.
The median sale price last year statewide fell 1.2 percent, to $240,000, from $243,000 in 2011, the most recent year being the lowest median price since 2003. The decline by percent, however, was an improvement from the nearly 3 percent, year-over-year decline in 2011.
Timothy M. Warren Jr., Warren Group’s chief executive, said there were encouraging signs in prices being paid, noting that the last three months of 2012 saw year-over-year gains in the median sale price.
“Prices have increased for three consecutive months, which is a promising sign for steady growth in 2013, Warren said.
Part of the reason that prices are being held down is because foreclosure sales and short sales still remain a good portion of the houses that are sold, said John Zubretsky, president of Weichert, Realtors — The Zubretsky Group in Wethersfield.
Zubretsky estimates that the average price of a foreclosure sale is less than half of one in which a homeowner sells a property that isn’t in foreclosure.
“That’s the reason why the numbers show what they do,” Zubretsky said.
A typical housing recovery begins with increases in sales, followed by a rise in prices buyers agree to pay. Sales of single-family houses rose every month last year, on a year-over-year basis, compared with just two months in 2011.
In 2012, sales of single-family houses rose in all eight counties in Connecticut, with the heftiest increase coming in Tolland County where sales rose 30 percent.
The median sale price — where half the sales are below, half above — fell or was flat in all but New London County, which rose more than 9 percent. Litchfield County saw the biggest drop, down nearly 7 percent.
In Hartford County, sales of single-family houses surged more than 20 percent in 2012, to 6,251 from 5,195 in 2011. The median sale price was down less than one percent, to $214,000, from $215,000 a year earlier.
Van Winkle said he expects the housing market to “slowly improve” this year and next with prices beginning to rise modestly later this year.
“For Connecticut, it is the growth in jobs that will finally add momentum to the housing market,” Van Winkle said. “Until we see improved job growth, the housing market will be lackluster.”
Connecticut did not add jobs in 2012, but revised numbers to be released in March may show more gains last year than previously estimated. Nationally, a recently released revision showed the country added 647,000 more jobs last year.
Slow job growth — and the worry that more layoffs could be on the way — are making some buyers hesitant about making the commitment, agents say.
“People who are in a position where they have outgrown their home or want to downsize, there is a hesitancy about what they can get from their home,” Paula Ostop, an agent at William Raveis in West Hartford, said. “People are nervous about that. They have a concern if they will be able to sell their home.”
Both Zubretsky and Ostop said houses are certainly selling as evidenced by the numbers. And, even in a slower market, there can be multiple offers on properties that are in the best locations and condition, with all modern updates, they say.
“Those are the ones that are getting a lot of attention,” Zubretsky said. “They can be on the market less than 10 days.”