In one way or another, the American subprime mortgage crisis affected everyone. Although it began at home in 2007, shockwaves were quickly sent around the globe, wreaking all kinds of havoc and dragging the U.S. economy into its worst financial crisis since the Great Depression.
The housing market, which had grown into a gargantuan, international asset bubble — courtesy of new types of securitization and deviously complex financial instruments — had finally popped, and U.S. housing prices were plummeting.
So why are there more houses selling in Wilton today than in 2007, a time when prices were clearly inflated and credit ran rampant? Even America’s most optimistic economists still foresee a long road to recovery.
The answer for Wilton’s incongruously high property demand — and comparatively low prices on the supply side — requires a local answer, one that Wilton experts say is an intricate combination of low mortgage rates, lower prices and broad sense of recovery.
Mortgage rates are low everywhere throughout the country, mainly because the Federal Reserve intentionally keeps the federal funds rate — the primary national lending rate around which other costs of borrowing gravitate — near zero.
Last year’s higher rate of sales in Wilton, despite the sharp decrease in price levels, bodes well for the housing market in 2013, according to Peg Koellmer of Realty Seven and Chamber of Commerce president.
A total of 219 single-family homes were sold in Wilton in 2012, up 23% from the year prior, but the average price level was down over $150,000. The average 2012 listing price of Wilton units was $835,743, down 17.1% from 2011.
The housing slump in Wilton began showing signs in 2008, when only 162 single-family homes were sold, down from 219 in 2007 and 233 in 2006. The median sale price was $875,000 in 2008, down from $898,750 in 2007 and $935,000 in 2006, according to numbers released by Eric Weitz and Maureen McLaughlin of Coldwell Banker Residential Brokerage.
The median sale price of a Wilton home in 2012 was $722,500, according to Ms. Koellmer.
“Interest rates are historically low and we are seeing a lot more buyers now out there looking,” Ms. Koellmer said.
Although low rates are not unique to Wilton, the town has special attributes that make it well poised for recovery, she said.
“Every one of the southern Fairfield County towns are unique in their market; Wilton is seeing increased buyer demand with its accessibility to train lines, major highways and good schools.”
Ms. Koellmer said the drop in average prices is a “balancing out” of supply and demand.
“We need to get supply down for demand to rise,” she said.
Marion Filley, a Wilton real estate agent with Prudential Connecticut Realty, also said 2013 will likely show “signs of recovery.”
Ms. Filley said 2012 sales were at a “milestone level,” and that the drop in inventory can be partially assigned to seasonal expectations.
Active listings have fallen by over 30 since Dec. 1, 2012, to 106. There were 167 active listings on Nov. 1, 2012. According to Consolidated Multiple Listing Service, year-to-date median home prices are down 12.4% in Wilton
“We’re selling more houses; we’re selling many more units,” Ms. Koellmer said. “This is the beginning of recovery.”