Real estate: 2015 a ‘solid’ year
The real estate market, both locally and statewide, was a mixed bag in 2015, with some strong movement and some backsliding.
“Overall, 2015 was a solid year for the housing market” in Connecticut, a report from Berkshire Hathaway HomeServices New England Properties said.
There were 29,081 single- family Connecticut homes sold in 2015, up 10.41% from 2014, when 26,340 were sold. The 2015 median sale price was $231,800. This is down 1.36% year over year. The median in 2014 was $235,000.
“As rates continue to be at historic lows, buyers will still be able to take advantage of lower-priced homes and the increase in inventory in the coming months. In addition, the rising cost of rentals in Connecticut will bring new people into the home-buying market,” the report said.
“We’re still in recovery; there’s no question about it,” Peg Koellmer, principal broker at Wilton independent real estate agency Realty Seven told The Bulletin.
That’s why she thinks market expectations need to be managed. “Don’t look for surprises this year, or huge increases. We’re just going to coast through,” she said.
That would make sense economically, in the opinion of Dr. Nicholas Perna, chief economist of Webster Bank.
Last year was a year of modest economic growth for Connecticut and for the United States. Since housing demand is driven by buyer income, “these are not the makings of an ebullient housing market,” he told The Bulletin.
They could be the makings of a modestly growing market, but in Perna’s opinion, the modest benefits that the current national and state growth trends should bestow on the real estate market here are being offset by economic uncertainties and the buyer misgivings they cause.
“I don’t expect things to improve dramatically in 2016,” Perna said, giving a forecast similar to Koellmer’s. “We’re going to get the same amount of total economic growth, but we’ve got this whole budget thing still hanging over our heads, and we’ve got the GE move coming in summer.”
Realtor Patrick Filley of Berkshire Hathaway tends to agree with Perna. “There’s no question that the exodus and the change in structure of certain businesses has had an effect,” he said, adding that the “overall tax situation” in Connecticut may have contributed to the state’s decline in median sale price year over year.
Against 2014, there were fewer homes, more land, and the same number of condominiums sold in Wilton in 2015.
There were 207 single-family homes sold last year. This is down 9.6% from 2014, when 229 were sold. The median sale price, however, stayed flat from 2014 to 2015, at $815,000 for both years.
According to Koellmer, these are “sobering” statistics for people looking to sell their Wilton homes. “The market used to increase double digits every year for a while,” she said, though admitting that that “was not sustainable.”
Nevertheless, “I’m not dissatisfied with what happened in Wilton in 2015,” Koellmer said. “We’re dead even with median sale price. I think we should look forward to another stable year. If you look at 2008, we were all praying for stability. Now we have it.”
Data for condominium sales in Wilton shows that, while the number of listings sold stayed flat at 26 from 2014 to 2015, the median sale price increased by 5.83%, to $381,000 from $360,000.
Land sales in Wilton were up, with 10 parcels sold in 2015 compared to three in 2014.
District Reference Group A
For a review of area towns, The Bulletin looked at Connecticut District Reference Group A, which includes Wilton, Westport, Ridgefield, Darien, New Canaan, Weston, Redding, and Easton. Four DRG A towns are more populated than Wilton, while three are less so.
This year, almost all district towns saw decreases in median sale price for single-family homes from 2014. The only two that didn’t were Weston, which grew modestly, and Wilton, which remained flat at $815,000.
As for closings, the set splits evenly. The towns of Darien, New Canaan, Weston, and Redding all sold a greater number of single-family listings in 2015 than they did in 2014, while Westport, Ridgefield, Wilton, and Easton sold a lesser number. Second to Easton, Wilton fell the furthest — by 9.6%.
Redding saw by far the steepest increase in number of sales — 41.40% — in 2015. A total of 123 listings were sold in 2015, compared to 87 in 2014. Redding also saw the steepest decrease in median sale price, a 10.10% drop from 2014, when the median was $586,500, to 2015, when it was $527,000.
According to Koellmer, Redding’s real estate market has been “very bad” ever since 2008. “There’s a lot of things working against Redding,” she said. “It doesn’t have its own downtown, it doesn’t have proximity to water, it doesn’t have direct train lines.”
In her opinion, Redding’s inventory is severely backed up. This would explain the considerably low number of listings sold there in 2014 compared to 2015, as well as this year’s decrease in the Redding median sale price.
That said, “Redding is going to come back fine,” Koellmer added; “we’re all going to come back fine. But people’s expectations need to be managed.”
Of all DRG A towns, Weston was the only one to have increased both its number of listings sold and median sale price in 2015.
“I think Weston is on sale,” Filley said. “If you go and look at houses there, there are large discounts from what some of them were purchased for before.”
Westport, Ridgefield and Easton were the three towns that saw decreases this year in both number of listings sold and median sale price. While this can be an “indicator of a bad market,” according to Filley, neither Westport nor Ridgefield is down very far.
“Westport went down less than 1% in units sold, and the median sale price is down less than 2%. That’s unremarkable,” Koellmer said. Ridgefield, likewise, is down by less than 3% in listings sold, and less than 2% in median sale price.
While Easton’s median sale price fell by less than 2%, the town sold 12.5% fewer homes this year than last. Like Redding, though, “There’s a lot of shadow inventory there,” Koellmer said.
Across the years that have passed since the boom and bust of the United States housing bubble, Wilton’s real estate market has been volatile.
For instance, between the years of 2004 and 2015, the highest median sale price for single-family homes in Wilton was recorded at $955,000 in 2006. By 2009 it had fallen 21.2%, to $752,500.
In 2010 and 2011, Wilton saw a surge in sale prices. The median sale price recorded in 2009 rose by 2.99% to $775,000 in 2010, and the 2010 median rose by 6.45% to $825,000 in 2011.
The median sale price for single-family homes in town then fell dramatically from 2011 to 2012, by 12.42% — down to $722,500.
Prices were back on the rise by 2014. From 2012 to 2013, the median went from $722,500 to $795,000, making a 10% jump. It climbed a little higher in 2014, by 2.5%, to $815,000, where it stayed in 2015.
This report was compiled with data from multiple listing services provided by Berkshire Hathaway HomeServices and Realty Seven.