A bump up in home sale prices in greater Hartford at the end of the year was not enough to lift prices for 2017, compared with the previous year, a new report Thursday shows.
For 2017, the median sale price of a single-family house slipped about a half percent, to $220,000, compared with $221,000 for 2016, according to the monthly report from the Greater Hartford Association of Realtors.
The 57-town area tracked by the association was unable to build on the annual year-over-year 4.25-percent sale price gain achieved in 2016, the first annual gain in three years.
Annual sales of single-family houses rose in both 2015 and 2016, with the latter registering a double-digit gain. Sales rose again in 2017, but by a far more modest clip, increasing just 3 percent.
A declining median sale price does not necessarily mean all home prices or values are falling. Sale prices can vary dramatically from town to town or even neighborhood to neighborhood and are driven by property condition, updates and location. But the median still provides a well-watched indicator of broader market trends.
While greater Hartford has shown more instances of strength than other parts of the state, the area has struggled — like the rest of Connecticut — to recover from the most recent recession. The recession hit housing hard in Connecticut.
“The Hartford area housing market is treading water at this point and the same thing can be said for Connecticut’s housing market,” Donald L. Klepper-Smith, an economist at DataCore Partners Inc. in Durham, said. “The point needs to be made that the Connecticut housing market and the Hartford housing market continues to face challenges going into the new year. 2018 is going to look a lot like 2017.”
Connecticut is still suffering from slow job growth, having recovered only about 70 percent of the jobs lost in the last recession. By comparison, the nation has recovered all the lost jobs and doubled the number lost. And Massachusetts, has more than tripled the number that state lost, Klepper-Smith said.
“You can’t get traction in the housing market without meaningful traction in the job market,” Klepper-Smith said.
Connecticut isn’t likely to recover all the jobs lost in the last recession, which ended in early 2010, until 2020 and there is a looming possibility of another broad economic slowdown before then, Klepper-Smith said.
John M. Zubretsky, president of Weichert Realtors-The Zubretsky Group in Wethersfield, said the uncertainty surrounding the state budget last year and persistent worries about Connecticut’s fiscal stability are weighing on the minds of buyers.
“The biggest thing to me is the fear of the unknown of the economic climate of the state,” Zubretsky said. “Everyone is talking about it.”
Zubretsky said the dwindling inventory of houses for sale also is a concern because buyers can lose interest if there isn’t a steady supply of new properties to look at.
Inventory has been declining in recent months and that trend continued in December. The number of houses for sale fell more than 21 percent. New listings also fell in December.
There are also concerns about dwindling numbers of buyers amid census reports of residents moving out of the state, Zubretsky said.
In a typical recovery, home sales increase first followed by prices.
Since the recession, the housing recovery in greater Hartford — and Connecticut — has been uneven. Sales of single-family houses posted double-digit, year-over-year increases in 2012 and 2013, with prices registering a gain in 2013.
Sales were disappointingly flat in 2014, and prices again lost ground, with a slow spring market mostly to blame. In 2015, the spring market was far more robust, with an upswing in sales continuing into the fall. Sales ended 2015 with strong gains, but prices did not post an overall increase.
In 2016, there was much optimism about turning a corner. Sales of single-family houses rose 11 percent, with prices gaining 4.25 percent.
Although experts did not forecast such price gains for 2017, most were looking for a modest upturn.
In December, sales of single-family houses fell nearly 3.5 percent. Sale prices registered about a 2 percent gain, rising to $219,000 from $215,000 for the same month a year ago, the association said.