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New Canaan Home Values Down $533,000 Since 2006

Home values all over Fairfield County have dropped continuously since the market peaked in 2006, according to the UConn School of Business's Center for Real Estate and Urban Economic Studies. Here's a 2012 'State of the Real Estate' in Fairfield County.

 

Much of the United States has been on a slow path to recovery from the "Great Recession," but real estate data show Fairfield County home values have dropped continuously since the 2006 market peak.

According to the UConn School of Business’s Center for Real Estate and Urban Economic Studies, mid-tier* home values in 14 Fairfield County cities and towns have diminished by an average of nearly $250,000 since 2006.

Dr. John Glascock, director of the Center, blames the “severe downturn” in real estate on the national liquidity crisis, which led to the bankruptcy of large financial institutions like Lehman Brothers.

While some look back at the subprime mortgage crisis as a huge factor that lead to the Great Recession, Glascock said only 15 percent of the general economic calamity could be attributed to subprime mortgages.

Looking at the Fairfield County market, the town of Trumbull is the lone anomaly—its home values rose by a net increase of $20,000 between the first quarter to 2011 and the first quarter of 2012. The rest of the Fairfield County markets cited in the indices have seen, for the most part, quarter-to-quarter drops since 2007. Exceptions include a good quarter or few per town.  

Town

Last Increase in Mid-Tier Home Values

Bethel

2006 - Qtr 4

Danbury

2006 - Qtr 1

Darien

2011 - Qtr 1

Fairfield

2008 - Qtr 1

Greenwich

2010 - Qtr 4

Monroe

2011 - Qtr 3

New Canaan

2011 - Qtr 2

Newtown

2010 - Qtr 2

Norwalk

2011 - Qtr 1

Shelton

2011 - Qtr 4

Stamford

2010 - Qtr 4

Trumbull

2012 - Qtr 1

Westport

2011 - Qtr 2

Wilton

2011 - Qtr 1

[Editor’s Note: UConn’s Center for Real Estate and Urban Economic Studies produces and updates “constant quality” price indices for 69 towns in Connecticut, 14 of which represent markets in Fairfield County. The figures date back to 1999 and estimate the prices that homes with specific characteristics will sell for in a given quarter, thus neutralizing market demand and making it possible to compare year-to-year market information. See the bottom of the story for more data and charts.]

When Lehman Brothers failed, Glascock said, Real Estate Investment Trust Prices “dropped like a rock.” The dip in housing prices followed, along with climbing unemployment rates and a sour economy.

The combined liquidity crisis and high rate of unemployment contributed to the lasting housing downturn, Glascock said. “People will hold off on purchasing a home when there’s high unemployment.”

Area Real Estate Agents Weigh in

Local real estate agents agree. Cathy Masi, broker and president of , said that in 2009—the year when the national unemployment rate hit 10 percent and Connecticut’s hovered between 8 and 9 percent—“was a wasteland. Nothing was going on.”

Grim data aside, Glascock expects the market to begin to stabilize this year or next year. When that happens and prices start to creep up, “people will be rushing in to get the bottom price” on listed homes.

Taxes, particularly in Fairfield County, “make a big impact” on how the market will turn, according to William Raveis, founder, chairman, and CEO of , who operates out of a Raveis office in Southport.

“Taxes are killing everybody,” he said. “It’s almost too expensive to live here.”

Raveis thinks a true upturn won’t occur until 2013, partly due to tax rates acting as “ankle weights” on prospective buyers. He hopes new tax policies will help stabilize the state of real estate.

The state of the job market also plays a role in improving the markets. While Raveis cited the “huge opportunity” that the current market’s affordability factors—the depressed home prices and close-to-3-percent interest rates on mortgages—represent, he said only those prospective buyers who feel financially sound are jumping to buy.

“The only way buyers will seize opportunities will be if we can bring jobs to Connecticut,” Raveis said. 

Signs of Life in 2012 Spring Market

The early start of spring 2012, however, has shown some promising signs already. Raveis said the his company’s numbers for April look “pretty good.

They’re going north for the first time—there have been more transactions.”

Down in Greenwich, real estate agents at have seen a recent uptick in sales in that market, according to Managing Broker .

Agents in her office have been taking two to three prospective buyers out each day to look at homes in the area. In fact, just minutes before speaking with Patch, Anderson heard from one of her top realtors, who said one of her buyers found their dream home. At the same time one of the realtor’s listings had an accepted offer.

“I think it’s really moving now […] it feels like we’re here, we made it,” Anderson said. “We’re feeling very optimistic and excited bout the wave of the market.”

Up in Newtown, Cathy Masi said she’s seen multiple offers on listed homes, something that hasn’t occurred in recent years. Demand for homes hasn’t quite reached a level that would mean a rise in home values and prices, but we’re slowly heading toward a balanced market, she said, because sales activity is getting closer to the number of homes for sale.

“Buyers want to get on with their lives; sellers want to get on with their lives. That’s the trend I’ve been seeing,” Masi said.

Appendix

Comparing Quarter 1 to Quarter 1 from 2006 to 2012 (2012 Q1 numbers were just released earlier in April)

Year Bethel Danbury Darien Fairfield Greenwich Monroe New Canaan Newtown Norwalk Shelton Stamford Trumbull Westport Wilton   2006 $419,940 $372,764 $1,169,668 $559,908 $1,225,982 $478,195 $1,528,607 $472,665 $517,356 $510,164 $699,246 $492,563 $1,310,374 $898,833   2007 $419,940 $349,314 $1,126,463 $569,593 $1,163,741 $445,950 $1,468,065 $415,836 $496,935 $518,939 $676,137 $480,819 $1,320,192 $873,618   2008 $390,593 $322,863 $1,039,126 $570,570 $1,145,492 $439,624 $1,398,965 $378,852 $500,847 $492,331 $644,197 $394,882 $1,304,541 $856,939   2009 $357,300 $282,215 $878,361 $477,024 $952,343 $409,736 N/A $328,712 $400,757 $433,182 $547,279 $326,620 $1,081,408 N/A   2010 $320,296 $270,420 $851,357 $426,721 $942,268 $375,948 $1,181,401 $335,835 $392,016 $405,927 $541,092 $304,635 $1,013,565 $669,311   2011 $305,066 $242,899 $856,431 $415,810 $921,374 $364,489 $1,178,210 $327,825 $403,177 $388,693 $537,660 $270,216 $1,047,119 $676,393   2012 $278,470 $222,082 $796,603 $401,788 $905,918 $348,611 $995,549 $299,237 $321,980 $358,040 $512,703 $290,709 $933,288 $574,618   Net Increase/(Decrease) from Q1, 2006 to Q1, 2012 ($141,470) ($150,682) ($373,065) ($158,120) ($320,064) ($129,584) ($533,058) ($173,428) ($195,376) ($152,124) ($186,543) ($201,854) ($377,086) ($324,215) Ave Net Decrease: $244,047.79 Net Increase/(Decrease) from Q1, 2011 to Q1, 2012 ($26,596) ($20,817) ($59,828) ($14,022) ($15,456) ($15,878) ($182,661) ($28,588) ($81,197) ($30,653) ($24,957) $20,493 ($113,831) ($101,775) Ave Net Decrease: $49,697.57

 

*Mid-Tier: Mid-tier describes the characteristics of homes in the “middle” of each market—those homes that fall into the middle of the range of square footage, age, and price within a town. See the attached PDF for details for each market in the state.

– Michael Dinan contributed to this report.

Four Jacks April 24, 2012 at 11:03 AM
Very informative, love the tables! Uh oh, $30K less commissions for the brokers on the average house!
Paul M Potenza April 24, 2012 at 12:57 PM
Would someone clue Malloy in on the tax problem? Raising unemployment taxes on employers and levying new taxes on existing services only depresses revenue or drives sales underground to avoid taxation.
Michael Dinan (Editor) April 24, 2012 at 04:51 PM
"Never. When we moved there in 2005 we knew that those prices were unsustainable. We haven't lost a dime and will probably buy a very nice house now at a realistic price."--Jennifer Harkins Garone, New Canaan Patch Facebook page (http://www.facebook.com/NewCanaanPatch) in response to this question: "When did you buy your home in New Canaan?"
Tom April 25, 2012 at 02:16 PM
Does anyone else find it interesting that you don't see a similar adjustment to the town's assessments? In the 40-50 homes that I looked at on the New Canaan Assessor's website I did not see the assessments shift down by any real numbers. In fact, my house jumped $100K between 2006 and 2010 without any material change to the home. With regard to this article, I believe a fundamental shift in the way Wall Street pays people has also had an an effect on the housing markets.
J Bauer April 25, 2012 at 03:44 PM
It doesnt matter anyway Tom. In towns in Westchester, lower assessments came with higher mil rates. The only thing that matters is that our local politicians spend less money during difficult economic times when home prices are lower and wealth destruction is occuring. Unfortunately for us residents, our leaders are not spending less money. In fact, they are increasing the budget by almost 3.5% and patting themselves on the back for the great job that they are doing! And, dont forget, they all have dreams of knocking down Town Hall and building something more acceptable to them. Once we factor that into the equation, we are all looking at higher taxes, higher spending and higher debt levels for the forseeable future! Ludicrous, if you ask me.
S Tadik April 25, 2012 at 06:43 PM
J Bauer, you have hit a home run again. As you drive down Main St., look at the expensive sidewalks being erected as you bounce and jounce in the ruts of this road which has needed repairs for four years. The pitted road gets even worse in order to install the sidewalks and badly-needed road repairs were delayed until the referendum could be hijacked by the politicians through deception and dirty tricks. The bounces and jounces are a graphic reminder of the fragile economy while the sidewalks falsely commemorate this expensive pet project. The citizens are bouncing and jouncing in fiscal doubt. Even though the emperor has no clothes, the citizens must pay the piper. We can only hope the citizens remember the co-conspirators at election time.
Tom April 25, 2012 at 07:42 PM
S Tadik and J Bauer, You are right on the "money" however people are more concerned about the prospect of movie stars moving to town. The rest is too hard to digest and gets in the way. BTW, who is paying for those wonderful stone walls that are suddenly appearing next to the sidewalks? I am pretty sure I know the answer since the tax man is knocking at my door telling me I don't pay my fair share! I say; "Lower Taxes, bring back King George"!
S Tadik April 25, 2012 at 08:42 PM
Those walls will hold down the new road when it is fixed. By the time they get it done, they will run out of money and the road will be made of supermarket cardboard boxes. Otherwise, a strong wind will peel the road like a grape.
TH April 26, 2012 at 03:55 PM
J Bauer, I couldn't have said it better myself. It drives me nuts to see the Advertiser articles praising these 'small' increases in overall budget and hearing the politicians pat themselves on the back for it. I'd personally drive to town hall and thank them if they were able to reduce the town budget one year. When is the last time the budget went down? Perhaps they should poll the citizens to see if anyone's income has gone down... with the huge Wall St. exposure in our town, I am sure a large portion of the town has seen their income decline, but sure enough, our taxes will increase again...

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