House sales in Connecticut jumped in August for the second consecutive month, this time by nearly 7 percent compared with a year earlier, as buyers took advantage of lower asking prices and a first-time federal home buyer tax credit.
But home prices continued to slip sharply in August, with the median sales price tumbling 13.6 percent, to $250,650 from $290,000 a year ago, according to a report Thursday from The Warren Group in Boston, which tracks the housing market in New England.
The increase in the total number of closed sales for single-family houses followed a 3 percent increase in July, the report said.
The median sales price, however, not only fell in August, but did so at a faster rate than in previous months, as unemployment and foreclosures continued to drag the overall economy down.
"The good news here is that there is evidence of a bottoming-out process," said Donald L. Klepper-Smith, an economist at DataCore Partners Inc. in New Haven. "The question is, can it be sustained against the backdrop of little or no job growth?"
As of August, the state had lost 76,000 jobs since employment peaked in March 2000, and it is expected to lose another 20,000 or 30,000 jobs in the next 10 to 12 months.
Timothy M. Warren Jr., chief executive of The Warren Group, said that if sales continue to increase, prices "should start to respond in the coming months" as the number of houses on the market shrinks, pushing up asking prices.
If sales keep rising, prices could hit bottom by the end of the year, Klepper-Smith said.
Sales of single-family houses increased in all but Tolland and Middlesex counties. The median price fell in all counties, with Windham County taking the biggest hit.
In Hartford County, single-family house sales rose 7.6 percent, to 710, in August, from 660 a year earlier. The median sales price fell 13.9 percent, to $230,000 from $267,033 in August 2008.
Real estate agents say business has been brisk, driven by the looming deadline of Nov. 30 for the first-time home buyer's tax credit. There have, however, been proposals to extend — and possibly expand — the credit.
"A lot of people want to cash in on that before it's too late," said Tom Abbate, an agent at William Raveis in Middletown. "I haven't seen activity like this for a long time."
Abbate said prices keep falling because of foreclosure and short sales. In addition, sellers are reducing their asking prices, he said.
In the past two weeks in Middletown, a third of all the single-family houses and condos on the market — 57 — had price changes, virtually all of them downward, Abbate said.Copyright © 2014, Los Angeles Times