Home sales in Connecticut were unexpectedly strong in May after the year got off to a slow start, a new report Thursday shows, but a key component of the state's housing recovery is still lagging: consistent overall price gains.
Sales of single-family houses in May jumped nearly 11 percent, to 3,260 compared with 2,947 for the same month a year ago, according to the monthly report from The Warren Group, which tracks real estate trends and publishes The Commercial Record.
The sales were healthiest for the month since 2006, just prior to the last recession and a long-running housing downturn. But the median sale price -- in which half the sales are above, half below -- rose just under 2 percent in May, to $251,450, compared with $247,000 for the same month a year ago, the Warren Group reported.
Through the first five months of 2017, sales of single-family houses rose 6.4 percent, compared with the same period a year ago. The median price was flat, at $235,000, and is 20 percent below the most recent peak of $295,000 in 2007.
The spring housing market — traditionally the strongest of the year and a strong indicator of developing trends for the year — showed a tentative start in March and April with sales flat or down slightly.
Donald L. Klepper-Smith, an economist at DataCore Partners Inc. in Durham, said low interest rates are helping to spur home purchases.
But Klepper-Smith said slow employment growth and the dire condition of the state's fiscal health is making buyers reluctant to pay too much for a home. And that is forcing owners to set asking prices in line with what is moving, if they want to sell their home, he said.
"There is also some mismatch of the kind of housing desired and what's in the marketplace," Klepper-Smith said. "We're not seeing a lot of new housing growth, so the inventory is down."
Klepper-Smith cautioned not to paint the state with too broad a brush, noting there are pockets of strengths and weakness.
Shifts in the median does not mean all sales are following the same trend or that home values are generally rising or falling. The median also can be influenced by the mix of houses sold. Prices can vary widely from town to town and even neighborhood to neighborhood.
The median sale price, however, does provide a broad, overall indicator in price trends for the state or individual counties.
Across the state, the median sale price of single-family houses in May rose in six of eight counties. But the overall statewide median was dragged down by a nearly 19 percent decline in Tolland County and an almost 4 percent drop in Windham County.
Sales rose in all but Tolland County.
In Hartford County, sales of single-family houses in May rose nearly 5 percent, to 829, from 792 for the same month a year ago. The median price rose less than 1 percent, to $221,000, from $219,900 for the same period.
Connecticut's housing recovery since the recession has been uneven. Sales of single-family houses posted double-digit, year-over-year increases in 2012 and 2013, with the median price registering a gain in 2013. Sales were disappointingly flat in 2014 and prices again lost ground.
In 2015, sales again saw a double-digit surge, but prices slid. Last year, sales reached their highest level in nine years, but prices were flat.
