Published August 08. 2013 4:00AM
The region's home sales are surging, but prices are not keeping up with double-digit gains seen in the rest of the country.
According to a new report by Stonington-based Sound Investment Consultants, 221 single-family sales were recorded in the region last month, an 11 percent increase compared with a year ago. But the median price of $238,000 in July was down $2,000 from the same period last year.
The condominium market, meanwhile, was looking wobbly in July compared with last year. A 24 percent decline in sales was bad enough, but the median price of $116,450 was the real shocker — less than half the median a year ago.
"The condo market is clearly taking a major hit," said Les Bray, principal of Sound Investment Consultants, in a phone interview. "There's a lot of stock out there."
Bray pointed out that July is only a one-month snapshot of the condo market. Over the past three months, sales are actually up 6 percent compared with the same period last year, though the median price is off more than 30 percent.
"It's something to watch real carefully," Bray said.
Bray said pent-up demand, reasonable prices and low interest rates are driving the single-family market, and condos may be suffering in a price comparison. In fact, homes priced under $200,000 are in such demand and with low enough inventories that they appear to be in a seller's market, while a buyer's market prevails in the upper ranges, he said.
"There's low-end demand and a limited amount of inventory," he said.
At the same time, so many homes on the market are priced above $500,000 that it would take more than two years to sell them all at the current pace, according to Bray's report. Homes in the $1 million range will take more than five years to clear.
"Affordability is a good thing that's coming out of this," Bray said.
Single-family homes are moving fastest in the northern rim of New London County, which saw a more than 21 percent increase in sales during July compared with the same month last year. Sales were slowest along the shoreline, which saw only a 10 percent boost in activity.
Communities that recorded growth in four areas of single-family sales — average price, median price, total sales and volume — were Groton, Lyme, North Stonington and Sprague. New London and Waterford were the only municipalities to record declines in all four indicators.