Real estate market faring well in national slump

The real estate market cooled considerably in Connecticut in the last year but the Northwest Corner is weathering the storm nicely, area real estate professionals say.

In keeping with a national trend, sale prices in Connecticut fell 4 percent in December from a year earlier. And during that same period, the number of homes sold fell by almost 25 percent and by about 14 percent in Litchfield County, according to the Commercial Record, a Boston-based real estate trade publication.

Prices in Litchfield County and most Northwest Corner towns, however, have either held steady or risen significantly over 2006. Most striking was the town of Salisbury, which saw a 13 percent decline in sales volume (from 80 to 70) but a median sales price increase in 2007 from $425,000 to $500,000, or a rise of almost 18 percent.

"I am amazed at how well the market has held up in Salisbury," said Barbara Bigos, the town's assessor.

Still, sales of waterfront properties on the town's half dozen or so lakes have plummeted 62 percent - mostly because there are almost no buildable waterfront lots left, Bigos said.

Activity has slowed in the last three months, but before the Sept. 11, 2001, terrorist attacks, when many city people bought homes here, it was common for sales to decrease from before the holidays until the spring.

"Only since 9/11 has sales activity been sustained at comparable levels through the winter," Bigos added. "I think we are returning to normal now."

In Salisbury, sales of homes for under $1 million remain almost unchanged, while seven-figure sales declined last year from 15 to 10 (a 33 percent drop). The one category in the town that saw a large increase was land sales. Sales of vacant lots jumped by a third from 10 to 15. The latter statistic is consistent with the observation of many that there is a lot of construction of new homes and additions in the town.

The Salisbury grand list, or the net total value of all real and personal property in town, jumped last year to $1.179 billion, up almost $20 million from the previous year.

Local property taxes are determined in large part by the size of a town's grand list.

"There is still a lot of construction activity going on," said John D. Harney Jr., a Salisbury real estate broker. "And if you own real estate, this is still a pretty good town to be in."

Most brokers interviewed for this article agreed that there are fewer buyers out there, but those who are looking tend to be more serious.

"There's less activity through all levels of the market," Lakeville broker Robin Leech said. "But the buyers who are out there are more serious. There are fewer tire-kickers."

Leech noted the robustness of the higher-end segment of the Litchfield County market. Last year, a 47-acre estate on a private lake in Kent sold for $11.1 million, the highest residential sales price ever in the county. Two other county estates - one of them on Farnam Road in Lakeville - went for $6 million apiece. Leech said Tuesday his office has had three closings so far this month.

Leech said the Northwest Corner market has weathered the storm of the federal credit crisis remarkably well and he attributed some of the high sales prices in Litchfield County to the weakness of the U.S. dollar, which has allowed those outside the country to buy luxury properties with foreign currencies at substantial discounts.

"The higher-end is pretty much immune from swings in the market," said John Borden, who agreed with Leech that current Northwest Corner buyers are more cautious than they were two years ago.

Borden characterized the market as "stable and flat" and rejected the notion that it was undergoing a "correction."

"In many cases, prices were simply unrealistically high," Borden explained. "The market's not like it was, but there is activity and interest."