Still ailing from the fallout of Wall Street blunders and troubled hedge funds, the Connecticut housing market is trying to get out of its slump. Even as home sales improve in much of the state the errors of the few impact the many.
In upscale Greenwich home values have deteriorated so much that many homeowners have taken their properties off the market, waiting for things to get better. More than three dozens hedge funds controlled the local economy when things were roaring, but these days many of the funds have closed up shop and left town.
Greenwich is one of the country’s most fractured luxury communities, despite a slight rise in home sales. Prices on those few homes that are selling are going at huge discounts as bankers unload properties awaiting more foreclosures in the early part of the year left by investors and traders on Wall Street, who have lost their wealth. Greenwich is forecast to see a sluggish year for sales on deflation of 11.3%.
High job losses are hurting the local economy in Bridgeport. The epidemic of foreclosures has affected the housing market as bargain hunters search for lower priced homes. The over-whelming majority of foreclosures in the area are owned by landlords, who have little reason to hold on to properties that they have lost as much as 50% equity in these days. Home prices are forecast to drop another 8.8% in 2010.
In the state capitol of Hartford unemployment and rising foreclosures are having a damaging affect on the market. Connecticut is facing a huge budget deficit as a result of fewer property owners paying taxes and rising business failures. The fall out from the credit crisis has left lawmakers to do little else than make severe cuts in the state budget. Greater Hartford is forecast to sustain average housing deflation of 8.1% for the year.
Things will take a while yet to get better in New Haven, also whacked by a crisis of foreclosures. In some cases, homeowners are trying to sell with the banks cooperation by cutting the size of the mortgage, but few short sales are approved by lenders soon enough to retain eager buyers.
The easy money that flowed from Wall Street to Connecticut blamed for causing the housing crisis has triggered a sea of problems, none of which will be solved quickly.
Some students attending Yale University are already on the hook for mortgages they can’t afford and are walking away from the property. The first time home buyers tax credit and its expansion to move-up buyers should help in New Haven’s recovery, but not before prices decline further. New Haven average housing prices are forecast to decline 8.2% in 2010.
In Stamford office vacancy rates have never been as high as they are since the bottom of the real estate market fell out. The city has lost commercial tenants of the country’s largest corporations to the ailing economy, and the inventory of homes on the market may be a buyer’s paradise. But it’s anything than that for those who have lost their jobs and are losing their homes to foreclosure. Stamford is forecast to sustain housing deflation of 9.0% for the year.