Between 1960 and 2000, the median price of a home was 3 times the median income. Between 2000 and 2005, the median price increased to 4.5 – 5 times the median income. On a national scale, housing prices are coming back down again, bringing the median price back in line with median income, which will take some time.

In CT, the median price has continued to rise (between 1 and 4 percent) for the last 4 months:

“The housing market correction gripping nearby states does not seem to be squeezing Connecticut as much,” said Timothy Warren Jr., CEO of The Warren Group. “Although prices and sales are flattening, we’re not seeing the kinds of dips in numbers that Massachusetts and Rhode Island are experiencing. It may not be quite as easy to sell a home in Connecticut as it was two years ago, and homeowners can’t expect the prices to appreciate by double-digit percentages every year. But the numbers suggest a fairly balanced and healthy market.“

According to HUD, sub prime mortgages account for just 5% of all U.S. mortgages. And only 1/5 of sub prime mortgages are at risk.

Real estate is local
Media does a disservice to their readers by only reporting the national data and doom & gloom predictions. The worst problems in the housing market are confined to specific areas, and other areas are holding their own.

CT is faring better than much of the country!

• In Fairfield County, single family & condo sales rose in July. CT should not be judged by the same yardstick as Florida, California or the national market!
• CT set a new employment record in August, increasing 1,200 from July. Construction employment decreased slightly but is still up 1.8 percent over the same time in 06.
• CT ranks first in the A.G. Edwards Nest Egg Index, a ranking of personal savings and investing. At the community level, Bridgeport/Stamford/Norwalk ranked 3^rd, Torrington ranked 4^th, Hartford, 20^th and Norwich/New London, 22^nd.
• Builders are responding to the market and being more selective about what they are building, but with attractive interest rates and many homes on the market to choose from, for consumers it’s a great time for to buy.

Despite a slowdown in the housing market, the median sales price of a single-family house in Connecticut has climbed above $300,000 for the first time.

Data released Wednesday by The Warren Group found that the median price of a single-family house in the state was $307,250 in June, even as overall sales declined. Historical data from the firm shows that the median sales price was just over $200,000 five years ago.

According to economist, Don Klepper-Smith, personal income grew a very healthy 7.3% in 2006, up from earlier estimates of 5.1%. Revised 1Q07 data now reflects a huge 16% annualized gain due primarily to pay-outs in financial services, i.e. Wall Street bonuses and pay-outs to hedge fund managers.

The Connecticut economy is performing better than most analysts have observed. Moreover, these upside revisions extend into 2007.

Bottom line: Both 2007 job growth and income growth figures thus far are now greatly exceeding expectations held by analysts when the year first began. Given new data for 3Q07 as of August, the BNBB has now posted a YR/YR gain of 2.5% following a 2.8% rise in the second quarter, surpassing projections earlier in the year.

Probably the best news for the month can be found with Connecticut numbers for total non-farm employment in August. The State added 1,200 new jobs for the month, rising to a seasonally adjusted level of 1,701,600. This now represents the highest level of employment on record, topping the July 2000 level of 1,700,700 by almost 1,000 jobs.