July 13, 2018

Residential R.E. in state continues slow recovery

HBJ File Photo
HBJ File Photo

Connecticut's housing sector posted mixed results in calendar year 2017, reflecting the state's tepid economic recovery.

That's the conclusion of the July 2018 Connecticut Economic Digest, released this month by the state's Department of Labor and Department of Economic & Community Development (DECD).

According to data released by the Bureau of the Census, Connecticut municipalities authorized 4,547 single and multifamily homes in 2017, reflecting a total valuation of $1.185 billion. That production level indicates a 17.4-percent decrease from the 5,504 units authorized in 2016, according to the report.

Last year, 2,480 of the issued permits statewide were for single-unit construction, reflecting 54.5 percent of the total, while 42.0 percent were multifamily (five units or more).

The largest share of housing permits (37.8 percent) was issued by Fairfield County municipalities. Hartford County (21 percent) and New Haven County (16.5 percent) followed. Among individual municipalities, Norwalk authorized the most units (429) in 2017. Locally, the leading municipality was Milford, which approved 194 housing units.

Despite the sluggish new-construction numbers, the volume of home sales and median prices continued a strong upward trend statewide, according to the report. According to figures from the Warren Group, "single-family sale numbers reached a pre-recession high not experienced since 2006. Last year, single-family home sales totaled 34,259, a 5 .0-percent increase from 2016." Condominium sales mirrored that trajectory, increasing 7.9 percent to 9,054 units statewide.

From the same report, median single-family home sales prices posted a more modest increase of 1.6 percent, to $249,900, in 2017. Condominium sales prices likewise increased 0.3 percent during the same time period.

Housing and population are closely related. The size of a population, particularly the number of households, fuels the demand for housing. Figures from the last two decennial censuses shows that the Connecticut population grew at a level of 52,867, or 1.7 percent, on average, annually. According to 2016 American Community Survey (ACS), the latest census data, state population was estimated at 3,588,570. Since 2010, the state's population has grown little, increasing by an average of 7,122, or 0.2 percent, annually.

While the U.S. economy posted robust growth in 2017, with real GDP increasing more than two percent, Connecticut's economic recovery has been more modest — a trend strongly reflected in statistics for residential real estate construction and sales.

Reach Michael C. Bingham at mbingham@newhavenbiz.com

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