Hamden experienced a slower market in 2011, which comes as no surprise to those of us who follow economic data. Despite lower listing prices and historically low interest rates, worries about jobs and uncertain local, national, and world economies weighed heavily on buyers' minds. Money was cheap last year, but really hard to get from banks. Wealthy people with great credit had no problem obtaining mortgages. This was reflected in the surprising number of homes that sold in the upper brackets - $750,000 and up. The middle range got hit hard and the low range, below $150,000, made up of short sales and foreclosures, dragged the market down. Buyers drove a hard bargain, and sellers not willing to negotiate are still holding their homes. I don't see a big change in the market this year, unless there is a stimulus of some kind to move the bank-owned inventory and make money more readily available to all buyers.
In 2011, 354 single family homes sold in town, down 11% from a year ago sales of 397 homes. More troubling, the average sales price per square foot dropped 6% to $135.54 from $144.47 in 2010. I'm using data from the Greater New Haven Association of Realtors and looking at "average" sales prices. As we know, statistics are skewed by the sales of very low priced foreclosures, but that has been a factor for several years now. We are still seeing a drop in prices.
What's it going to take to break this log-jam? For one, it's getting cheaper to own, than to rent. With four big colleges in the area, there is always a demand for rentals, so prices stay high. It makes sense to try to find a mortgage, such as a Connecticut Housing Finance Authority "CHFA" mortgage, and buy a private home right now. Housing is not a luxury - we all need a place to live. I tell my clients, "If you are paying for housing, why not pay for a place you can own?" By the time renters come up with two month's worth of security and the first month's rent, they effectively have a down payment. Second, there are small signs of an improving economy. These recessions don't last forever, despite the never ending feel of this one. The economy will start to grow again, and it can't come a moment too soon.
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