Fairfield County Home Values Rising

Federal tax credits, low interest rates and the lure of Fairfield County's schools, recreational facilities and quality of life fueled a striking increase in single-family home values in Fairfield County during the second quarter of 2010, experts say.

Towns such as Darien, New Canaan, Fairfield, Westport and Wilton are seeing either rising home values or values decreasing at far slower rates in Q2, according to new data from the University of Connecticut School of Business Center for Real Estate and Urban Economic Studies.

From April through June, a number of factors positively impacted home sales, John Clapp, the center's director, told Patch.

"It seems that during that time period, the home buyer tax credit was influential," Clapp said. "Also, people are moving with the school year, so those who want better located, larger houses are buying during that spring and summer."

What the center does to determine home values is unique. The difficulty with using home sales and "average home prices" to determine a market's strength is that samples vary widely. In a weak market, for example, some homeowners may decide to hang on and not sell at all, meaning a look at homes sold may be non-representative and misleading.

The center neutralizes that effect by estimating what homes with specific traits (factors such as age and square footage) would sell for in a given town, given the market. The quarter-over-quarter indices are divided into "low," "mid" and "high" tiers, where high represents more valuable homes.

Here's a snapshot of some Fairfield County towns:

Darien

For the first time in two years, and only the second time in 14 consecutive quarters, year-over-year upper-tier home values are rising. A 59-year-old Darien home with 2,471 square feet, for example, is now worth $1.35 million – a 5.7 percent increase over the year-ago quarter.

Fairfield

After nearly two years of double-digit drops, the rates at which home values are declining are leveling out dramatically across all tiers. Partial data for the second quarter indicates improvements in the low (38 years old and 1,326 square feet), mid (46 years old and 1,586 square feet) and high (52 years old and 1,995 square feet) tiers. Specifically, year-over-year values in the low tier fell at 9.1 percent for the second quarter (compared to 14.65 percent for the first quarter); mid tier, 5.1 percent (compared to 12.4 percent); high tier, 1.3 percent (compared to 11.2 percent).

New Canaan

For the first time in four years, mid-tier home values in New Canaan are not only not falling but are showing dramatic improvement. And home values in the low- and high-tier categories also are improving. Specifically, for example, a 40-year-old home with 2,851 square feet in New Canaan is worth $1.17 million – a 2.7 percent improvement over the second quarter of 2009 in a category that fell more than 22 percent just one year ago.

Westport

In terms of sheer numbers, Westport home values are seeing some of the most dramatic improvement of all. After two years of declining home values across all tiers, Westport's rates of decline began to improve in the first quarter. In the second quarter, home values improved (from low to high tiers, on a year-over-year basis) by 7.3, 8.1 and 8.8 percent. So, for example, a "high tier" home (47 years old, 2,232 square feet) was worth $1.66 million in the second quarter of 2009, and $1.81 million in the second quarter of 2010.

Wilton

Home values in Wilton improved in the second quarter, on a year-over-year basis, to a degree not seen since late 2005 and early 2006. That goes for all tiers. In the second quarter of 2010, homes in the low tier improved year-over-year by .3 percent percent, in the mid tier by 6 percent and the high tier by 6.5 percent.

Ridgefield

The UConn center does not track data in Ridgefield. But according to MLS data available on William Raveis, July 2010 saw 86 single-family home sales in town, compared to 73 in July 2009. The median sales price for a home rose 9.6 percent year-over-year for July, according to the MLS.

Even given all of that positive movement, real estate is not yet at a point where professionals in the industry are breaking out the balloons and party hats.

"Year over year in Darien we saw significant improvement from 2009 to 2010," said Darien realtor Jeff Kelly of Kelly Associates. "The second quarter was great and that carried over to July. But in August, we saw a very abrupt halt to activity. August was very quiet, with six to seven transactions."

Kelly attributes the so-far-temporary rise in home values to the significant drop in interest rates, and low home-equity rates. But fear of a double-dip recession could rear its ugly head in a couple of months, when third-quarter data is published.

"That's what people are talking about at cocktail parties," he said. "Are we headed for a double dip? We are hugely correlated with what happens on Wall Street."

Realtor Melanie Smith of Prudential, who represents Westport, Southport, Fairfield and surrounding areas, said she's optimistic about the numbers she's seeing lately -- especially the fact that the condominium and townhouse market is also booming.

"Prudential has a market report for every year, and every quarter this year in 2010 is better than 2009, which was a disaster," Smith told The Patch.

In Fairfield, her agency's numbers were especially promising in the second quarter. Year-over-year sales came to 301 single family homes in Q2 2010, "almost double" the 171 sales in Q2 2009.

"More people are feeling confident than they do in other parts of the country," Smith told Patch, also crediting low interest rates for the better numbers. "It's a buyer's market."

But Clapp cautioned that the second quarter's positive numbers -- which are based on statistical analysis of raw, town-by-town transactions data from the Warren Group in Massachusetts – do not necessarily indicate a final verdict for 2010.

"We won't see the data until the end of September," Clapp said, adding that anecdotal reports suggest an increase in foreclosures in the county. "And the end of the tax credit's also a big negative factor. But interest rates are still low, and that's positive."