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House Prices Across Connecticut Have Failed To Recover Since Peak In 2007

By Patrick following x   2018 May 17, 8:21pm 842 views   9 comments   watch   nsfw   quote     share    


Home prices across Connecticut — hit hard in a housing downturn that gripped the state a decade ago — have yet to stage a broad-based recovery and remain 15 percent below the peak in 2007.

An analysis by The Courant of single-family house sale price data from 2007-2017 reveals no brighter picture when broken down by county. None of Connecticut’s eight counties has seen median sale prices recover anywhere near 2007 levels. ...

Sellers are often disappointed that their listing prices are lower than what they, or even their real estate agents, think their homes might be worth in a healthier market. This reality — especially frustrating because property taxes keep rising — has sent some would-be sellers to the sideline, leading to a tightening supply for homes for sale.

“Sadly, sometimes you look at the bricks and the mortar and it is worth X, but in this market, I can only get Y and Y is lower,” Paula Fahy Ostop, a real estate agent and partner at Marshall + Ostop Associates/William Raveis in West Hartford, said. “That’s just the market conditions that we are in.”
1   AD   ignore (0)   2018 May 19, 3:27pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

The state of Connecticut is dying a slow death, which you likely already know Patrick. Free trade and automation decimated its manufacturing base, and many companies like General Electric moved out.

High taxes are factored into home prices. Its all about buying a monthly payment when you buy a home.

Combine the high taxes with poor job prospects and that is why Connecticut home prices still are below the 2007 peak.
2   Patrick   ignore (1)   2018 May 19, 3:34pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

adarmiento says
Free trade and automation decimated its manufacturing base

The Chinese are very grateful though.

Wait, actually no, they are not grateful. They are merely amused at how we stupidly let disloyal US executives export our manufacturing base to them.
3   Booger   ignore (2)   2018 May 19, 3:47pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

15% below a bloated peak sounds expensive for CT. Houses there should mostly be priced on par with Midwest prices, except for some suburban NYC areas.
4   MisterLefty   ignore (0)   2018 May 19, 3:57pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

How Did America's Richest State Become Such a Fiscal Mess?

Connecticut is home to many wealthy residents. Its state government, on the other hand, is feeling the consequences of what some call "two decades of bad decisions."

Connecticut may be too rich for its own good. Long blessed with a disproportionate number of high-income residents, the state has entertained lavish spending habits for decades. Lawmakers have acted as if they were on a shopping spree at Christmas, confident that the money to pay off the credit cards would somehow be found in the new year. Meanwhile, they have avoided many of their less glamorous responsibilities -- depositing money into pension accounts and other retirement benefits, and paying for adequate infrastructure maintenance. Now, all those bills are coming due, and the money isn’t there to pay them.

Budget problems have become chronic in Connecticut. This year, they got worse. Faced with a projected $5 billion shortfall over the state’s two-year budget period, the legislature blew well past the July 1 budget deadline. (There was still no agreement on a budget as of mid-August.) “People have come to expect a very high level of services, while keeping taxes low,” says state Rep. William Tong. “That math doesn’t work. People are facing two decades of bad decisions and we’re having to reckon with that new reality.” In May, the three major credit rating agencies all downgraded the state, citing weak revenues. Continuing budget fights and tax increases have driven down business confidence.

Connecticut’s economic problems extend well beyond the budget. The state prospered in the 1970s and 1980s, when nearby New York City was dangerous and Connecticut’s suburban landscape was welcoming. Corporations were eager to resettle there. But fashions have changed. Millennials and corporations have developed a hankering for urban life. That urge has robbed Connecticut’s suburban landscape of its appeal. This was demonstrated starkly by the decisions of two of its marquee employers, General Electric and Aetna, to move their headquarters to Boston and Manhattan, respectively. That bad news has fed a broader negative narrative about the state, with damning coverage in outlets such as Slate, The Atlantic and The Wall Street Journal.

Connecticut has five cities with populations above 100,000, but each is below 150,000. While some of the cities are doing better than others, they all have more than their share of concentrated poverty, bad schools and unemployment. In short, Connecticut lacks a city that can take advantage of the newfound cachet of urban life. Instead, the state has had to take over the financial reins of several of its troubled smaller cities over the past two decades. Hartford, the capital, has its own chronic budget problems and has hired attorneys to explore the possibility of bankruptcy. “At a time when other states were reinvesting in cities, Connecticut was not, and certainly the state itself was not,” says Gov. Dannel Malloy. “Now, when millennials and people 50-plus want to live in urban environments, our urban environments are not up to snuff.”

The state still has the nation’s highest per capita income, but over the past 20 years, its job creation numbers have ranked in the bottom five among the 50 states. Essentially, it has created no new net employment for decades. It was only this past June that Connecticut finally managed to claim the same number of private-sector jobs that it had before the 2008 recession. Many of the jobs in finance that were lost with that year’s market crash have never returned. A disproportionate number of positions created since are low-wage jobs in the service sector. And people have begun to vote with their feet. The state has lost population for three years running. Last year, Greater Hartford ranked fourth and New Haven fifth in population loss among the nation’s 100 largest metro areas. “We’re a wealthy state,” says Oz Griebel, president of the MetroHartford Alliance, the region’s chamber of commerce, “but we’re not growing with the national economy.”

Connecticut is now at a crossroads. A model that worked for years -- safe suburbs offering good schools for the children of hedge fund managers and insurance agents -- is no longer as compelling. Mansion-size houses in the toniest precincts of the richest suburbs aren’t emptying out yet, but they are getting hard to sell.

Over the course of its long history, Connecticut has successfully reinvented itself several times, changing specialties from agriculture to manufacturing to financial services. Today, unlike other states and cities that have run into serious financial difficulties, Connecticut clearly has the means to change course. Not only is its median income still high, but the state boasts assets such as proximity to Boston and New York, amiable coastlines and river valleys, and notable institutions of higher education. In addition to the continuing presence of a thriving financial sector, Connecticut is home to aerospace and defense contractors and other advanced manufacturers who can’t hire help fast enough, as well as a growing medical and life sciences sector.

But the same sense of general prosperity that allowed the state easy access to credit in the past has left much of Connecticut feeling complacent, even as it faces clear challenges. In many parts of the state, life is still good. The loss of GE and Aetna has served as a wakeup call for public officials, but not everyone feels the same sense of urgency. Unsurprisingly, not many politicians are interested in amplifying the message in the national media that something has gone seriously wrong. “The vast majority of people in Connecticut, unless they were literally trying to sell their home to a GE executive, are not feeling the pain yet,” says Matthew Nemerson, New Haven’s economic development director.

There are a couple of practical reasons why the state may have a hard time changing course, though. To start, its political culture is highly parochial, with strong home rule protecting the interests of 169 cities and towns and nearly as many school districts. Connecticut has the nation’s second-highest rate of income inequality, after New York, but there isn’t a sense in the smaller communities that their future is tied to improving the health of those less fortunate. “More than anything, we suffer from a lack of common identity and the sense of a common future,” says Hartford Mayor Luke Bronin.

The other roadblock is partisanship. As fiscal problems have grown entrenched, it’s become more difficult to find political consensus. Democrats say the state can’t solve its problems with massive spending cuts, and favor both a state sales tax hike and a change in law to allow cities to raise sales taxes on their own. But Republicans blame the state’s woes on decisions in 2011 and 2015 to address shortfalls by bumping up tax rates. They have no appetite for more. “Companies aren’t going to stay here,” says Themis Klarides, the GOP leader in the state House, if taxes keep going up. “They certainly have no reason to come here.”

Complaining about tax hikes has been a winning message for Republicans. At the start of the Obama presidency, Democrats enjoyed a 114-37 majority in the state House and a 24-12 advantage in the state Senate. Now, the state Senate is tied, although the Democratic lieutenant governor can cast tie-breaking votes. Last fall, Republicans came within four seats of taking over the House. Malloy, who has the lowest approval rating of any Democratic governor in the country, admits he was lucky to win re-election in 2014. He isn’t seeking another term next year. It’s not hard to imagine that Connecticut, long dominated by Democrats and still one of the bluest states in presidential voting, could fall under complete Republican control in 2018. That would cause a huge shift in direction.

For Connecticut as a whole to thrive, however, there has to be not only broad agreement about the need to shake things up, but something like consensus about what changes the state should make. Connecticut has not reached that stage yet. “What was once our strength has now become, in my opinion, our weakness,” says state House Speaker Joe Aresimowicz. “We are the land of steady habits and the world has changed around us.”

Connecticut can’t say it wasn’t warned. Back in 1999, a report by a consultant named Michael Gallis identified the state’s aging transportation network, its “fragmented political structure” and the lack of a metropolitan center or strategy as glaring weaknesses. The report was widely discussed and still gets talked about in planning circles, but it didn’t convince policymakers or the public that the state needed to change its ways. A sense of isolation -- that Connecticut benefited from not having the same problems as New York or Boston -- kept residents thinking of their state as its own little pocket of prosperity, rather than as part of a bigger region in which it must compete.

At the start of the new century, Connecticut still prospered, its economic growth outpacing the country’s as a whole. That allowed it to issue income tax rebate checks to residents -- $50 to individuals and $100 to couples. These added up to $100 million that, in hindsight, many analysts wish had been devoted to paying down state pension debt, which the Malloy administration puts at $22 billion, although private estimates count it much higher. Instead of making regular pension fund contributions, Gov. John Rowland made a deal with labor unions a decade ago that allowed the state to defer paying them. “My predecessors lived in good times and didn’t spend any of that good-time revenue to attack the state’s long-term problems,” Malloy complains. “I’m living in slow growth and I’m putting every dollar into retiring long-term obligations.”

The state is also struggling to fund its teachers’ retirement system. While it has been able to renegotiate benefit levels with its own employees, benefits for teachers are negotiated with local districts. If the state isn’t able to stretch out its payments to the teachers’ pension plan, as it did with the state workers’ fund, its mandated contributions are set to balloon from $1.2 billion this year to $6 billion in 2024. “We are faced with legacy problems that have finally caught up with us,” says Matt Ritter, the state House Democratic leader.

Longstanding debt isn’t Connecticut’s only financial problem. Back in 1992, shortly after the state imposed a personal income tax, voters overwhelmingly approved a spending cap. The constitutional amendment they voted for, however, didn’t define what the spending cap would be. The legislature has been able routinely to exceed the statutory cap by declaring spending “emergencies” or employing other gimmicks. In 2015, the state attorney general ruled that the spending cap as it stands is legally unenforceable.

5   lostand confused   ignore (0)   2018 May 19, 4:27pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

IL is another area I think has never reached 2007 peaks. I don't think it ever will with people fleeing and blood err tax thirsty democrats scheming to tax the remaining residents more.
6   Booger   ignore (2)   2018 May 19, 6:41pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Unlike IL, I do think that CT has potential.

And as for the lack of spending on infrastructure, yeah I remember driving through CT once and hitting a pothole so big that the hood of my car popped open!
7   Tenpoundbass   ignore (14)   2018 May 19, 6:46pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

An ever growing population of below middle class the "Diddled Class" is getting squeezed out of housing, be it mortgaged or rental. And they are cheering for definition of a recovered housing Market to return to half million dollar median prices on a single family starter home. It boggles the mind.
8   Hugolas_Madurez   ignore (4)   2018 May 19, 8:49pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

They also became hostile to firearms manufacturers and I believe several of these has moved out in the recent years.
9   Malcolm   ignore (1)   2018 May 20, 10:00am   ↑ like (2)   ↓ dislike (0)   quote   flag        

Jackson, MS, Detroit and many others. Some people will never understand how devastating our trade policies were on the Midwest and the South. Hillary supporters still can't grasp how disconnected the government was from those regions. To understand this, consider that there are people living in those areas who have never seen a construction project. Maybe a road repair or a garage addition.

I say that because I literally heard of one of those areas whose planning department have not issued a building permit since the 1970s, and that was for a garage addition.

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