A recent article in The Day News Paper quoted an economist as says, “Connecticut housing has become more affordable relative to residents' income, declining from a high of 5.4 times income to a current level of 4.2 times income - still about a point higher than the national average.”
This was a great article and I think that it deserves a look. Click here to view the article. We feel that the Mystic Country portion of CT is extremely unique and must be analyzed independently form the remainder of the state.
Homes selling at 4.2 times income levels are not necessarily a great thing. If we take a look at the Case-Schiller Index which states that equilibrium in a perfect world is 3 times household income then we still have a long way to go. Those figures become much less meaningful in towns where second homes are purchased and not just owner occupied primary residences are used for the calculation.
Many of the towns in the region appear to be close to equilibrium and a couple are actually below the magic number “3”...meaning that bargains exist.
Our next hurdle is the inventory. We must get rid of the inventory so that towns are absorbing the revenue streams from taxes. As soon as the towns are healthy then our budgeting gets cleaned up, schools are not shut down, roads get fixed, and town employees keep their jobs. Unemployment is another topic that warrants discussion.
People then become more confident in our economy and maybe by then the commercial loan debacle that is about to land on our laps is less disastrous. Baby steps are needed to turn things around. Activity breads results.
Tim Bray B.S. Real Estate & Urban Economics (UConn)
Sotheby's International Realty
860-912-7137
tbray@brayconsultants.com
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