Real Estate Market Reving Up

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U.S. home prices jumped 12.1 percent in April from a year earlier, the biggest gain since February 2006, as more buyers competed for fewer homes.

Real estate data provider CoreLogic said in a report on Tuesday that prices rose in April from the previous April in 48 states. They also also climbed 3.2 percent in April from March, much better than the previous month-to-month gain of 1.9 percent.

Prices in Nevada soared 24.6 percent from a year earlier, the most among the states. California’s gain was next at 19.4 percent, followed by Arizona’s 17.3 percent, Hawaii’s 17 percent and Oregon’s 15.5 percent. Connecticut prices were up 3.3 percent, with Fairfield County’s 6.7 percent jump leading the way, CoreLogic said. On a month-to-month basis, prices in the county increased 3.7 percent.

Nationally, some states are reporting a huge upswing in investors snapping up homes in the lower price ranges and then renting them out. While investors are a healthy portion of the market here, realtors say prices in Connecticut have kept so called “fix and flippers” in check, somewhat.

Because housing prices are on the high end here, it’s harder for investors who want to flip a house for a profit to win in a bidding war with a buyer who plans to live in the house, said Paulette Cuozzo, an agent with Fairfield County Real Estate, based in Fairfield.

“I’ve found you can generally outbid the person who wants to sell it,” said Cuozzo.

She noted that lower-priced homes can start at $300,000 in some parts of the county, while out West, similar houses would cost less than $100,000.

Like other professionals in the area, Cuozzo was not surprised market prices have gone up.

“Starting to see bidding wars,” she said, but noted there are a combination of forces at work in our market.

Interest rates have gone up now for several weeks, and that’s pushing some people to make a decision. Younger families looking for better school districts are also making the move into communities here.

“I had a young couple who came up from New York looking in the $400,000 range,” she said.

If there is anything holding back the market here, it is the job market, she said. People still aren’t as secure as they were during the economic boom, and the fear of foreclosure makes some of the younger buyers skittish, she said.

“It’s a completely different outlook for the younger generation,” she said, recounting how young adults watched friends and family lose homes and saw the lingering credit problems created by a foreclosure filing.

Nationally, more people are looking to purchase homes. But the number of homes for sale is 14 percent lower than it was a year ago. The supply shortage has contributed to the price increases nationally and locally.

Rising home prices can help sustain the housing recovery. They encourage more homeowners to sell. And they spur would-be homeowners to buy before prices increase further.

Home sales and prices began to recover last year, six years after the housing bust. They have been buoyed by steady job gains and low mortgage rates.

Sales of previously occupied homes ticked up to a 3 ½-year high in April, according to the National Association of Realtors. And they are likely to keep growing: A measure of signed contracts to buy homes rose to its highest level in three years in April. There is generally a one- to two-month lag between a signed contract and a completed sale.

The limited supply of homes has also made builders more willing to ramp up construction. That’s creating more construction jobs. Applications for building permits rose in April to the highest level in nearly five years.

Prices climbed in April from the previous year in 94 out of the 100 largest U.S. cities, CoreLogic said. That’s up from 88 in the previous month.

Los Angeles and Phoenix reported the biggest price gains among the cities, CoreLogic said. Prices in both cities leapt 19.2 percent compared with a year earlier.

They were followed by Atlanta and Riverside-San Bernardino, which both posted 16.5 percent gains. Dallas rounded out the top five, with a 10.2 percent increase.

Despite the large gains, home prices are more than 22 percent below their April 2006 peak, the CoreLogic survey found.

In Nevada, they are still 47.3 percent below their peak, and in Florida, prices are 40.5 percent below their peak.

Connecticut, despite the high prices, is still as much as 35 percent down from the peak, according to Tom Braunagel, co-owner of the Braunagel Team of Keller Williams Realty Partners in Trumbull.

He said the good news is that people are coming back into the market and his office closed sales on 20 more homes in May than in April.

The Associated Press and Staff writer Rob Varnon contributed to this report.

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