(Bloomberg News) Connecticut, for 25 years the state with the highest per capita income in the U.S., is now leading the nation in home-price declines as Wall Street trims jobs and bonuses that had driven multimillion-dollar property sales.
Prices in the Fairfield County area, home of the banker bedroom communities of Greenwich and New Canaan, tumbled 12.9 percent in the second quarter from a year earlier, the biggest decline of the 147 U.S. metropolitan areas measured by the National Association of Realtors. While the number of home purchased within the state financed with conventional mortgages rose 8.4 percent in the first half, deals using jumbo loans for pricier properties slid 9.4 percent, according to Warren Group, a real estate tracker.
"We're in a tough slog here relative to everybody else, which is surprising given where we're located, near New York and Boston," said Terence Beatty, director of the new homes and land division of Prudential Connecticut Realty in Wallingford.
The state, which hosts the world's two largest bank trading floors within UBS AG and Royal Bank of Scotland Group Plc's Stamford offices, is falling behind a U.S. housing recovery after losing 3,900 financial-services jobs since July 2011, the most of any industry. Connecticut also is struggling with rising foreclosures, posting the nation's second-biggest jump in notices of default and repossession last month.
Prices Fall
Prices for single-family houses fell 4.7 percent in the second quarter, the biggest decline of any state, according to the Federal Housing Finance Agency, which measures transactions financed with mortgages backed by Fannie Mae or Freddie Mac. That compares with a nationwide increase of 3 percent, the most since 2006, as record-low mortgage rates and a limited supply of properties for sale provided a foundation after the worst housing crash since the 1930s.
The S&P/Case-Shiller index of home values in 20 U.S. cities gained 0.5 percent in June from a year earlier, the first increase in almost two years, a report showed today.
The median sales price for Manhattan condos and co-ops in the second quarter was $840,000, up 2.4 percent from a year earlier, according to StreetEasy.com, a property listings Web site. In the Boston area, the median price for a single-family house rose 1.8 percent to $362,100, data from the National Association of Realtors show.
Connecticut doesn't have as much economic diversity or appeal to international buyers as Manhattan, according to James Aiello, who co-owns about six houses in the Greenwich area that he began purchasing in the mid-2000s.
The state has only regained a third of the about 117,500 jobs that it lost during the recession, figures from the Connecticut Department of Labor show, and the unemployment rate has risen for three straight months to 8.5 percent.