While much of the nation has experienced large drops in prices and an over abundance of homes remaining on the market, Milford Connecticut has only experienced a mild decline in housing values.
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Take advantage of the credit crisis and get yourself a wholesale mansion! By discount I’m talking about the recent CNBC report showing a 22 acre estate in Connecticut that just cut the price to $19 million.
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The nationwide housing slump has sales plummeting in some cities and median home prices dropping month by month. But, the Hartford Courant reports, the Connecticut housing market seems to be bucking at least part of that trend.
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In the United States, the housing market is still locked in a slump that began a year ago. In Connecticut, it’s more of a slowdown than a crash - and it may be pulling out of that downward curve.
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Anyone perusing the Connecticut real estate sections of late or visiting a Realtor’s Web site has seen the shocking prices, even for relatively modest dwellings.
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Another scheduled increase to adjustable rate mortgages is about to hit the nation and the state of Connecticut, which could put more families out of their homes.
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Single-family house sales slipped again in March, offering more evidence that the Connecticut housing market slowdown, while relatively mild, could remain for some time longer.
What a change one month makes.
From February to March, single-family home listings in the Greater Hartford, Connecticut housing market increased 41%, pending home sales rose 23% and closed sales climbed 37%.
The State of Connecticut is seeking the arrest of former Mortgage Lenders Network USA President Mitchell Heffernan for failing to pay employees as the subprime mortgage lender sank into bankruptcy.
Any charges would be the first against a former top executive of a large U.S. home mortgage lender since delinquencies and defaults began rising in recent months.
The Connecticut Department of Labor applied for an arrest warrant charging the home loan lender CEO with failing to pay $3 million to 61 employees of Mortgage Lenders, department spokeswoman Nancy Steffens said.
Most of the amounts owed relate to sales commissions, ranging from $5,000 to $300,000 per person, she said.
“The [home mortgage company] declared bankruptcy, requiring us to go through a criminal court to get former employees their money,” Steffens said.
“Our real purpose is to get people money owed to them. If we can work out a settlement without criminal charges, that’s great.”
Calls and e-mails to Mortgage Lenders were not immediately returned, and Heffernan could also not immediately be reached. Mark Miele, an inspector in the office of State’s Attorney Timothy Liston, who works in Middletown, Conn., declined to comment.
Mortgage Lenders had employed 1,800 people nationally, including 950 in the state of Connecticut, before filing for Chapter 11 bankruptcy protection from creditors on February 5.
The company had been the 15th-largest U.S. mortgage lender to people with poor credit histories. It expects to liquidate this year.
More than two dozen providers of subprime [bad credit home loans] have quit the industry altogether in the last year alone, and at least four large lenders have sought bankruptcy protection.
In addition to this troubled Connecticut mortgage lender, another lender (New Century Financial), faces investigation by federal prosecutors in regards to its accounting as well as trading in its stock.
New Century had been the largest independent subprime lending institution before shutting down its loan operations this month.
SOURCE: CNN Money
According to the Connecticut Post, Bridgeport-based Primrose Cos. Inc. is again planning a 283-lot subdivision in Naugatuck, betting middle- class workers are ready to buy homes they can now afford after years of the real estate market in Connecticut outstripping their means.
“My feeling has been there is not a slump in the market,” said Primrose CEO and President John N. Guedes on Monday.
Guedes said he concentrates on building homes that cost between $200,000 and $450,000 because it makes good business sense. He said it is also because he feels building affordable homes for the middle-class is a worthwhile endeavor because they are the lifeblood of the state.
When the average house is selling for more than $650,000, there’s not much available for a husband and wife making $100,000 a year and worrying about college costs for kids.
That’s why, within the next month or so, the home builders will re-submit the application to build more than 250 homes in Naugatuck.
The homes will cost between $350,000 and $450,000, Guedes said, and would be built in stages over the next eight years on 400 acres.
The Naugatuck Planning and Zoning Commission rejected the plan last time and Primrose has had to retool the designs to meet those objections.
The company’s attitude flies in the face of statistics that indicate the housing market is slowing in spite of low home mortgage rates. Experts agreed, though, that Primrose is tapping into a market that needs more attention.
Terry Egan, editor-in-chief of The Warren Group’s publications division, said it sounds like Primrose has a good grip on the market.
He agreed that building affordable and working class housing hasn’t been a priority in Connecticut, especially in Fairfield County and bordering towns. As such, there’s not a large available supply.
Egan and Donald Klepper-Smith, chief economist of New Haven-based DataCorps Partners, said the Connecticut housing market appears to be headed toward a correction, but not a collapse. That would mean prices evening out or falling slowly.
Klepper-Smith cited the relatively low mortgage rates of less than 6.5 percent as one reason for market stability.
With prices moderating and mortgage rates remaining low, there appears to be less pressure to sell middle-class families risky home loan products, according to experts at Bridgeport-based People’s Bank.
Christopher Dannen, People’s retail sales manager in mortgage lending, said when demand and prices were high, some lenders encouraged customers to take exotic loans, which included extremely low initial payments followed by extremely high payments later as the interest rate ratcheted up.
He said some people took these home loans believing when the time for the high interest payments came they would have more money available because they would get promotions and raises. But if that doesn’t happen, those people can find themselves in real trouble, he said.
Egan said interest-only mortgage and other exotic loans like this work well for young professionals, such as lawyers, who are fairly certain that their incomes will rise in the next three years.
When the market is strong, people can get out of these loans by selling the house for more than they paid when they bought it. But when the market is weak and prices are falling, mortgage refinancing may not be an option.
The trick is to not get into this situation in the first place, says Daniel Resto, People’s home buying education manager, who added that first-time home buyers can take classes to help them navigate the process.
These classes also allow people to qualify for federal and state assistance programs that can sometimes provide low-interest Connecticut mortgage loans to help cover down payments.
SOURCE: Connecticut Post