The year 2005 was a record-setter for housing in most areas of the country and New London County is no exception. As demand increased and inventory remained low during the first 6 months of the year, average prices continued up in every town in the area. The average price of a single family home in New London County increased from $286,437 in 2004 to $317,721 in 2005, an increase of 10.9% Condo prices in the area took a jump of 13%.* During the first half of 2005, low inventory remained a problem for home buyers as homes listed were sold quickly and very close or even over the asking price, often with multiple offers. While low inventory and rising prices were great news for sellers, there was some good news for buyers as interest rates remained at record lows. During the second half of 2006, inventory levels began to build and reached the highest levels seen in several years. Pending home sales, a leading indicator to gauge market activity, also slowed during the last quarter. The "bidding wars" of the first half of the year were no longer evident as the market settled into a less hectic pace. Buyers did not feel pressure to move quickly and took more time to make home buying decisions. Although interest rates remained favorable throughout the year, it appeared that buyers simply had had enough of increasing home prices. Most market experts predict a breather in 2006 with a more moderate increase in home prices but still a "historically strong year" with increases in the 5-6% range nationwide. I like to think of it as a market going from "Great to Good" or probably more like "Great to Very Good." Sellers did very well in 2005, but it appears in 2006 that the market may shift a little more in favor of the buyer. As a result, for sellers, favorable condition and pricing will be the key to getting their homes sold. *Statistics from sales reported by the members of the Eastern CT Realtors Information Service, Inc. do not represent all sales. Information deemed reliable but not guaranteed. | 
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