Connecticut leads the U.S. in home price declines
As the financial services industries continue to suffer, federal housing data shows Connecticut has suffered the greatest home price declines in the nation, Bloomberg News reported. The declines are led by Fairfield County, which includes such leafy communities as Greenwich and New Canaan, where prices fell 12.9 percent annually, according to National Association of Realtors, more than any of the 147 areas the group tracks.
The connection between the poor housing performance — a surprise considering the state’s proximity to Boston and New York — and the struggling banking industry is clear. While home transactions using conventional mortgages increased 8.4 percent, those using jumbo loans for more expensive properties fell 9.7 percent.
Meanwhile, Wall Street bonuses fell 13 percent last year and the state has lost 3,900 financial service jobs in the last year alone. Further, Connecticut municipal debt was downgraded by Moody’s as the state collects less revenue thanks to declining capital gains tax receipts.
The problem will likely get worse before it gets better, Bloomberg said. Goldman Sachs, Bank of America, JPMorgan Chase and Citigroup reported their worst quarterly earnings since 2008 for the three months ending in June. There’s also a deep backlog of foreclosures that could further depress prices in the state. And Connecticut doesn’t attract a lot of international buyers or buyers who work in sectors beyond financial services — two segments that have buoyed New York City of late. [Bloomberg] — Adam Fusfeld