No Jobs = More Foreclosures

Over 14,000 property owners have faced foreclosure in Connecticut this year, and economists and bankers are saying that many of them are falling behind on mortgage payments because of unemployment.

A Washington Post story notes that growing unemployment has become the main driver of foreclosures in this county. It wasn’t too long ago when everybody was blaming subprime mortgages for this mess we’re in.

That’s bad news for Connecticut, which has lost more than 70,000 jobs since March 2008. And the Connecticut Center for Economic Analysis predicts the state will shed another 35,000 jobs over the next year.

There were 14,384 initial foreclosure filings in Connecticut during the first two quarters, up 34 percent from 10,696 last year, according to The Warren Group.

A total of 2,671 foreclosures occurred in the first half of 2009, which is slightly higher than the same months last year.

The Warren Group’s July numbers will be released soon, and it will be interesting to see whether there’s been any significant change in these trends.

Not all communities in Connecticut are seeing deep housing discounts. Take Newtown, for example. The median selling price for single-family homes in the scenic town about 60 miles from New York City climbed 10 percent to $500,000 in the first two quarters from $455,000 during the same period in 2008, according to The Warren Group.

 The increase comes at a time when the statewide median home price fell 13 percent to $236,600 in the first six months of 2009 from $272,500 last year.

 Despite the statewide decline, some communities have had double-digit gains in prices. The small charming town of Burlington, which has had only 36 sales transactions so far this year, saw its median home price escalate 32.5 percent to $375,000 from $283,000. In East Windsor, another Hartford County community, the median home price jumped 30 percent to $261,000 from $200,000.

 And seaside Old Lyme saw prices increase 14 percent to $375,000 from $328,758.