“McMansions? The market for $4 million to $6 million houses is very quiet …. We have a number of them sitting empty, and as far as I know, there are very few builders that are planning to build big spec homes.”

That’s what one local broker told the New York Times recently about the housing market in New Canaan.

New Canaan, a bedroom community just 45 miles from Manhattan, has some of the most expensive home prices in Connecticut. The median home price has exceeded $1 million since 2001.

But as in other parts of the state, prices and sales in this affluent town have declined. Single-family home sales plunged 40 percent to 79 during the first seven months of 2009 from 131 during the same months last year, according to The Warren Group. And the median home price is down to $1.45 million – 16 percent lower than two years ago.

 Not exactly bargain-basement prices, but still a significant discount.

And what about the market for $4 million to $6 million houses that the broker mentioned to the New York Times?

Yeah, quiet is a good way to describe it.

There were only three sales of homes priced $4 million and higher from January through July, the same as 2008 and half of the number of homes in that price range that were sold in 2007.

If you look at the types of homes that have been trading in Connecticut, it looks like first-time buyers have helped the market pick up a bit.

July home sales climbed 4 percent. But sales in the lower-end of the market — those that first-time buyers would most likely purchase – increased even more.  

A total of 1,267 single-family homes priced between $200,000 and $400,000 sold in July 2009, up 6.4 percent from July 2008, according to The Warren Group.

Meanwhile, homes with $700,00-plus price tags plunged 30 percent in July compared to a year ago.

Local Realtors say that the $8,000 first-time homebuyer tax credit has helped boost home sales, and they’re urging federal leaders to extend it.

According to news reports, the Obama administration is currently weighing a proposal to extend the tax credit, which expires at the end of November. 

The tax credit, coupled with lower prices, has been vital in bringing a flood of first-time buyers to the market, Realtors and experts say.

Incentives like this tax credit are effective because they have a deadline and create a sense of urgency. Prospective buyers, knowing that the tax credit is temporary and time is running out, are more likely to hurry and make a decision. If consumers know that lawmakers might extend the credit or even expand it, many may just take the wait and see approach – particularly if they’ve already put off home buying for a long time.

Anyway, it really doesn’t matter how much money the government throws at would-be buyers.

Consumers who have concerns about job security or those who’ve had their paychecks slashed aren’t in a position to make the biggest purchase of their lives.

Ultimately, the key to the long-term health of the housing market will be stronger employment numbers and business growth.

Homebuyers in Stamford have been able to negotiate some pretty decent discounts recently.

Stamford home prices peaked in 2006, when the median selling price was nearly $700,000. For some perspective on the rapidly rising prices in that city, the median home price was $407,000 just five years earlier – an increase of 72 percent!

Home prices have declined since 2006, and today Stamford’s median home price is down by about $143,000, according to The Warren Group.

In fact, the median price for homes sold through July — $556,500 — is closer to the prices seen six years ago.

A new report from Zillow confirms that Stamford buyers are getting some good deals.

Buyers paid 5.9 percent less than the last listed price in July, securing a median discount of $32,099, according to Zillow. The Stamford metropolitan area ranked 18^th in the nation in terms of the discounts buyers were able to negotiate.

Disgraced financier Bernard Madoff’s lavish penthouse is being sold by Sotheby’s International Realty in New York. The Upper East side co-op has been valued at $7.5 million by the government.  

Good Morning America took viewers on a tour of the property this week, pointing out that the luxury residence features his and her dens – I’m not kidding – and closets that are bigger than some Manhattan apartments.

Madoff’s “den” included a leather bull, which apparently was his logo or trademark or something like that, as a decoration.

Anyway, it’s a beautiful place in a great location. But really, how many people are eager to live in a place that a much-despised felon who ripped off thousands of innocent investors used to call home?

Doesn’t the place have a certain stigma attached to it?  

The fact that the Madoff property is up for grabs and that Sotheby’s was tapped to sell it has gotten plenty of exposure in the media. 

But I don’t think Sotheby’s is going to be using Madoff’s name anywhere in its glossy marketing literature.

In a story in The Day about how shoreline towns have seen home values increase while in other towns prices plummeted, reporter Lee Howard notes that Salem home prices have dropped steeply.

Mystic real estate broker Norm Krayem  points out that the town had a building boom a few years ago which resulted in luxury homes with price tags of $400,000 and higher. That helped drive up prices, but now that new-home construction has slowed, prices are retreating.  

The median price for homes sold in Salem through July tumbled 25 percent to $262,500, according to The Warren Group. Prices hit a peak two years ago when the median reached $339,950.

It’s a trend that probably has affected plenty of other towns: Home values taking a dive because there are fewer new homes being sold. Take Greenwich. In that sought-after town, already-high prices were bloated from the mega-mansions that sprouted up when the stock market was roaring. By 2007, the median home price had reached $2 million. Today, it’s down to just under $1.5 million.

It’s clear that Connecticut’s condo market is still hurting, despite all the positive news that filtered through about the housing market last week.

The Warren Group, for example, reported that single-family home sales climbed 4 percent in July compared to the same month last year.

But the condo market didn’t get any kind of bounce. It was the worst July for condo sales in 14 years, and sales are off a whopping 33 percent from last year.

If there was any good news to report about the condo market it was that July’s sales decline wasn’t as steep as prior months. There was only a 7 percent drop in sales year-over-year in July.

In fact, as Paul McMorrow reported in this week’s edition of The Commercial Record, July ended a 20-month long (ouch!) trend of double-digit declines in monthly sales.

Tighter lending guidelines for condos by Fannie Mae and Freddie Mac are making it harder to close condo deals. Borrowers intending to purchase a unit in a new complex will have a hard time unless at least 70 percent of the condos are sold or under contract. And no more than 15 percent of the unit owners in any complex can be behind on their condo fees.

Any bargains in the condo market are likely being snapped up by investors who are coming to the closing with cash in hand and don’t have to rely on financing.