Business Express: All Signs Point to Strong Economic Recovery

Housing remains a key economic indicator in the region bolstered by strong job growth at Mohegan Sun and Electric Boat, as well as successful workforce development by the Eastern Connecticut Workforce Investment Board (EWIB). 

According to the Chamber of Commerce of Eastern Connecticut, rising home sales and new rental housing construction in New London, Groton and Norwich is helping to spawn a noticeable economic recovery in the region, especially as hospitality, entertainment, and manufacturing keep pace with hiring quotas.  

The Eastern Connecticut Association of Realtors (ECAR) recently reported that compared to the second quarter of 2016, the number of single-family home sales increased by 14.8 percent and condo sales increased by 20 percent. In addition, housing prices in the eastern Connecticut market are back up to 2010 levels. 

The Norwich-New London labor market is also growing. Between May 2016 and May 2017, employment increased 2.1 percent and the area’s unemployment rate fell to 4.8 percent from 6.9 percent in 2014. 

“The housing recovery has been on an upward trend over the years,” said Susy Hurlbert, Chief Executive Officer of the Eastern Connecticut Association of Realtors. “Interest rates have been on the rise, which has encouraged activity, but job growth has also been very positive, which has helped the recovery.” 

But while the number of residential land sales has increased by 4.8 percent, commercial sales has decreased by 9.5 percent and multi-family home sales has dropped by 27 percent, showing that signs are still there for some challenges ahead. 

“New construction remains a depressed category of housing for one simple reason – costs,” said Greg Hanner, Board Secretary for ECAR, and Realtor and Broker Associate with Garden Reality. “Developers are having a hard time keeping costs down versus what consumer can afford. Costs to develop continue to rise through elevated restrictions from municipalities, insurance, labor shortage, taxes and revised building codes that are elevating energy efficiency standards.” 

However, in New London, the Building Department issued more than 175 residential and commercial building permits in 2016-2017, which is more than in the previous year. This is due in part to several housing projects that are in the works including the City Flats program to renovate historical homes in downtown. 

“We still have lots of stock that could use an upgrade,” added Hurlbert. “We would like to see more opportunities for upgrading existing inventory, rather than building new homes. People want to be in places where everything is right at their fingertips, and New London has that.”  

And other cities and towns are following suit. 

Long Meadow Landings, an apartment complex along South Road in Groton, is building an additional 22 rental units, while permits for construction are expected soon on a separate 19-unit town house rental complex in town. In addition, planning approval was recently granted for construction of another 147 rental units in three buildings in town.

And in the Taftville neighborhood of Norwich, The Lofts at Ponemah Mills is expected to open soon. This $30 million housing complex at the massive former textile mill site along the Shetucket River is planning to open 116 one- and two-bedroom housing units along with other residential amenities including a fitness center, gallery and resident movie theater. And that’s just phase one. Subsequent phases will put 121 units in the northern half of the complex, plus townhouses in the three buildings fronting the Shetucket River.

“As people see a large inventory of homes in the marketplace, it’s more important than ever to use a professional realtor,” said Hurlbert. “The realtor can help avoid pitfalls, especially in a market where there’s glut of older homes needing upgrades and repairs. We can help navigate the inspections, as well as negotiations with sellers and buyers.”