Single-family house prices in the state dropped about 17.1 percent in February compared to the same month in 2008, making it the fifth consecutive month that median prices have dropped by double-digit margins, according to the Warren Group, publisher of the Commercial Record.

The median price for single-family houses declined by $45,000, to $218,000 from $263,000 in February 2008. Year-to-date median houses prices fell 17.3 percent, to $220,000 from $266,000.

"We didn't see such a period of price slumps during Connecticut's last housing downturn in the early 1990s," said Timothy M. Warren Jr. in a statement. Warren is the chief executive of the Warren Group. "Prices won't level off until sales activity picks up substantially for several months straight."

The local results are mixed and the most promising news could be in Meriden.

The city's single-family house prices remained relatively flat, with a decrease in February 2009 of only $575 from February 2008. Price decreases were well below the state average at 2.86 percent, from $175,000 in 2008 to $170,000 in 2009. Sales for the year dropped 22.2 percent, from 63 in 2008 to 49 in 2009.

Paul Ott, a broker with Connecticut Prudential Realty in Wallingford, sees the city's numbers as an encouraging sign that a rebound is coming. He said sales markets aren't determined by towns, but by neighborhoods and streets. Sales activity is fueled by short sales, foreclosures, first-time buyers and investors.

"Agents on the ground in each of those local areas know what is going on," Ott said. "If we took a look at those markets that began their decline first in early '06, I bet that they would be lower-end markets - like Meriden - and that we would be seeing the beginnings of a recovery in those areas right now. In Meriden, I think that with the spring buds we are seeing a budding recovery in our real estate market."

Cheshire saw some growth in its February median price, from $309,000 in 2008 to $353,783 in 2009. The town saw an overall 4 percent drop in its year-to-year median home prices, from $297,000 in 2008 to $285,425.

But the Warren Group report noted significant drops in February home prices in Southington and a nearly 30 percent drop in the year-to-year home prices in Wallingford, almost double the state average.

"I'm really surprised," said Jeffrey Blodgett, vice president of research for the Connecticut Economic Resource Center. "That is shocking. These are two stable communities, and Wallingford has a stable tax base."

Economists view an uptick in the housing market as the first step out of the recession and crucial to the economic recovery. They view the steep drops as a correction to runaway price increases that ended when the subprime market crashed at the end of 2006.

"This has been building for several years now," Blodgett said. "Consumers will feel a little better when they see these decreases stop. We were way above a 100-year price appreciation; now we're paying the piper."

Home sales climbed in other parts of the country in February, particularly in states with high foreclosure rates. But Connecticut's foreclosure rate is lower than other states and it may have fewer bargains to offer investors. But again, Ott said, this proves the recovery is coming because much of the activity in Meriden is fueled by short sales and foreclosures.

"Those two are what you must see for a recovery to start," Ott said.

Mark Lovley, president of Lovley Development Corp. in Southington, is not seeing any price depreciation on his newly built houses. Buyers who bought in 2007 and want to refinance at today's lower interest rates are telling him the homes' assessments are coming in three percent higher than their sales prices.

"I'm not seeing it," Lovley said.

Condominiums fared even worse in the Warren Group study. Statewide condo sales plunged 42.2 percent to 316 in February 2009 from 547 in the same month in 2008. The median condo price fell 11.2 percent, to $171,250 in February from $192,900 last year. The year-to-date median condo price is $175,000, a 7.9 percent decline from $190,000 a year ago.

mgodin@record-journal.com

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