The housing market in Connecticut has seen significant changes and trends in recent times. It is essential for homebuyers, sellers, and investors to stay informed about the current market conditions and forecasts to make informed decisions. In this blog post, we will explore the house prices and trends in the Connecticut housing market.
House Prices & Trends in Connecticut
According to the data from Redfin, in April 2023, home prices in Connecticut experienced a notable increase of 7.6% compared to the previous year. The median home price in Connecticut stood at $380,200. However, there was a decrease of 31.0% in the number of homes sold year over year, with only 2,644 homes sold in April 2023, compared to 3,834 homes sold in April of the previous year.
The median days on the market also increased to 36 days, indicating a slightly slower pace of sales compared to the previous year. The median price of a home in the United States is currently $380,200. This value is an essential indicator of the strength of the housing market and whether homes are becoming more or less affordable.
Top 10 Metros in Connecticut with the Fastest Growing Sales Price:
- Westport, CT: 29.9%
- Newington, CT: 14.2%
- Bristol, CT: 13.9%
- Waterbury, CT: 12.4%
- Stamford, CT: 12.2%
- New London, CT: 8.6%
- Meriden, CT: 8.3%
- Manchester, CT: 8.2%
- Middletown, CT: 7.9%
- Torrington, CT: 7.5%
Connecticut Housing Supply
Are there enough homes for sale to meet buyer demand? In April 2023, there were 9,396 homes available for sale in Connecticut, representing a decrease of 25.8% compared to the previous year. The number of newly listed homes also decreased by 33.5% year over year, with 3,802 new listings. The average months of supply remained at 2 months.
Connecticut Housing Demand
How competitive is the market? In April 2023, 58.0% of homes in Connecticut sold below the list price, indicating a decrease of 5.9 points compared to the previous year. The percentage of homes with price drops increased from 10.0% to 11.3% year over year. The sale-to-list price ratio was 102.3%, representing a slight decrease of 1.1 points compared to the previous year.
Homes Sold Above List Price: The percentage of homes selling above the list price is a significant indicator of market competitiveness and the prevalence of bidding wars. Currently, 58.0% of homes in Connecticut are sold above the list price.
Top 10 Most Competitive Cities in Connecticut:
- Newington, CT
- Jewett City, CT
- North Grosvenor Dale, CT
- Sherwood Manor, CT
- Wethersfield, CT
- Danielson, CT
- Kensington, CT
- Old Hill, CT
- Windsor Locks, CT
- Manchester, CT
Connecticut Housing Market Forecast 2023-2024
According to the available data, the Connecticut housing market has shown positive growth over the past year. According to Zillow, the average home value in Connecticut is $364,082, representing a 5.8% increase compared to the previous year. Homes in Connecticut are going pending in approximately 7 days, indicating a competitive market with high demand.
Here are some additional statistics regarding the Connecticut housing market:
- Median sale to list ratio: As of March 31, 2023, the median sale to list ratio in Connecticut was 1.001, suggesting that homes were selling very close to their listing prices.
- Percent of sales over list price: In March 31, 2023, approximately 47.6% of sales in Connecticut were made above the list price. This indicates strong competition among buyers and suggests that sellers were able to secure higher offers for their properties.
- Percent of sales under list price: During the same period, around 39.6% of sales were made under the list price, indicating that some buyers were able to negotiate prices lower than the initial listing.
- Median days to pending: The median number of days for a home to go pending in Connecticut was 7 as of April 30, 2023. This relatively short timeframe suggests a fast-paced market where homes are being sold quickly.
Looking at the forecast for various Metropolitan Statistical Areas (MSAs) in Connecticut, we can see projected growth rates for the respective regions. Please note that these forecasts are based on available data and assumptions:
Hartford, CT MSA: The forecast for the Hartford region suggests a 0.3% growth rate by May 31, 2023, followed by a 0.6% growth rate by July 31, 2023, and a 2.3% growth rate by April 30, 2024.
Bridgeport, CT MSA: The Bridgeport region is projected to experience a 0.4% growth rate by May 31, 2023, followed by a 0.9% growth rate by July 31, 2023, and a 3% growth rate by April 30, 2024.
New Haven, CT MSA: The New Haven region is expected to see a 0.5% growth rate by May 31, 2023, followed by a 0.8% growth rate by July 31, 2023, and a 3.7% growth rate by April 30, 2024.
Norwich, CT MSA: The Norwich region is forecasted to have a 0.6% growth rate by May 31, 2023, followed by a 1.1% growth rate by July 31, 2023, and a 3.9% growth rate by April 30, 2024.
Torrington, CT MSA: The Torrington region is projected to experience a 0.6% growth rate by May 31, 2023, followed by a 1.3% growth rate by July 31, 2023, and a 4.8% growth rate by April 30, 2024.
These forecasts suggest that the housing market in Connecticut, particularly in the mentioned MSAs, is expected to continue growing over the forecasted periods. However, please note that these projections are subject to various factors, such as economic conditions, interest rates, and housing supply and demand dynamics, which may influence the actual market performance.
Will the Housing Market Crash in Connecticut?
Connecticut's housing market has been performing strongly in recent years, but with the current state of the economy and the ongoing pandemic, some are wondering if a crash is on the horizon. While no one can predict the future with certainty, here are some factors to consider when evaluating the likelihood of a housing market crash in Connecticut.
There is undoubtedly a slowdown in the pace of home sales in the Connecticut housing market, but it is more of a return to normalcy. This is neither a crash nor a bubble; housing demand is still present. The slowdown is ideal for buyers who are weary of being outbid in a hot Connecticut real estate market or who are experiencing buyer fatigue.
When there is a boom in the housing market, it is in part generated by an increase in job growth and a fall in the unemployment rate. The relationship between the economy and the housing market cannot be severed. The strength of the economy and the rate of job growth both have an impact on the purchasing power of prospective homeowners. Connecticut ranks among the top five wealthiest states in the country due to the number of residents who travel to well-paying jobs in New York City and the number of significant corporations with headquarters in the state.
Connecticut also has the fourth-highest percentage of college-educated residents (about 35.6%) and is home to Yale University, which U.S. News & World Reports rated third in the nation in 2015. According to Connecticut State Comptroller, the labor market remains strong. Nationally, there are nearly two job openings for every unemployed worker. Connecticut added 1,600 jobs in May and has now recovered 83% of the jobs lost during the pandemic, including 86% of private sector jobs.
Three sectors — construction, professional and business services, and trade, transportation, and utilities — have added jobs above pre-pandemic levels. Connecticut’s per capita income of $82,918 is the third-highest in the country and, today is increasing the state’s minimum wage to $14 per hour. The state has recovered 83% of the jobs lost during Covid-19 and 3 industry sectors have rescued over 100% of the jobs lost.
Home prices are directly affected by demand, which, according to real estate experts, isn't going away anytime soon. However, they are not rising as quickly as they once did, and Connecticut real estate agents predict that prices will level off or rise slightly this year. Some of this is most likely due to rising interest rates.
Sources:
- https://fred.stlouisfed.org/series/TNSTHPI#
- https://www.neighborhoodscout.com/ct/real-estate
- https://www.ctrealtors.com/
- https://www.osc.ct.gov/public/pressrl/2022/Jul012022_Financial_Status.pdf
- https://www.ctinsider.com/connecticutmagazine/article/Whats-next-real-estate-market-connecticut-17023057.php
