Connecticut Real Estate Market: What to Expect in 2024 and 2025?

The current median home sale price of $478,800 is stable and rising steadily. Moreover, homes have been sitting on the market for 28 days. This indicates that the real estate market in Connecticut is slightly competitive.

The average months of home supply is 2 months which is stable year over year. A market with fewer months of supply indicates a seller’s market.

However, the number of homes sold dropped by 7.9% YoY in June. There were 3,457 homes sold in June 2024, down 4,115 homes sold in June 2023. Such inactivity in the market is mainly due to the recent NAR settlement. People are anxious about the selling prices and agents’ compensation.

The NAR settlement has removed the buyers’ agent compensation and many MLSs have followed the suit. It will probably reduce the home selling prices. As a result, buyers will have improved affordability along with low mortgage rates. Here are some tips for you to sustain in the market:

• If You Are a Home Buyer: With an inventory of 9,971 properties and the potential for further price drops, now is a good time to buy your new home. The low interest rates at 5.98% are also in your favor. Consider negotiating for seller concessions to further benefit from the purchase.
• If You Are a Home Seller: You can lock in Connecticut’s current high home prices. The correction in the home prices is long overdue. In the wake of the NAR settlement, home prices may drop a little more. If you’re a seller, you can still make profits on home sale before prices potentially drop.

So, How Is the Real Estate Market in Connecticut?

Balanced!

The number of homes for sale decreased by 7.9% in June 2024 compared to the previous year. This is the 8th consecutive month the housing market has witnessed such growth. Single-family homes for sale are down by 16.6% and condos are down by 21.2%.

• Median Days on Market: The median days on market for homes for sale is 28 days, up by 1 day YoY. This trend suggests a high demand in the Connecticut real estate market.
• Housing Inventory and Supply: If you’re a buyer, you have slightly fewer options to choose from. Homes for sale decreased by 7.9% YoY. Currently, there are 9,971 homes for sale in Connecticut. Also, the average months of supply of 2 months.
• Average Home Prices: The median home price in Connecticut is $478K. But, it is expected to decrease due to a rise in inventory in the latter half of 2024. The sale-to-list price ratio is at 104.3%, with a decline of 0.097 pt YoY.
• Home Sales: As per June 2024 data, home sales decreased by 16% YoY! Only 3,457 homes were sold, down from 4,115 in June 2023.
• Average Rent Prices: Rental costs vary statewide. An average tenant in Hartford pays $1430, while the one living in Weatogue pays $2,375.

Why Is Connecticut a Seller’s Market Now?

Connecticut’s real estate market has a low inventory of homes for sale. Besides this, a steady increase in median home prices favors home sellers. Homes spend only 28 days on the market which depicts the competitive market. Let’s look at some more facts:

• Fewer Days on the Market: Homes are spending fewer days on the market. This is visible in metro cities like Greenwich, North Haven, and West Hartford, where the average days on the market are between 15 to 18 days.
• Multiple Offers on Homes: Connecticut got 74 in Redfin’s Compete Score. It means the housing market in Connecticut is very competitive. Many homes get multiple offers, some are even sold without contingencies.
• High Sale-To-List Price: The average homes sell for about 4% above list price whereas hot homes sell for about 9% above list price. The average sale-to-list price ratio is 104.3%.
• Homes Sell Above List Price: On average, 66.8% of homes in Connecticut sell above their list price. In June, only 18.7% of homes saw price drops, which indicates strong demand and competitive market conditions.

Connecticut Real Estate Market Predictions

Here are the predictions for Connecticut’s housing market in the remaining months of 2024 and 2025:

1. Number of Home Buyers Will Increase: As inventory grows and homes stay on the market, more home shoppers are expected to re-enter the market. The historically high interest rates averted buyers in 2023. But the easing inflation and stabilizing rates will bring back house hunters.
2. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across CT YoY, reaching $478K in June 2024. Cities like Greenwich and West Hartford expect a surge in home prices 17.7% by March 31, 2025.
3. iBuyers Will Continue to Make Lowball Offers: iBuyers like Opendoor and Offerpad, which once offered 104.1% of market value in 2021, now offer around 70%. Such lowball offers to sellers will increase opportunities for individual buyers.

Bonus Predictions: Buyer Broker Commissions Will Be Zero!

In a shocking turn of events, the NAR settlement has completely eliminated buyer agent fees from the MLS. Let’s understand its impact:

1. Buyer Agents Will Be Affected: With buyers now responsible for directly paying their agents, many may choose to find their homes on their own. This may very soon render buyer agents obsolete.
2. Seller Concession Will Increase: Without the obligation to pay buyer agent commissions, sellers might see increased requests for seller concessions and offline transactions. Additionally, builders are offering significant concessions to attract buyers, further influencing the market dynamics.
3. Builders Will Compete More: Home builders are persuading buyers to buy new construction homes with mortgage buydowns worth $30K!
4. Sellers May Offer Fees for Services: Sellers may offer at least 1%-2% fees to the buyer agents in order to sell their homes quickly. Increasing competition from builders may also cause sellers to pay extra fees to buyer agents.

Is the Housing Market in Connecticut Going to Crash?

A housing market crash in Connecticut is unlikely.

Connecticut ranks among the top in the nation for household income, with a median household income of approximately $90,213. In cities like Bridgeport-Stamford-Norwalk, home prices soared by 13.7% year over year, while the Hartford-East Hartford-Middletown area witnessed a 10.9% increase.

Hartford, the capital city, has a population of around 121,000 and is home to major employers like Aetna and Hartford Financial Services. It’s also one of the fastest-growing cities in the state. Connecticut’s job market remains strong, with an unemployment rate of just 3.6%.

Additionally, the state’s proximity to major metropolitan areas like New York City offers further employment opportunities for residents.

2024: Is It a Buyers’ or Sellers’ Market Now?

The Connecticut housing market is more in favor of sellers. The number of homes for sale has dropped by 8.7% from last year, and new listings are down by 12.4%. This means there are fewer homes available, which gives sellers an advantage and creates more competition among buyers.

Even though mortgage rates are around 5.98%, which is manageable for buyers, the lower number of homes makes it harder to find and secure a property. For sellers, this is a great opportunity to list their homes on Connecticut MLS to benefit from higher prices and quicker sales.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

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