Connecticut single-family housing market study of Q2 2022 by Berkshire Hathaway HomeServices NE properties reveals continued strong demand, initial signs of a move towards a balanced market
YTD new listings of single-family homes has decreased more than 30% since 2019
Wallingford, CT (July 13, 2022) – A study of Connecticut’s Single Family residential real estate market for Q2 2022 by Berkshire Hathaway HomeServices (BHHS) New England/New York/Hudson Valley Properties reveals that as we enter the second half of 2022, homes are still selling as fast as they enter the market, often above the asking price, and inventory remains low.
Yet rising interest rates and a moderate increase in inventories is moving the market into a more balanced, stable position, one the region has not experienced since 2017.
Nonetheless the challenge remains inventory, which is still fueling strong demand. This strong demand also increased the state’s average list-to-sale price ratio, and it is now 103.1%.
This means that most homes in Connecticut are still selling above the list price, with nine municipalities show average sales prices of $1 million or more for the first half of 2022, led by Greenwich, with an average single family home sales price of almost $3 million.
The average number of new luxury listings across the state of Connecticut has declined sharply compared to the same period in 2021. The increases in price are in lower Fairfield County, particularly Fairfield, Westport and Darien. The town of Westport experienced a stunning 50% increase in average selling price and the town of Fairfield had a nearly 34% increase.
Sale prices continued their climb in Greenwich, the epicenter of the luxury home market, where they rose for the fourth consecutive year in a row, although only a slight 2.86% as compared to their Fairfield County neighbors.
The availability of newly constructed homes in the Connecticut market is in very short supply. In a trailing 36-month, year-over-year comparison, sales of completed, but never occupied single family and condominium units have declined 69%. Absorption (demand) has grossly exceeded our building rate (supply) leading to historic rates of appreciation.
Monthly building permits are beginning to increase, but nowhere near the rate needed to meet demand. Given the challenges with supply chains, rising interest rates and the work force shortages, available new product will continue to be behind the curve.
| YTD 2022 (Jan-June) Average Sold Price – Single Family Homes | ||||
| Greenwich | 2,981,151 | |||
| Westport | 2,327,627 | |||
| Darien | 1,967,548 | |||
| Cornwall | 1,216,429 | |||
| Wilton | 1,173,041 | |||
| Washington | 1,141,327 | |||
| Warren | 1,098,833 | |||
| Fairfield | 1,080,551 | |||
| Easton | 1,009,036 | |||
| Ridgefield | 909,351 | |||
| Madison | 866,989 | |||
| Stamford | 861,398 | |||
| Redding | 854,128 | |||
| Litchfield | 832,210 | |||
| Killingworth | 814,392 | |||
New Single Family Home Listings / Single Family Homes Sold (YTD Jan – June 2022)
The number of single-family home listings entering the Connecticut market has decreased dramatically since 2019, more than 30%, yet with the exception of 2021, the total number of single-family home sales in the state has remained constant.
Year Single Family Homes listed Single Family Homes Sold
2022 – (Jan-June) 20,659 14,565
2021 – (Jan-June) 24,755 17,647
2020 – (Jan-June) 23,711 14,194
2019 – (Jan-June) 29,634 14,922
The Beginning of Market Stabilization
Elements of the move towards stabilization which the study revealed include:
· Fewer showings and fewer multiple offers
· Conditions and terms are changing as warranty and appraisal contingencies are up (most buyers no longer dismissing these as an incentive to close faster)
· For the most part, paying significantly over appraised value is dissipating, as the list/sale price ratio is on a downward trajectory (important to note that ‘downward’ means from 105% to 100% of asking)
· While we were seeing homes sell from immediately to approximately two days on-market, it is now more like 20 days on market, which is still very fast
· The current slowdown is the traditional cyclical summer slowdown, which is another indicator of our transition to a “normal” market
· There are fewer pure investors, fewer second-homebuyers than six months ago, and that is creating opportunities for reduced prices in shoreline communities
· Pending Sales, another key market metric, is way down because there is very little to sell (overall inventory of single-family homes in CT is 1.3 months; 3 months in the over $500k market, and even 2 months in the $2 million+ market…both historic lows)
“As we look beyond 2022 and into 2023, we anticipate that the market will look more like it did in 2019, which was a positive, robust market,” said Candace Adams, President & CEO of Berkshire Hathaway HomeServices New England/New York Properties/Hudson Valley Properties. “Both buyers and sellers will need to begin reframing their perspectives. While we are definitely still in a seller’s market, and will be for the foreseeable future, buyers now have more options and leverage.”
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