Connecticut 2019 Fourth Quarter Market Report Summary
Connecticut Year in Review
2019 ENDS WITH SALES MOMENTUM AND MIXED NEWS ON INVENTORY LEVELS BASED ON PRICE-POINTS
In 2019, the Connecticut real estate market was experiencing a low supply of homes for sale, with just over four months of available inventory across all price points to end the year (a ‘healthy’ range of available inventory is four-six months). Demand remained steady throughout the year, thanks to low-interest rates and high consumer confidence; however, statistics show that buyers were less town-loyal and opted for locations where they perceived they had more choices and could obtain a higher value.
When comparing 2019 to 2018, average price and total homes sold dipped slightly, primarily affected by the uber-luxury sector. Average days on the market was historically low for the state – 77 days, an 11% reduction when compared to 2018. Additionally, the last two months of the year gained momentum, with a 2.6% increase in homes sold year over year.
Luxury home sales, those priced over $2 million, were down 13.8% in 2019 when compared to 2018. However, the $2 million - $3 million range remained static in terms of the number of sales and average price. But there were areas of growth, such as the town of Greenwich, which saw nearly 4% more sales in this price range when compared to 2018, while in New Haven County, the number of waterfront homes sold doubled from 6 to 12 when compared to last year. There are currently 975 homes for sale priced over $2 million, a two-year supply when considering the lagging sales rates of 2019. The ideal supply of inventory in the high-end market is 12-18 months. So while two years of inventory is a bit on the high end, it is positive compared to many other areas of luxury throughout the country, many of which are experiencing high double-digit inventory.
In more moderate price ranges, towns like Bridgeport, Berlin, East Granby, and Southington -- all offering different lifestyles and a good mix of properties -- saw astonishingly strong sales numbers to end the year. Boasting an average price of $760,000, the town of Wilton saw a 12.6% increase in sales for 2019 as buyers saw the value they would receive when choosing this quiet and charming, commuter town.
Nationwide, buyers of new homes grew at the fastest pace in more than 12 years at the end of 2019. Fortunately, builders in Connecticut seem more poised than ever to meet these demands. Through November of 2019, the Connecticut Department of Economic and Community Development reported a 35% increase in new build permits in 2019 when compared to 2018. Dwellings with more than 5 units comprised most of these permits with 58.3%, closely followed by single-family homes at 37.2%. At Berkshire Hathaway HomeServices, new development activity surged in the last quarter of the year, with numerous single-family, rental, and commercial projects scheduled to break ground in this new year.
Steady home prices and fourth-quarter gains in entry-level luxury and moderate price points show promise for 2020. 2019 was not a typical real estate year with seasonal highs and lows in the Northeast and we predict that 2020 will follow a similar trend. According to CNBC, “open houses, which are usually pretty rare the first week in January, were plentiful in markets across the nation this year, as buyers hope to get in before the competition gets even worse.” In short, the spring market is here! Our advice to buyers is that they get pre-approved before they start their home search so that they are ready to make an offer, as multiple offer scenarios will be frequent due to lack of supply. Mortgage rates remain low, giving buyers more purchasing power; however, the combination of low-interest rates and critically low supply may push up pricing – a reason for sellers to list now and for buyers to start their home search before the Spring! According to Core Logic, Connecticut has one of the most significant opportunities in the country to see increased prices – because of the undervalued market and strong demand coming out of nearby cities, Manhattan and Boston.
At Berkshire Hathaway HomeServices, we offer the unique ability to help buyers and sellers alike with all their home-ownership needs. As the largest real estate company in the nation, our agents have partnerships with mortgage, insurance, home warranty professionals, and an exclusive moving concierge service to make the real estate experience a true one-stop-shop for today’s consumer. If you have any questions regarding the material presented in this report or any other real estate questions, please contact your Berkshire Hathaway HomeServices New England Properties sales associate. Our REALTORS® are here to help you navigate the current market with expert knowledge and exceptional service.