2023 Connecticut Housing Market Report
Recent updates
The Connecticut housing market is beginning to recover and improve, with a number of pending house listings being taken off the market as the number of buyers increases during the month of January 2023. As mortgage rates begin to tick downwards, buyer demand appears to be coming back from its lowest point, as indicated by mortgage applications, property inquiries and Google searches rising.
What is the state of the Connecticut housing market?
2022 was a rocky year for the housing market, all across the United States due to rising interest rates, and a 40-year high inflation. However, all was not lost for the Connecticut housing market. Fortunately, for those looking to buy or sell, notable locations such as the New Haven and Fairfield Counties experienced a strong buyer demand across the market. Houses are moving quickly in regions such as the Northeast, where properties are priced accordingly.
Overview – Year to Date
The average sale price for homes in Connecticut is at an all time high in 2022, being an average of $585,000, however, the number of sold properties have significantly decreased in 2022 to 35,177, back to levels seen in 2016. 2021 saw 44,027 properties sold in comparison. 2022 saw an average DOM (day on market) of 36, which has decreased since 2021, which was 44.
New listings: Down by 17.89%. 51,666 in 2022 compared to 62,921 in 2021
Sold properties: Down by 19.4%. 45,160 in 2022 compared to 56,031 in 2021
Median listing price: Up by 6.27%. $339,000 in 2022 compared to $319,000 in 2021
Median selling price: Up by 6.84%. $345,000 in 2022 compared to $322,900 in 2021
Median days on market: Down by 29.17%. 17 in 2022, compared to 24 in 2021
December
An overview of the market at the end of 2022.
- House prices in December 2022 were reporting a year-over-year increase by 0.5%
- Houses sold for a median price of $337,200
- Houses for sale decreased by 24.5% (9,087 homes for sale in December 2022, 1,475 were newly listed homes which were also down, by 28.9%)
Single family homes
Number of sales was down by 20.10% (35,177 in 2022 compared to 44,027 in 2021)
New listings were down by 17.92% (40,944 in 2022 compared to 49,885 in 2021)
Average number of days on the market was down by 18.18% (36 in 2022 compared to 44 in 2021)
Condo-Townhouses
Number of sales was down by 16.84% (9982 in 2022 compared to 12,004 in 2021)
New listings were down by 17.76% (10.721 in 2022 compared to 13,036 in 2021)
Average number of days on the market were down by 23.91% (35 in 2022 compared to 46 in 2021)
Current Supply and Demand in the Connecticut Market
When there is a fine balance of supply and demand in the real estate market, there will be enough homes to purchase for every prospective buyer. However, the perfect balance is not always the case. With the COVID-19 pandemic, the state of the economy, and a plethora of other factors, a balance is not easy to strike. The supply of houses is often impacted by government policies, local development, labor and materials, while the demand can be impacted by buyer demographics, personal financial situations, and interest rates.
The rule of thumb is: when the buyers outweigh the number of houses for sale, the prices of properties will increase. When there are more homes for sale than prospective buyers, house prices will decrease.
With this in mind, here is the latest information on the Connecticut supply and demand.
- Sold properties decreased by 33.2%, 3350 sold in December 2022 (compared to 5,016 sold December 2021) with a median number of days on the market being 45 (down by 6 from the previous year)
- 46.2% of properties in December 2022 sold below the price listed, which is a 0.17 point decrease year-over-year. 13.2% of properties dropped their prices, which is an increase of 10% from December 2021. The sale-to-list price was 100.1%, which was down 0.13 points year-over-year. The decrease in the number of properties sold above the listing prices in Connecticut in December 2021, could indicate that the market is becoming less competitive.
Despite the statistics at the end of December 2022, January and February or 2023 are seeing an uptick in the demand for houses. However, the inventory continues to fall across the US as there are just not enough sellers.
The statistics across the US show that if houses are priced properly and according to their value, they will sell quickly. There is not a dramatic spike in homes for sale, and buyers are not panicked. This is a sign of market strength.
Top Growing Locations in Connecticut
- North Haven, CT23.9%
- Norwich, CT17.8%
- Watertown, CT17.2%
- Stratford, CT15.1%
- Naugatuck, CT
Top Competitive Cities in Connecticut
- Old Mystic, CT
- Southwood Acres, CT
- Danielson, CT
- Old Hill, CT
- Putnam, CT
Predictions for the Future of the Connecticut Housing Market – 2023 and Beyond
It is predicted that the state of the Connecticut housing market in 2023 will become more active. Consumer behavior is likely to shift, as more millennials are entering the market in recent years, with a boom expected in 2023. In addition to this, inflation and mortgage rates are expected to stabilize to a more anticipated level, which suggests a more active and balanced housing market in Connecticut may be on the horizon. With this shift, there will be more confidence in the housing market, and may even begin to push existing homeowners back into the market, to purchase second and third homes. If all goes well, this will help balance the supply and demand, as the market will see more available inventory.
An uptick in listed properties in recent weeks has sparked confidence that there will be the annual spike in Spring, which typically brings more inventory. This will help levels begin to return back to pre-pandemic levels. In addition, Realtor.com has named Hartford in their top market for 2023. This is great news for Connecticut, as Hartford is predicted to have one of its most active years yet.
