Connecticut Housing Market Report - 2023 Update
What’s the Connecticut Housing Market Like?
Home prices in Connecticut have appreciated at about the same rate as the national average from last year. Looking back three years at the median price in October 2019 compared to October 2022, prices have increased 36.3% in Connecticut VS 35.8% nationwide.
As of October 2022, the median price for a home in the state was $340,600, which is up 4.9% above last year’s median price. Comparing prices over the last three years, we can see they have decreased -14.1% from the peak of $396,300 in Jul-2022.
Sales volume has also decreased recently. In October 2022, there were 3,760 homes sold in the state of Connecticut, a decrease of -14.7% from the previous month.
Comparing year-over-year, we saw a decrease of -26.8% sales from October 2021, when there were 5,140 home sales.
The number of sales peaked at 6,306 sales in Oct-2020; compared to October 2022’s numbers, we are down -40.4% in the number of homes sold from the height of sales activity of the last three years.
It is clear that the recent steep rise in mortgage rates has curved sales activity and shrunk affordability, and the result has been a drop in home prices in Connecticut.
How Does The Connecticut Housing Market Compare to the National Housing Market?
The Connecticut housing market is similar to other markets because supply and demand drive housing prices. Mortgage rates also impact Connecticut in a similar way as the rest of the nation.
Connecticut’s home prices and sales numbers have begun to slow down along with the rest of the country. Differences in the regional economy of some of Connecticut’s metro areas make those markets more vulnerable and others more resilient to the current economics.
The current median price of homes in Connecticut is $340,600 compared to the national median sales price of $397,549. Over the past three years, the median price of homes in Connecticut has increased by 36.3% compared to the national average of 35.7%
Connecticut Metro Areas With The Hottest Housing Markets
The state of Connecticut has seen significant growth in housing demand in recent years. Consequently, prices had also gone up at a good pace. There are some areas within the state that have outperformed others though. We will look at the cities with the highest increase in the median price year over year.
The top markets with the highest appreciation rate:
- New Britain
- North Haven
Darien in Fairfield County is a coastal town with a population of 21,499. Residents of this town commute to Manhattan with Norton Heights and Darien railroad stations. For outdoor recreation, the town features two public beaches, eleven parks, an exclusive Tokeneke beach club, and three country clubs. Similar to New York City, Darien has a humid continental climate with cold winters and moderate to scorching summers.
Darien’s home prices have been doing quite well over the last few years; in fact, Darien topped the list of cities in Connecticut with the largest increase in prices in 2022 with an increase of 26.4% from the prior year. For 2022, October’s median price was $2,300,000.
In October of 2022, there were 21 homes sold in Darien, down 0.0% from the same period in 2021.
The median days on the market in October 2022 was 45, which indicates a balanced market by today’s standards. Compared to October 2021, the median days on the market is the same compared to October 2022.
Norwich is a charming city on the eastern side of the state. It is known as the "Rose of New England" for its rolling hills and beauty that resemble rose petals. Its population was 40,125 as of the 2020 Census. When it comes to outdoor recreation, it has Mohegan Park with a beachfront, bicycling, hiking, and walking trails, as well as picnic tables and pavilions.
The Norwich Real Estate market is currently a somewhat competitive market. In October 2022, there were 46 homes sold with a median price of $227,500. The median home price in Norwich has increased 26.0% from October of 2021, while the number of homes sold was 46, a -32.4% decrease compared to the same month the year before.
The median days on the market in October 2022 was 33, and it’s down -25.0% compared to Sept 2021.
New Britain in Hartford County is home to Central Connecticut State University and Charter Oak State College. This city is also referred to as "New Britski: because of its large Polish population. According to the 2020 census, the population of the city is 74,135.
Outdoor enthusiasts can play a round of golf at the Stanley Golf Course or stroll around Walnut Park. In addition, New Britain is worth admiring for its Olmsted-designed park and the New Britain Museum of American Art.
New Britain is considered a somewhat competitive market right now. In October 2022, there were 58 homes sold with a median price of $227,500. The median price in New Britain was up 26.0% over October of 2021, while the number of homes sold was down -21.6% compared to the same period in 2021.
The median number of days on the market for October 2022 was 46 days which is down -2.1% from October of 2021.
One of the best areas to live in Connecticut is North Haven, which is located in New Haven County. With a population of 24,253, living in North Haven offers residents a sparse suburban feel.
This town is easily accessible to major highways and cities. Lots of natural treasures and well-known hiking trails can be found there. Moreover, it is less than 10 miles away from downtown New Haven and Yale University.
The real estate market in North Haven is considered somewhat competitive. There were 22 homes sold in Oct 2022, with a median price of $396,500 .The median price in North Haven increased 23.2% from Oct 2021, while the number of homes sold was down -35.3% compared to the same period last year.
The median number of days on the market for Oct 2022 were 30 days which is down -34.8% to the same month in 2021,
Meiden in New Haven county is 82 miles northeast of New York. Its population was 60,850 as of the 2020 census. The town offers various recreational opportunities, including Meriden Green, Hubbard Park, Hunter Golf Course, and annual events. Moreover, Meiden also has a number of parks, golf courses, and ski areas nearby.
Meriden is currently a somewhat competitive market. In Oct 2022, 54 homes were sold with a median price of $247,500. The median price in Meriden saw an increase of 20.7% over Oct 2021, while the number of sales was down -34.9% compared to the same month in 2021.
The median number of days on the market for Oct 2022 was 30, which is an increase of 20.7% compared to the same month last year.
Higher Mortgage Rates Could Slow Price Growth in Connecticut
How will interest rates affect the Connecticut housing market? We are already experiencing the impact of rising interest rates across the nation. Price growth in Connecticut has been flattening or on a slight decline for several months in 2022. However, Connecticut is such a high-demand destination that it may very well fare better than many other areas of the country.
As of mid-October 2022, the 30-year fixed rate mortgage is above 7% on average. That represents a 133% increase in mortgage rates in less than nine months. The Feds are on a “no holds barred” approach to curve inflation, and interest rate hikes have become the norm over the last several Fed meetings. Unfortunately, it seems that rate hikes are not done. We anticipate at least another rate increase before the year ends.
Key Market Stats for the Connecticut Housing Market:
As of the latest compiled housing report for October 2022.
|Current Value||Last Year||Change YOY|
|Median Sales Price||$340,600||$324,600||up by 4.9%|
|Number of sales||3,760||5,140||down by -26.8%|
|Median Days On The Market||43||49||down by -14.1%|
|Number of homes available||12,508||17,064||down by -26.7%|
|Months supply of inventory||2||2||no change|
|% of homes sold above list||49.8%||47.9%||up by 4.0%|
|% of home with price drops||23.1%||17.7%||up by 30.5%|
|New Listings||3656||4668||down by -21.7%|
Connecticut Historic price changes & affordability
The Connecticut housing market has seen moderate appreciation for years. The last three years have been favorable to homeowners as they saw their homes appreciate by 36.3% in 36 months.
The rise in home prices and mortgage rates has shrunk affordability to record lows in the state. A 36.3% spike in home prices and a sharp increase in mortgage rates in the last 12 months do not spell good news for the Connecticut Real Estate market.
We know that the average person’s wages do not increase by 36.3% in three years, so we can see why affordability is a problem. The gap between rising home prices and wages keeps getting wider.
- The housing market is shifting, and Connecticut housing market predictions for the short term seem to point to a declining market along with many areas of the US. Due to Connecticut’s moderate growth, the state overall should not have a significant home price correction.
The next 18 to 24 months will be an adjustment, especially for home sellers and Real Estate professionals. Adjusting to a normalized market that is not heavily skewed in favor of sellers will take time.
- Real Estate markets are highly local, and even within the same state, there will be areas projected to be hit hard by the market shift, and others will fare better.
- Timing the market for buying or selling is a big gamble. If it makes sense for you to buy, go ahead and buy a home. For sellers, if you have to sell in the next 12-24 months, you may want to consider doing it sooner than later, especially if you are in an area that may be considered overvalued and has a high potential for house prices to drop.