Connecticut Real Estate Market: Predictions for 2024

Connecticut homes continued to sell at eye-popping prices last month. The median home sale price rose 12.4% year-over-year from $378,200 to $336,330 in January.

The number of homes sold on the market declined by 6.2% YoY from 2,470 to 2,317 homes, with only 2 months of supply. Does the scarcity of houses make Connecticut a seller’s market? Let’s look at the facts.

Bridgeport homes sold for a median sale price of $367,250 in January, up 41.9% year-over-year. Homes in New Haven sold for a median sale price of $320,000, a 37.9% increase year-over-year. In fact, there were no markets in New Jersey where prices declined year-over-year.

Interest rates are at record highs, with few home buyers. But the inventory is so low that 50.5% of homes sold above the list price!

• If you are a home buyer: You can avoid bidding wars and avail seller concessions if you buy a home now. The 8.5% interest rate and mortgage payments are significant, but rates are unlikely to drop in the next few months. If they do, you can refi.
• If you are a home seller: You can lock in Connecticut’s high home prices. The scarcity of homes in CT makes it a seller’s market. Homes listed on MLS sell faster and for 17.5% more than off-MLS homes. That could be thousands of dollars in additional proceeds if you sell via Houzeo.

The current Connecticut real estate market statistics reflect the national trend of high demand and low supply. Despite the strong housing demand, home sales tanked. The property prices in Connecticut have increased regardless.

So, How is the Real Estate Market in Connecticut?

Sluggish! Home values in Connecticut rose by 53% in the last 5 years.

But, home sales decreased by 6.2% in January 2024 YoY. Maybe due to the mortgage rate climbing to a two-decade high of nearly 8%! The number of houses for sale in CT was 7,320 in the month, 15.1% less than in 2022. Connecticut’s housing market is bearish.

The decrease in home sales can be attributed to not having enough properties in the Constitution State. The months of supply is 2 month, which makes CT a seller’s market. So, if you want to sell a Connecticut property, now is the right time to list it on MLS.

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Connecticut Real Estate Market Statistics

• Average Home Prices: The average median home price in Connecticut is $378,200, up by 12.4% YoY. In 2024, the median sale price will keep increasing marginally due to CT’s tight inventory. The sale-to-list price ratio is at 101.3%, with a decrease of 1.5 pt YoY compared to January 2023.
• Home Sales: As per January 2024 data, home sales decreased by 6.2% YoY! In January 2024, only 2,317 homes were sold, down from 6.2% in January 2023.
• Average Rent Prices: Rental costs vary statewide. An average tenant in Hartford pays $1,474 while a person living in New Haven pays $2,130.
• Median Days on Market: The median days on the market for homes for sale was 46 days, down 7 days YoY.
• Pending Sales: The number of homes for sale declined by 15.1% YoY compared to 2023. Currently, there are 7,320 homes for sale in Connecticut.
• Months of Supply: The average month of supply is 2 month. CT’s demand can’t be satiated with the low supply. CT’s house scarcity is worse than the national housing market.

Connecticut Housing Market Predictions 2024

Connecticuters have survived the shockwaves of skyrocketing mortgage rates and rising home prices of 2023. Here’s what we predict for Connecticut’s housing market:

1. Home Sellers Will Return to the Market in 2024: Sellers who chose the sidelines in 2023 will come back. Especially those who can’t avoid new jobs or want to move to a cheap place. Whitney, the analyst who predicted the 2008 financial crisis accurately, has forecasted that baby boomers looking to downsize will also add up to 30 million housing units. Yowaza!
2. Mortgage Interest Rates Will Stabilize by the 2nd Half of 2024: Mortgage rates hit 7.79% in October 2023, the highest level in 23 years. However, the rate dropped to 7.35% in November due to the softening labor market and slowing economy. Even the annual inflation rate went from 3.7% to 3.2%. We think the rates will remain above 6%, but they will stabilize in the second half.
3. The Number of Home Buyers Will Rise: The historically high interest rates averted buyers in 2023. But mortgage demand rose after the interest rates lowered to 7.35% in November. The easing inflation and stabilizing rates will bring back house hunters.
4. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across Connecticut YoY, reaching $378K in January 2024. Experts predict home prices will continue to rise until the low supply-high demand dynamic changes.
5. New Home Constructions Sales Will Increase: 12.3% of homes purchased in September were new homes, the highest since 2022. Home builders offered $30,000 worth of concessions to attract buyers in 2023. We think builders and sellers will compete for buyers in 2024.
6. iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021. They offered 86% in 2022 and around 70% in 2023. Opendoor and Offerpad have lost billions of dollars in 2023. As they struggle to survive, they will make lowball offers.

Bonus Prediction: Buyer Broker Commissions Will Be Negotiable!

In a shocking turn of events, the jury in Missouri awarded more than $5 billion in damages to the Sitzer-Burnett plaintiffs. This motivated nationwide home sellers to file grievances against NAR’s Cooperative Compensation Rule.

NAR’s Cooperative Compensation Rule or Participation Rule states that listing brokers must offer competitive compensation to buyer agents if they want to list properties on a NAR-affiliated MLS.

Lawsuits like Moehrl, Gibson, Batton, Nosalek, and Batton 2 challenge the Participation Rule. They accuse NAR and other top real estate companies of colluding and conspiring to keep agent commissions high.

If the jury also finds the defendants guilty in these cases, buyer agent compensation may change. Buyer agents may become obsolete by 2025! Phew.

While buyer agents are unlikely to be obsolete in 2024, they may be open to negotiating commissions. That’s probably how they will still have some skin in the game.

When Will the Housing Market Crash in Connecticut?

Even though Americans are moving out of the Constitution State, a housing market crash in Connecticut is unlikely.

Connecticut is famous for its manufacturing industry, especially aerospace and shipbuilding. Over 10.9% of Connecticut’s economic output comes from its manufacturing sector, which also provides jobs for nearly 9.7% of the state’s workforce. With an unemployment rate of just 3.5% as of December 2023, Connecticut boasts a thriving job market.

Connecticut boasts a population density of approximately 746.7 people per square mile, ranking it as the fourth most densely populated state in the US. The average cost of living is $28,680 median household income is $4675, making it an enticing destination for homebuyers.

The state has a population of ~3.6 million. A consistent population growth rate of 0.1% in 2023, coupled with its natural diversity, creates a solid foundation for continued housing demand. So, it is unlikely that Connecticut’s housing market will crash anytime soon.

2024: Is it a Buyer’s or Seller’s Market?

2024 will be a terrific market for sellers. (And buyers, too!)

Home prices in Connecticut are rising and will continue to rise till the supply-demand dynamic changes. The number of houses for sale in CT was 7,320 in January 2024. There is very limited inventory to satiate the demand from house hunters. This also makes it the best time to sell a house in Connecticut.

After the mortgage rate plummeted from a two-decade-high rate of 8% to 7.28% in January, new listings rose. This shows that those who refused to sell due to mortgage rate lock are finally acclimatizing to 7% rates. In the coming Spring of 2024, more homeowners will follow suit and list properties on Connecticut MLS.

As home listings in Connecticut increase, home shoppers hugging the sidelines will also return. The recent uptick in mortgage applications shows that buyers are returning.

House hunters who could not find affordable homes in 2023 will also start shopping in 2024. The demand for Connecticut houses will increase – and that’s why sellers may be able to dominate the market.

However, new builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023! Builders will continue offering concessions in 2024, and home sellers may have to wage wars against them.

Listings of new constructions, baby boomers looking to downsize, and desperate home sellers will flood the market in 2024. The properties for sale in Connecticut will increase. So, whether you are looking for a condo in Middletown or seeking to live in a co-op, you will find your dream home next spring.

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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.

Frequently Asked Questions about Connecticut Real Estate Market

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Connecticut Real Estate Market