‘Waiting it out’ — as buyers knock in CT, sellers staying put

Less than 4,500 homes were listed for sale in May, the second lowest total of any month since June 2020 during the COVID-19 era. In that stretch, May listings trailed only December 2021, when Connecticut was putting a bow on a huge year in which buyers gobbled up much of available inventory by the time the holidays hit.

With nearly 415 house and condominium transactions through May, Stamford remains the most-sought destination in Connecticut, well out front of Waterbury which saw 365 homes change hands to date this year. That was slightly ahead of the pace in Bridgeport, Norwalk and Hamden, with the top dozen markets rounded out by Greenwich, Fairfield, Bristol, Stratford, Milford, West Hartford and Danbury.

While price reductions have been common this spring as buyers gauge higher interest rates and an uncertain economic outlook, when they spot value they are jumping back in with aggressive bids. Berkshire Hathaway reported that sales are being closed at prices 1.7 percent above final asking prices, down slightly from 2022 but still above years prior to the COVID-19 pandemic when buyers got out the chisel during final negotiations to chip away at the final price.

Through May, the price of Connecticut’s median home sold was $340,000, up 5 percent from its equivalent a year earlier. Neary 150 homes sold for that amount through May according to transactions reported by Zillow, ranging from a five-bedroom house with more than 5,000 square feet of space on Bristol’s Federal Hill, to a two-bedroom condo on Hope Street in Stamford with less than 1,000 square feet.

Not including Great Island, which Darien bought last month for $85 million to ward off developers, Connecticut’s top sale through May remains the Double H equestrian farm in Ridgefield, which sold in April for $24 million.

Paul Breunich, CEO of Stamford-based William Pitt Sotheby’s International Realty, said the year-over-year comparisons are being impacted both by historically low numbers of houses being put on the market, as well as a strong spring market last year that produced big sales numbers that this year has not matched.

The COVID-19 pandemic triggered a rush by many Connecticut homeowners to cash out at prices they could not have gotten in 2019 and before, but more people are staying put in their homes in 2023. And with only limited new construction in the offing, that is creating a historically tight spring market — which impacts any homesellers who might become buyers themselves, should they need a mortgage in any move. 

“Sixty-five percent of the people who have mortgages now have them at 4 percent or less,” Breunich told CT Insider. “And people are not comfortable with the economy. If interest rates go up to 7 percent, … that means they are going to lose a lot of purchasing power if they sell and they want to stick around here. So I think a lot of people are just waiting it out.”

During a conference call last month, the CEO of Coldwell Banker’s parent company Anywhere Real Estate referenced the same dynamic across its national territories. In addition to Coldwell Banker, the New Jersey-based company owns Sotheby’s International Realty and Century 21, as well as Cartus, the relocation services provider based in Danbury.

“We’ve seen a massive amount of pressure on housing results because of mortgage rates,” said Ryan Schneider, CEO of Anywhere Real Estate, speaking last month. “The fact that so many people have a low rate and are kind of locked into their homes and we’re getting so little inventory on the market, is even bigger than the affordability (problem) that comes with 6 percent to 7 percent mortgage rates.”

Of the 45 busiest Connecticut markets this year with at least 100 sales through May, only Southbury has seen an increase in activity — and only slightly, with Berkshire Hathaway logging one extra transaction from a year ago for 134 in all. And Southbury was very much an island unto itself, with sales off anywhere from 20 percent to 70 percent in surrounding Newtown, Oxford, Middlebury, Roxbury and Bridgewater. In the next concentric circle of 15 towns spanning New Haven, Fairfield and Litchfield counties, only Bethlehem saw sales increase.

Of cities and towns with 50 or more transactions, just three other locales registered gains besides Southbury, with Old Lyme sales up 10 percent, Windsor Locks up 6 percent and Madison 2 percent. And midway between Madison and Old Lyme, Westbrook leads all Connecticut municipalities with at least 10 transactions on the year, with Westbrook sales up more than 80 percent from January through May in 2022.

At the opposite end of that scale among larger cities and towns, Westport is generating the weakest comparisons to the 2022 market, with sales off 45 percent and average prices just above break-even from a year ago. Greenwich is among about 30 towns to see declines in both median and average prices through May, with Milford also on that list with slight declines.

Despite sales plunging 38 percent in Danbury, the city is still seeing median and average prices above their levels of a year ago, illustrating the disconnect between sales and pricing in much of the state.

“Two Saturdays ago, we had 140 open houses across all our territories and there was a lot of people showing up, there were multiple offers,” Breunich said. “The demand is still there — the inventory just continues to decrease.”

Includes prior reporting by Mollie Hersch.