Connecticut residential real estate market posts 2020 rebound

By Scott Benjamin

Although the initial optimism was temporarily thwarted through the early spring during the first stages of the pandemic, the Connecticut real estate market ended up having a banner year.

CT Realtors President Joanne Breen, who is based in Newington, said, “In January and February we thought it was going to be a good year. There was a lot of pent up demand and the other neighboring states had recovered more quickly from the Great Recession. Massachusetts and New York had much higher prices and we felt that with lower prices in Connecticut the market would come back to us.”

“When the pandemic hit, the buyers, the sellers and the real estate agents were uncertain about what was safe and responsible,” she said in a phone interview. “The second half of March, April and early May were sluggish.”

Breen remarked, “Gov. [Ned] Lamont was a big help because we were able to keep our offices open and the Department of Economic & Community Development provided effective guidance. Once the state started to gradually reopen its businesses the market broke right open.”

The most current year-to-date comparisons indicate average sales prices are up 19.9 percent compared to 2019. The median sales average has increased by 14.3 percent, pending sales are up 20.1 percent and closed sales by 15.8 percent.

The average sales price to date for 2020 in Connecticut is $401,492.

In July, The Wall Street Journal reported that people from New York City and Westchester County were moving to the wealthy Fairfield County Gold Coast and in December it stated that one realtor said the high-priced Greenwich market was the best its been in 20 years.

Explained Breen, “The pandemic and the work-at-home routines had people looking at Connecticut. It is not just Fairfield County. We’re seeing it in the border towns near Massachusetts and even some in the central part of Connecticut.”

“People began to re-evaluate where they lived as work-at-home became more available,” she added. “I think that is going to continue and we will see the spring market start right after New Year’s instead of in February.”

“People see that the Connecticut real estate market is affordable,” she said. “There hasn’t been the spike in prices that you have in the neighboring states.”

Patch.com reported a year ago that Dan Keune, who was then the president of CT Realtors, said that since 2010 residential real estate prices had increased 43 percent nationally but only eight-tenths of one percent in Connecticut.

Keune, who is based in Ellington, said the lack of appreciation in Connecticut homes had led to limited inventory, since few residents were moving to better homes.

Breen said, “With more demand, the lack of inventory has become a bigger issue. But the sellers have just started to see that their homes are appreciating and that maybe they can move into a better home if they sell their current home.”

She acknowledged that the economic impact from the pandemic has been “very detrimental” to the commercial real estate market, partly as a result of more businesses are trimming capital costs by having employees working from their homes.

Additionally, Breen said that “some of the lenders have been more stringent” on mortgages.

However, she said that by taking that step the lending institutions may avert some potential foreclosures.