Housing markets across the country may be slumping, but across Connecticut, indicators suggest demand is still stronger than the pre-pandemic baseline, even if it is waning.
Nationwide, 60.8 percent of the home offers written by Redfin agents faced competition in May, the combination brokerage and listing portal reported this morning. That figure is down from 67.8 percent in April of this year and 71.8 percent in May 2021. The shift came as mortgage rates jumped to levels not seen in over a decade, trimming buyers’ budgets dramatically and knocking some out of the market altogether.
“The [national] housing market isn’t crashing, but it is experiencing a hangover as it comes down from an unsustainable high,” Redfin deputy chief economist Taylor Marr said in a statement issued Thursday. “Housing demand has already cooled significantly to the point that the industry has begun facing layoffs. This week’s rate hikes will further stretch homebuyers’ budgets to the point that many more may be priced out. While a lot of home sellers are already dropping their prices, more homeowners will likely decide to stay put now that the mortgage rate on a new home is significantly higher than their current one.”
Redfin did not report competition statistics for any Connecticut metro areas, but did publish a different set of data this week, covering price drops and days on market, which suggests the state’s major housing markets remain competitive.
Price drops are typically a sign that a seller has overpriced their home relative to buyer demand, and before the pandemic would usually rise throughout the year as homes unsold during the spring market sought to attract new buyers during the less-intense fall market. Generally, the higher the share of homes with price drops, the lower the buyer demand in a market.
In the greater New Haven area, only 3.2 percent of listings had a price drop for the four weeks ending June 12, Redfin said, compared to 1.5 percent for the month of March and 4.2 percent for the four weeks ending June 16, 2019.
In Greater Hartford, 3.3 percent of listings had price drops for the four weeks ending June 12, versus 2 percent for the month of March and 4.5 percent for the four weeks ending June 16, 2019.
In Fairfield County, 3.7 percent of listings had price drops in the last four weeks. That’s up from 1.5 percent in March and down from the 4.6 percent share of listings that saw price drops in the four weeks ending May 16, 2019.
Across all metro areas Redfin tracks, however, the share of homes with price drops soared to 5.6 percent for the four weeks ending June 12, outpacing 2019 already in mid-May. Only 4.1 percent of listings in all the metros Redfin tracks nationwide had price drops for the four weeks ending May 16, 2019.
Meanwhile, the share of homes that went under contract within two weeks of being listed remains at multi-year highs in all three major Connecticut markets for the four weeks ending June 12: 49.1 percent in Greater Hartford, 37.5 percent in the New Haven area and 25.7 percent in Fairfield County.
While Fairfield County saw this statistic drop from a yearly high of 32.5 percent in late March and early April, the Hartford and New Haven regions have seen much smaller declines. The former hit a yearly high of 53.7 percent while the latter hit its yearly high of 43.1 percent, both in late March and early April.