Supply low, demand high for CT homes

The houses available for sale in Connecticut are dwindling.

The single-family market, which has seen jumps in sale prices and quick turnaround for new listings, is experiencing drops in sales year-over-year, according to November data.

Overall, the hot market saw an 18.2 percent increase in total sales from 2019 to 2021, according to a report from Berkshire Hathaway Home Services.

The number of sales started to drop in the latter part of the year, experts said. And 2022 is expected to see fewer sales than 2021, according to the report, which examined 150 Connecticut municipalities.

“The demand, it’s not being met by the number of homes coming to market,” said Candace Adams, chief executive officer at Berkshire Hathaway. “I think people are nesting, and they’re more out to be improving the property rather than selling it.”

There are some signs, including the housing market’s recovery after economic hits early in the pandemic, that the market will still be strong in 2022, the Berkshire Hathaway report says.

Adams said the state has about a two-month supply of houses available when it typically has closer to six months around this time of year. That number is used in real estate to measure how long it will take the available homes to sell.

Some regions, notably Greenwich, are seeing year-over-year decreases in sales.

The town had a 37 percent drop in the number of sales in November compared to last year. October looked much the same, with a 53 percent drop in sales from the previous year, according to information from Compass.

“In June, we started to see the number of new listings shrink,” said Mark Pruner, a real estate agent with Compass who works in Greenwich. “Then, as that happened, we started to see a very supply-constrained market.”

It’s likely because people who were interested in selling have already done so, and listings that had been on the market for months or even years were scooped up in the early 2021 rush to buy. That rush was fueled largely by people’s desire for extra space as they spent more time at home and migration from New York City for residents looking to live a more suburban lifestyle, experts said.

Pruner calls houses not yet listed for sale, but whose owners want to sell when prices go up, the “shadow inventory.” Pruner said that inventory has largely dried up in Greenwich, as well as much of Connecticut.

“Post-recession, prices dropped so people didn’t want to sell their houses at lower price points,” Pruner said, referring to the 2008 recession. “So they were waiting for it to come back on, then COVID hit and lots of people wanted to relocate to the suburbs and wanted to get out of multi-family housing.

“A lot of the people who had been waiting to list their house, did.”

The lack of inventory adds to a larger problem in Connecticut and nationwide: There’s a lack of housing supply, particularly that’s affordable to people with low incomes, experts and studies have shown.

The state has some of the oldest housing in the country. Price increases mean that it’s more difficult for people with lower incomes to afford a home.

In 2021, the Greenwich market saw spikes in sales of luxury houses — properties worth more than $2 million. As of Nov. 30, it had the most sales in the state at 980, according to a report from Berkshire Hathaway.

The next-highest sales numbers were in Waterbury with 954 sales, according to the Berkshire-Hathaway report.

The Berkshire-Hathaway report also noted that the average price of a house in Connecticut rose from $464,337 in 2020 to $539,473 this year.

Carol Christiansen, the outgoing president of the Connecticut Association of Realtors, said she anticipates the shortage will be a major issue in the industry in 2022.

“We really didn’t have that big drove of houses being put on the market,” she said.

She added that some agents may be short on work in coming months.

Adams said she’s hopeful that as the supply chain issues are sorted out, new construction will add needed inventory to the real estate market, which she expects to be strong in 2022.

“The only thing that would restrict it [the market] would be that lack of inventory,” Adams said. “I think that we’re all very eager to make sure that we tell sellers that this is the best time in the world to sell.”