The Register Citizen (Torrington, CT)
CONNECTICUT SEES A DIP IN HOME SALES
Despite New York City renters continuing to pay more for new leases and renewals, higher mortgage rates appear to be dissuading many from hitting the eject button and buying in the suburbs — with historically low numbers of Connecticut homeowners testing the market by listing their properties for sale so far this year.
Just 1,900 Connecticut properties sold in February to push the total to nearly 4,200 in the first two months of the year, according to Berkshire Hathaway HomeServices New England Properties. For the first two months of this year, sales are down 30 percent compared to 2022, with new listings off 16 percent from a year ago.
For the first time in a year, the average selling price of a Connecticut home matched the listed price in the Berkshire Hathaway report which factors in prior price reductions, after an extended stretch of buyers offering extra in their “best and final” offers to seal deals. That is a sign of dampening demand among buyers, as they factor in escalating interest rates to their purchase calculations that are tacking on to the cost of a monthly mortgage.
The Mortgage Bankers Association reported a third-straight drop in weekly mortgage applications nationally at the tail end of February.
Speaking two weeks ago on a conference call, the CEO of Anywhere Real Estate noted the impact of higher mortgage rates not just on people actively looking to buy, but also potential sellers who are leery about having to get a mortgage themselves to fund the purchase of a new home after selling their current abode. Anywhere Real Estate owns Coldwell Banker which has a large brokerage base in Connecticut, as well as the Danbury-based relocation services provider Cartus.
“Looking back on 2022, it was a rapidly changing year for housing with substantial declines in the market that got worse every single quarter,” said Ryan Schneider, CEO of Anywhere Real Estate. “Higher mortgage rates continue to put pressure on affordability, and these higher mortgage rates are hurting this new supply of inventory as many homeowners are locked into their current home with low mortgage rates.”
Stamford led Connecticut with more than 135 sales transactions in the first two months of this year, about 85 fewer than during the start of 2022 for a nearly 40 percent decline.
With 120 sales, Waterbury edged Bridgeport by six transactions as the second busiest real estate market in Connecticut, but sales were down by roughly 30 percent in both cities.
Among the 10 Connecticut cities and towns to record more than 70 transactions, only two were able to stave off declines of 24 percent or more: Hamden and Milford where sales were off about 15 percent between the two communities.
In Connecticut, real estate brokers say houses are selling swiftly that are hitting the market at prices that are adjusted to reflect the higher interest rates buyers are having to pay to get mortgages.
But far few are coming onto the market this year. Among the top 10 Connecticut markets for transactions through February, only Waterbury and Norwalk had declines of less than 10 percent for newly listed properties compared to early 2022.
Greenwich dropped out of the 10 busiest markets statewide — barely — as sales there fell 37 percent to 70 transactions. In Darien, just five properties sold in February, after the affluent town kicked off the year with sales roughly in line with their totals of January 2022. Home sales in New Canaan were also well off their 2022 totals.
With all three towns benefiting from an influx of New York City residents during the COVID-19 pandemic, that trend did not sustain itself in the early going of 2023, despite pressure on renters there. In a monthly report of New York City’s rental market, Douglas Elliman Real Estate and Miller Samuel reported Brooklyn’s median rent up 17 percent from a year ago to $3,400 a month.
“We’re seeing activity expand a lot faster than we would normally expect seasonally,” said Jonathan Miller, president of Miller Samuel, as quoted by Investopedia. “That’s an indicator of the impact that rising mortgage rates are having on wouldbe homebuyers into the rental market.”
“Looking back on 2022, it was a rapidly changing year for housing with substantial declines in the market that got worse every single quarter. Higher mortgage rates continue to put pressure on affordability, and these higher mortgage rates are hurting this new supply of inventory as many homeowners are locked into their current home with low mortgage rates.” Ryan Schneider, CEO of Anywhere Real Estate