House options in area are few

New listings fell in all but one of Hartford County’s 29 towns and cities in 2022

Greater Hartford’s home sale market recently drew attention nationally, topping realtor.com’s list of the hottest housing markets in the country, coming on top of similar designations stretching back to late 2020.

But the area’s market is so hot, it’s tough — and getting tougher — to even find a house.

The number of single-family houses for sale, or the inventory, at the end of last year is at a low not seen in decades. New listings throughout all of 2022 fell in all but one of Hartford County’s 29 towns and cities, the majority by double digits, according to an analysis of a report prepared for the Courant by SmartMLS, the statewide multiple listing service.

“It’s very, very difficult to get in,” Paula Fahy Ostop, a team leader at Marshall + Ostop @ William Raveis Real Estate in West Hartford. “It’s very frustrating for buyers because when they come into the market. If they’re coming from a larger metropolitan area, they’re excited about our home values and what they can get for their dollar. And then, they are absolutely shocked at how little inventory there is.”

As of Friday, there were 512 single-family houses listed in all of Hartford County, compared with perhaps a couple thousand in a more typical market.

“It’s absolutely mindboggling,” Ostop said.

Closed sales declined again last year compared with 2021 tied to the lack of buying options. But for properties that do sell, prices, on average, are going above asking and that was true for all towns and cities in Hartford County last year.

Across the county, the median sale price — where half the sales are above, half below — in 2022 was $315,000, up 8.7% compared with $289,900 a year earlier, SmartMLS reported.

Of the 29 towns and cities in the county, 17, or nearly 60% had a larger percentage increase than the overall county.

Hartford County also saw a greater year-over-year percentage increase than Connecticut as a whole. The state’s median sale price was $370,000, up 7.2% compared with $345,000 in 2021,

according to SmartMLS.

Cuts two ways

While rising home purchase prices is a positive, they can also cut two ways. On top of scant house options, rising prices coupled with higher mortgage rates can lock out firsttime homebuyers, especially those at the lower end of the income spectrum.

According to the Connecticut Housing Finance Authority, the median home sale price for first-time homebuyers seeking down payment assistance was $220,000 before 2021. Now, it’s closer to $250,000.

And monthly principle and interest payments have risen from $1,400 to $1,800, not including property taxes and insurance, CHFA said.

There are nagging worries — particularly in Connecticut — about big price run-ups in the late 1980s and again in the late 2000s were followed by plummeting prices. Indeed, Hartford County and the rest of Connecticut for that matter were struggling to recover from the last downturn more than a decade earlier until the onset of the COVID-19 pandemic touched off a buying frenzy in mid-2020.

But experts say they believe prices — and overall home values — will hold this time around.

There hasn’t been a flood of new single-family construction, hampered by pandemic-induced higher material costs, trouble getting windows, appliances and other critical components of a new home and labor shortages. There also are longstanding issues with land that is easily developed and tighter local zoning requirements — and more recently, rising mortgage rates.

A new report from Construction Coverage, a firm that advises the construction industry, showed that Hartford County’s overall housing inventory fell 22% between the three months ended September, 2022 and the same period an year earlier.

And there doesn’t appear, at least right now, that there will be waves of local job cuts that could lead to a flurry of listings hitting the market by homeowners who can’t make the mortgage.

Jeffrey P. Cohen, a professor of finance and real estate at the University of Connecticut in Storrs, said new data from the Federal Reserve Bank of Boston shows that today’s home sale prices, when adjusted for inflation — the general overall rise in prices — are generally not higher than they were in 1991.

Cohen also noted that price increases are evidence of Connecticut catching up in price recovery. That’s something that most parts of the country experienced sooner after the Great Recession of 2008 and 2009 but eluded Connecticut until the pandemic struck, Cohen said.

“There is still a backlog of people who want to buy and that is keeping prices high,” Cohen said. “And I think that is going to continue in the coming year.”

‘Throwing a pebble into a lake’

The pandemic boosted the Connecticut real estate market as New Yorkers fled the city for Connecticut and, at the same time, a huge chunk of Connecticut’s workforce was sent home to work. The change set off the need to find new homes that accommodated the needs, which many see as staying in place in the pandemic’s aftermath, either full- or part-time.

“In Covid, one of the exogenous shocks, if you will, was sort of like throwing a pebble into a lake and the ripple effects were felt initially and they continue to reverberate throughout the Connecticut economy,” Donald L. Klepper-Smith, an economist at DataCore Partners, said. “One of those ripples involves housing and, for many people and many families, 10-year plans were compressed into 2-year plans.”

As the inventory of single-family houses steadily contracted, many would-be sellers retreated to the sidelines to wait it out, worried that if they sold, they wouldn’t be able to find another house, further dampening new listings.

Raveis’ Ostop said she is seeing some modest signs of moderation among buyers. Multiple buyers for a single property are still common, but bidding wars involve fewer buyers, down from what could be dozens at the height of the pandemic. Offers are still going over asking but not as far above, Ostop said.

There also are fewer instances of waiving contingencies such as home inspections, Ostop said.

CHFA said it is seeing strong interest in its new “Time to Own” program that provides up to 20% down payment assistance and another 5% for closing costs. The $20 million program, rolled out in June, has helped finance 650 purchases so far, said Marcus Smith, director of research, marketing and outreach at CHFA. The program was allocated another $7 million in October and more funding is being sought, Smith said.

With the potential for a recession on the horizon — 70% of the member of the National Association of Business Economists expect one this year — that doesn’t mean housing can’t hold its own, Klepper-Smith said.

“Given what we have seen in Connecticut, with the supply and demand and the fundamentals in play, I think people are going to be surprised by how well the housing market is going to hold up,” Klepper-Smith said. “You’re probably going to see stability in prices.”

Here is a look at the top 10 towns and cities in Hartford County with the most single-family houses are now on the market as of Friday:

1. Bristol

Current active listings:74 Closed Sales ‘22: 669 Change from ‘21: -3.3% Median Sale Price ‘22:

$270,000 Change from ‘21 :8% Population: 60,218

Median Household Income: $67,507

Area (square miles) : 26

2. New Britain

Current active listings:

49 Closed Sales ‘22: 392 Change from ‘21: -21.8% Median Sale Price ‘22:

$231,500 Change from ‘21: 14.6% Population: 72,767

Median Household Income: $46,499

Area (square miles):13

3. West Hartford

Current Active Listings:

49 Closed Sales ‘22: 768 Change from ‘21: -13.6% Median Sale Price ‘22:

$400,000 Change from ‘21: 9.6% Population: 63,063

Median Household Income: $104,281

Area (square miles) :22

4. East Hartford

Current Active Listings: 49

Closed Sales ‘22: 472

Change from ‘21: -18.6% Median Sale Price ‘22:

$240,000 Change from ‘21: 11.6% Population: 50,272

Median Household Income: $55,967

Area (square miles) : 18

5. Hartford

Current Active Listings:

46 Closed Sales ‘22: 268 Change from ‘21: -6.3% Median Sale Price ‘22:

$217,000 Change from ‘21: 8.5% Population: 123,088

Median Household Income: $36,278

Area (square miles) : 17

6. Glastonbury

Current Active Listings:

38 Closed Sales ‘22: 347 Change from ‘21: -29.2% Median Sale Price ‘22:

$475,000 Change from ‘21: 11.8% Population: 34,564

Median Household Income: $120,837

Area (square miles) : 51

7. Manchester

Current Active Listings:

32 Closed Sales ‘22: 525 Change from ‘21: -20.7% Median Sale Price ‘22:

$265,000 Change from ‘21: 10.4% Population: 57,805

Median Household Income: $74,503

Area (square miles) : 27

8. Southington

Current Active Listings:

31 Closed Sales ‘22: 437 Change from ‘21: -28.9 Median Sale Price ‘22:

$375,000 Change from ‘21: -12.8 Population: 43,781

Median Household Income: $94,463

Area (square miles) : 36

9. Enfield

Current Active Listings: 30 Closed Sales ‘22: 476 Change from ‘21: -13.1% Median Sale Price ‘22:

$260,000 Change from ‘21: 9.6% Population: 44,143

Median Household Income: $79,730

Area (square miles) : 33

10. Suffield

Current Active Listings :28

Closed Sales ‘22: 166 Change from ‘21: -16.6% Median Sale Price ‘22:

$453,242 Change from ‘21: 16.5% Population: 15,688

Median Household Income: $114,208

Area (square miles) : 42