Fall real estate market looming, is CT still a buyer destination?

A house listed for sale at $885,000 on Sport Hill Road in Easton, Conn. New listings continued to drop in August in Connecticut, but prices remain elevated amid continuing buyer demand.

A house listed for sale at $885,000 on Sport Hill Road in Easton, Conn. New listings continued to drop in August in Connecticut, but prices remain elevated amid continuing buyer demand.

Alexander Soule/Hearst Connectic

Connecticut closed out the traditional home-selling season with transactions down sharply from the 2021 season spurred by the COVID-19 pandemic as a result of insufficient numbers of fresh sellers to meet the demand of buyers who continue to block shop.

Between January and August, about 31,065 homes sold in Connecticut according to a monthly update from Berkshire Hathaway HomeServices New England Properties, about 6,000 fewer than the number sold over the first eight months of 2021. August sales were down 17 percent from a year earlier, the final month for families to move to get their kids into school systems in time the start of the academic year.

September has traditionally marked the start of an autumn lull in real estate. Last year was an exception, however, as apartment dwellers continued to beat the bushes in their eagerness to get out of the city.

The CEO of Berkshire Hathaway HomeServices New England Properties expects an active fall market, though not one to match last year when sales continued their momentum through November. 

"There are new buyers coming into the market," said Candace Adams, CEO of Berkshire Hathaway HomeServices New England Properties. "Some of them are families — a lot of first-time buyers coming in for the first time, renters.”

At $349,000 the price of the median home sold in Connecticut was up 7.4 percent from the median home in the first eight months of 2021, as calculated by Berkshire Hathaway. The median home sold in August alone went for $375,000, with more than 40 properties fetching such offers statewide from Stamford to Groton.

On Thursday, the mortgage guarantor Freddie Mac released data showing mortgage rates hit their highest level last week since 2008, at 5.89 percent more than double their level of a year ago. That same day, the chairman of the Federal Reserve served notice the Fed will stay on course in hiking rates in an effort to bring prices down by dampening loan demand.

"It is very much my view we need to act forthrightly, strongly, as we have been doing and we need to keep at it until the job is done," said Fed Chairman Jerome Powell, during an online forum sponsored by Cato Institute. "The longer inflation remains well above target, the greater the risk the public does begin to see higher inflation as the norm."

In a "shrinkflation" study last month of how inflation is impacting the housing market, Zillow tracked the purchasing power for home buyers spending at least $1 million, as reflected in the size of the houses they were getting. The Hartford area led the nation on that front, with buyers there getting nearly 4,900 square feet on average among homes costing roughly $1 million, give or take $50,000.

If rising interest rates and overall inflation are impacting the mortgage market, that has yet to show up in Connecticut's summer transaction numbers or prices, compared to the spring market. Adams said that is because buyers remain motivated for varying reasons and continue to check out new listings as they hit the market.

“They need a house, they’re in the market now," Adams said of buyers. "You can buy when interest rates are high, and refinance when they’re low. It all comes out in the wash.”

Alex.Soule@scni.com; @casoulman