We All Thought COVID would Decimate the Connecticut Real Estate Market
Like most of the country, Connecticut has seen an unbelievable increase in real estate valuations for residential properties. At GLG Homes, we are continually watching the real estate market, but even more since COVID struck earlier in 2020. In particular, we have watched COVID and its effect on Connecticut real estate only as a benefit. There has not been a downside (in terms of the real estate economy) due to COVID.
Very Few (maybe a really savvy analyst or two) Saw this Coming
We have been watching a “seller’s” market for some time now. Largely due the lack of inventory of available housing for purchase that is well-maintained and/or updated. In the case of “flipped” houses, it’s usually a seller’s benefit. But only if the “flip” was well done. This year, 2020, has see something historic. Home values have sky-rocketed while inventory continued to struggle. Supply and demand is the age old discussion regarding the value of something, but in 2020 – largely due to COVID – the Connecticut real estate market has been overwhelmed.
NY is Moving to CT
Ask anyone in real estate that services the counties of Fairfield, New Haven, Litchfield and even parts of lower Hartford county. The influx of buyers from New York (Bronx, Brooklyn, and Queens in particular) has been exponentially higher than in previous reasons. Now, this shift is not new. New Yorkers have been moving out of the city for the last 5-6 years. NYC population has been shrinking for various reasons. The movement has largely been to New Jersey and the Fairfield county of Connecticut. But in 2020, due to COVID, there was a rush out of the city. And it is not slowing down.
Home Values Continue to Rise – for How Long?
With this shift, we have seen a push up in home values. Many, including us at GLG Homes, think this is going to taper and shift in October. Well, it is October and we’re not seeing that yet. So, if home sales slow down we might see a change in home values. At the very least, the median value may simply plateau. The Days on Market (DOM) continues to be well below seasonal and annual averages. But we did see sales slow down. While fewer homes were sold – they were still sold at a higher (than average) value and in less time (than average). Historically, things slow down coming into the November and December period. But, if COVID continues to be a pressure point and jobs continue to shift into the home – we (at least at GLG Homes) suspect that this market isn’t going to retract by much at all.
But we will continue to keep an eye and will always have a viewpoint.