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Could Connecticut emerge from the COVID-19 pandemic stronger? That could be one effect of the hyper-busy spring-turned-summer real estate market, senior real estate figures hope.

“The one thing I’m really hopeful about is the mass exodus [from New York City] we’ve been waiting on for several years,” said Connecticut Association of Realtors 2020 President Joanne Breen. “I’ve always thought CT has a lot to offer.”

As the pandemic’s first wave released its grip on New York City, buyers made a beeline for the metro area’s suburbs, helping drive prices and inventory down in Litchfield and Fairfield counties. Both regions saw the biggest year-over-year increases in median single-family sale price in the entire state – 14 percent as of Aug. 31 – according to The Warren Group, publisher of The Commercial Record, with the Windham County shoreline following close behind. All three led the state by growth in year-to-date sales tallies as of Aug. 31, with Litchfield and Windham seeing 9 percent jumps and Fairfield a 6 percent increase.

High-End and Low-End

“The people who were already teetering on living out of the city, this [pandemic] solidified their decision,” said Stamford-based Halstead Realtor Tammy Felenstein. “Imagine a family with two kids living in an apartment with 800 square feet. They can buy something with four bedrooms and a yard for the same price out here.”

On the high end of the market, well-heeled New Yorkers looking to buy their way out of proximity to the pandemic in the near term and buy into a more relaxed home in the long term also helped soak up long-standing gluts of inventory in places like New Canaan and Greenwich’s backcountry.

“Some houses that had literally been on the market for 3-4 years,” Felenstein said. “Suddenly when COVID hit and people realized they could work remotely, and [that] this might be a trend that would continue.”

While the year-to-date median sale price in Fairfield County hit $512,500 in August, drawn up in part by big sales in Greenwich and other high-end towns, the most intense activity has been seen among the area’s moderately-priced homes. There, bidding wars have been common, even drawing in investors at the lowest end of the market who are looking to capitalize on price increases by fixing and flipping properties in need of a makeover. Felenstein recently sold one house in Stamford that went on the market for $399,000 and despite needing “a lot of work,” it had drawn 15 offers in three days.

Pent-Up Demand

Greater Hartford saw similar trends with demand – as measured by year-over-year growth in year-to-date median sale price – strongest in Burlington (22 percent jump), East Windsor (17 percent growth) and Hartford (tied with Berlin at 13 percent increases each). With median single-family sale prices of $352,500, $249,900 and $158,600 through Aug. 31 they represent different slices of the Greater Hartford market, whose median single-family sale price of $245,000 has risen 7 percent year-over-year.

“We’ve seen a lot of move-up buyers,” said Breen, who is also a co-owner of ERA Sargis-Breen in Newington. “A lot of people have been waiting – you could see it. I could see it in January and February before this hit. Connecticut was finally starting to come out of the recession.”

The effect of this pent-up demand can be seen in the speed with which homes have sold. Zillow data for September shows the median in the Greater Hartford market went under agreement within eight days. At the higher end that figure was 17 days for homes priced between $321,666 and $450,000, and 18 for homes above that. But homes between $257,906 and $321,666 sold in six days, with homes below $257,906 selling in seven.

Buyers Adapt to New Reality

Many white-collar homebuyers are betting that their jobs will continue to let them work from home for a significant period of time after the pandemic ends, she said. As a result, many buyers’ burning desire for a home near a MetroNorth train station or near a neighborhood activity node and its restaurants and shops faded a bit this summer. The premium now, she said, was on comfort.

“This is going to be a huge culture shift. When this is over, companies are going to realize they can continue to keep doing this” or at least reduce the time each worker spends in the office, she said.

Pools – typically high-maintenance items and a turn-off for buyers – were at a premium in both the Hartford area and Fairfield County, Breen and Felenstein said, underscoring just how much the pandemic had scrambled decade-old trends.

“The home has become a place where you have to work, where you have to school your children, where you have to have entertainment opportunities in your own yard,” Breen said.

Can It Continue?

A big question hovers over this summer’s relentless buyer demand: How long will it last?

While the pandemic and record-low mortgage interest rates may have sharpened the minds of buyers already preparing to move, it also struck at an opportune time for the real estate market.

America is in a “mini Baby Boom,” said senior Zillow economist Jeff Tucker, with 5 million more people of prime first-time homebuying age – their early 30s – than a decade ago.

“That’s something we’re at the beginning of,” he said, noting pressures on home prices will only increase if the pandemic encourages more Baby Boomers to shy away from selling their homes and moving into assisted living facilities at the same pace previous generations did.

Price run-ups will likely last until more potential sellers realize the dramatic increases happening, he said. A recent Fannie Mae survey showed it took sellers until the end of the summer to realize the market had definitively turned to their advantage, months after record numbers of buyers flooded onto the scene.

But economic concerns and the future course of the pandemic could also play a role: a recent Zillow survey showed 31 percent of potential sellers were holding off due to uncertainty about their or their spouse’s jobs and 25 percent were doing so for health concerns.

For her money, Felenstein said she’s betting on a quieter winter as the holidays create a natural pause in activity and increasing coronavirus cases in Connecticut create either more health worries or government restrictions. That would leave a glut of unfulfilled aspiring buyers ready to jump back into house-hunting in the spring, she said.

Breen said she’s optimistic the inability to travel far this holiday season and the Federal Reserve’s promise of low interest rates through 2022 or 2023 could prevent any slowdown in demand.

Either way, both are optimistic the state could be on its way to a revival as New Yorkers bringing more spending to local businesses.

“We’re sitting pretty,” Felenstein said. “With all of these people coming to Connecticut, they’re all taxpayers, they all eat at restaurants. They all buy goods and services and contribute to our local economy. Connecticut is poised for a comeback.”