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The Connecticut residential real estate market was marked by fierce competition in 2024 but the luxury market faced some challenges.
The median single-family sale price increased 9.9 percent to $412,000, according to data from The Warren Group, the publisher of Banker & Tradesman. Similar to its neighbors Massachusetts, the Nutmeg State’s prospective homebuyers spent another year faced with little inventory to chose from
“What we’re dealing with in our market is an exceedingly low availability of homes for people to buy,” Jason Mudd, managing partner of Cindy Raney & Team.
With a lack of homes on the market, competition has remained fierce for those looking to purchase a home.
“The whole market has remained very similar to what it has been,” Carl Lantz, 2024 CT Realtors president said. “Anything that’s priced right, even things that aren’t in good shape but are priced right, are still facing multiple offers, over-asking-prices and kind of a fight to a finish with many buyers forgoing contingencies, as people struggling to try and get cash.”
Homebuyers Getting Older, But Fewer Seniors Are Buying
The low inventory levels are also being affected by changes in Connecticut’s population. The U.S. Census Bureau estimates that the state has a population of 3,675,069, a 1.8 percent increase from 2020.
While the ages of home buyers reached all-time highs nationally with the median buyer being 56 years old, the most recent data from CT Realtors states that the average age of a homebuyer is 49 years old.
Lantz said, who’s also a Realtor with Coldwell Banker in West Hartford, he is noticing that fewer and fewer seniors are looking to buy homes. While Connecticut is above national averages when it comes to the 35-44 year old and 45-54 year old segments, the state is below national averages in the 55-64 year old and 65 to 74 year old demographics.
“The one segment of the market that statistically we’re not seeing a ton of is the older folks,” he said. “I feel like a lot of older folks are aging in place, and that is also a one of the contributing factors to low inventory.”
Another factor of the population growth in the state is migration from New York City. With increased ability for remote or hybrid work, more New Yorkers are looking to Connecticut to get more bang for their buck.
“Many of the buyers who are coming here are also coming from New York City,” said Mudd. “The percentage is definitely not what it was when it was at its peak, which was COVID. We were seeing in some markets, depending upon the quarter, upwards of 40 [percent], 45 percent of purchasers of a home in some of our towns was from New York City. I would say that number has dropped, but it hasn’t dropped to pre-COVID levels.”
During 2020, more people from New York moved to Connecticut than from any other state with 38,029 New Yorkers moving into the state according to CTData. Census data also shows that 28,181 New Yorkers came to Connecticut in 2023.
Beyond the relatively cheaper prices of homes, Connecticut’s schools and communities have added to the influx of people moving in. Once the state was forced to sell a Connecticut life to buyers; now it seems its price points and amenities sell themselves.
“I’ve had people move here because we have great schools, we have great communities,” Lantz said. “There’s lots of stuff to do, and I think people have realized why Connecticut was such a great place to live for all the years that it was super-hot.”
Luxury Market’s Troubles
The luxury market saw price growth as the median value of homes within the 65th to 95th percentile range by price increased from $495,842.15 in December of 2023 to $525,131.99 in 2024, according to Zillow data, a 5.9 percent increase.
But most luxury buyers are staying on the sidelines compared to lower price points, Mudd said.
“As you get upscale in the market, 3 million above starts to change the narrative a little bit,” he said. “There is certainly still less inventory, but there are also less buyers relative to the inventory so it’s not as competitive in that space. You’re not seeing bidding wars, generally speaking. You’ll get some, but you just don’t have the buyer pool.”
Mudd added that competition still remains when dealing with homes selling for one to $1.5 million.
Natural Disasters on the Mind
The year also saw signs a changing climate could put additional pressure on luxury properties.
Connecticut is coming off of a summer where it dealt with serious flooding that threatened properties well inland, far from the kinds of hurricane-driven coastal flooding that has been on everyone’s radar following 2012’s Hurricane Sandy.
Previously single-family homes were exempt from the coastal site plan review process, unless they are located next to specific shoreline features. In the wake of the 2024 floods, Gov. Ned Lamont proposed that exemption be removed and developments be subject to review in order to protect coastal features, as well as minimizing risks.
Mudd said he thinks state officials are smart to look into this issue.
“Some of these places are becoming uninsurable,” he said. “I think the government is smart to look at these things, because unfortunately, human nature is to sort of forget that these tragedies happen.”
Even if a homeowner can find an insurance company willing to issue them a policy, there is also the issue of cost. FEMA implemented a new National Flood Insurance Program pricing approach, called “Risk Rating 2.0,” in 2023 that gave Connecticut the third-highest “full actuarial rate” in the country for flood insurance behind Hawaii and West Virginia.
While beachfront properties might make seem like a property type that is mostly owned by wealthy individuals, some property owners have had the home passed down through family members.
“The cost of flood insurance has become astronomical,” said CT Realtors’ Lantz. “Many of those properties are not owned by super wealthy people. A lot of them have been family houses for years and years. I’m not saying that they’re not worth a lot. I’m just saying perhaps those people were not the multi-million dollar buyer.”
Instead of simply saying that homes can’t be built, he argued the state should instead require homes be built with flood-resilient feature.
But Mudd noted that for those who are wealthy, the flood risk is worth the reward of having a property by the water. For some, the cost of repairing or even replacing a home is something they are willing to accept.
“I think that there are still going to be enough people, especially wealthy people who say, ‘look, I’m going to take a chance because there are only so many homes that are available on water.’ There are enough wealthy people who can stomach the pain of losing a house, or stomach the pain of insurance,” Mudd said.
