The Connecticut market is still a raging sellers market, but for how much longer? The repercussions of the states economic shut down loom ahead and it doesn't look promising!
CT HOME SALE PRICES ARE STILL SKY HIGH!
Connecticut home sale prices keep rising month after month! July 2020 sales prices were up 13% over July 2019 at an all time high median sale price of $298,868!
It would seem the spring market, which was disrupted by covid19 has simply picked up later than usual as market activity usually spikes March to May. Sellers should take advantage of this raging sellers market, as it is bound to head down soon...
WHAT'S UP AHEAD FOR THE CONNECTICUT MARKET?
More sellers will list their homes.
July was already a very heavy listing month, but there were plenty of buyers waiting to snap up those homes after months of tight inventory. Sellers that held back listing during lockdown months will continue to list now, and other sellers will be encouraged to list by the hot sellers market and huge recent price gains. Buyer demand will ultimately be met.
Foreclosures will resume.
Foreclosures have been suspended for many months and will resume in September. That means most of the distressed, lower priced inventory has been missing from market, and will be released to market at once. Options of lower priced inventory will dampen prices overall.
Forbearance repayments will become due.
Millions of mortgages are currently in forbearance, but eventually they must be repaid. Once these payments come due, how many homeowners will be prepared to repay, especially in this new weakened economy? Many who won't will also go into foreclosure and increase distressed inventory.
More landlords will sell.
Landlords who may not have received rent for months will finally be able to evict non paying tenants. Frustrated by the governor's decisions to allow tenants to miss payments with no recourse, many will choose to exit the landlording business, leading to increased inventory of multifamily homes.
Fewer buyers will be able to enter market.
The $600/week Federal Unemployment Stimulus payments have just ceased. Millions of jobs have been lost and businesses closed. Many will not recover financially, leaving fewer people to qualify for mortgages.
Mortgages rates will increase.
3% mortgage rates don't last forever. Ultimately rates will go up, causing mortgages to become more expensive and pricing out more buyers.
Many new homeowners will find themselves upside-down.
Bidding wars are standard nowadays, and winning bidders often pay way over market value. This is usually kept in check by appraisals, but appraisers have presented very few challenges to skyrocketing prices. Furthermore, due to Covid19, appraisers have been allowed to do appraisals from home and never even set foot on the property. Many of our newest homeowners will soon find themselves upside down on their mortgages from the day they set foot in their home.
More Nutmeggers will leave the state.
Connecticut's population has been declining for many years. Increasing taxation, cost of living and dissatisfaction with current leadership will lead even more to sell and leave the state for greener pastures.
How bad will it be FOR CT?
Only time will tell whether this leads to a simple softening or a full blown market crash, but one thing is certain - THE DAYS OF THE HOT SELLERS MARKET ARE NUMBERED!
Last Updated on July 30, 2021 by Minna Reid