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Many of today's home buyers and sellers may not have directly experienced the last Connecticut housing bust almost a decade ago, or even realize we are still recovering. While the market is currently booming here in Connecticut, let’s take a look back at the turns and twists of the real estate market and where we stand today.
Way back in 2005, prices were headed up, lending was loose and easy, and buyers were fighting over houses!
Unfortunately our local MLS doesn’t show statistics before that time, and I only became a real estate agent in 2007, so I cant tell you exactly what happened just before 2005…but here is where our story begins….
Already on a continuous rapid rise for several prior years, median home sales prices in Connecticut continue to skyrocket and peak in 2007 at $272,000!
Within 2 years the worst of the fall out is over, but the bottom of the market is not truly reached here in CT until 2012, when the market bottoms out at a median sales price of $218,000 – a 20% drop total in the median sale price over a 5 year period:
The market then starts to slowly recover in 2012 as prices start inching upward again. By 2018 the median price climbs up to $239,000 – a 10% increase over the following 6 years! Unfortunately, this is still far below the peak pricing seen in 2007. (You may notice the small drop in 2019, however as of today, the year is still not quite halfway through, so it’s just too early to call 2019).
CT still has a long way to go to reach the sales prices we saw during the last housing boom! Will we ever get there? One would certainly assume so, but who knows how much longer it will take?
What about all the Connecticut short sales and foreclosures?
Short sales and sales of bank owned homes (REO) were not tracked in the MLS until 2009, so that’s where we begin!
Running right alongside that price meltdown, the short sales and foreclosures start in 2009 and quickly ramp up, taking center stage over the next few years!
The rate of these distress sales reaches 20% of the total market in Connecticut.
As the market starts to correct in 2012, the distress sales ease, and are currently hovering at about 12% of market share, as they have for the last few years. Short sales remain at about 2% of all sales and REO at 10%:
How did the different counties in Connecticut fare?
Fairfield, Middlesex, Tolland and Hartford Counties fared the best with distress sales at less than 15% of market share overall in the last decade. New London and Litchfield Counties followed with just under 20%. New Haven and Windham County broke the 20% mark, with Windham County at almost 25%!
That means that for solid ten years one in every four home sales in Windham County was that of a foreclosure or short sale! OUCH!
So what’s the takeaway in all this?
The crash was rough on Connecticut homeowners, some more than others. We are still not back on top, and it may take some time.
The good news is that anyone who bought a home within the last 6-7 years should be at a break-even point, or even gaining equity by now and can enjoy the fruits of buying at a low point in the market.
The bad news is that since CT has never truly recovered fully, there are still many homeowners – especially those who bough or refinanced in the mid to late 2000’s, who may still be in a negative equity position! For those folks selling is not an easy option and they face two options: Come to closing with cash for the short fall…or pursue a short sale.