Connecticut’s 2021 Real Estate Market Forecast
Despite the pandemic, Connecticut’s real estate market remained stable throughout 2020, even seeing a record high number of closings through November 2020. Some counties in the state even saw median home sale prices reach nearly 25.0%. If there’s any indicator to the current competition, fashion designer Tommy Hilfiger put his mansion on the market for $47.5 million, and it recently sold in November.
With this information in mind, what should Connecticut real estate agents prepare for in 2021?
2021 Connecticut Real Estate Outlook: Hot
Connecticut’s home and rent prices have both increased over the past year, which was not forecasted heading into 2020. The median home value in Connecticut increased 8.9% in 2020 and is forecasted to increase to 10.8% in 2021. Property values have hit historic highs and are much higher than homes nationwide. During the lull of housing activity in the spring of last year, experts predicted that the housing market would see a decline in home prices. Luckily, that predication failed to materialize, and the state’s housing market has experienced quite the opposite. Rental prices have also increased 5.9%, showing the growth the state is experiencing thanks to its new residents.
The Nutmeg State’s rate of homes with negative equity is one of the highest in the nation at 5.4%. While this figure seems alarming, the number of homes with negative equity is declining. Also, when looking at homeowner equity, home values in Connecticut increased by an average of $22,000. Clearly, there is demand for homes in the state, which will continue to help lower the negative equity rate as well as increase home values in 2021.
Delinquency rates in Connecticut were slightly above the national average, which is no cause for concern when considering this number has been decreasing month-over-month since the height of pandemic lockdowns and closures. If this trend continues, the state’s delinquency rate should remain well below 1.0% and won’t return to its previous high of 3.0% in 2008.
2020 Connecticut Real Estate Market Data
|Zillow Home Value Index||$281,924|
|1-Year Change on Home Values||+8.9.%|
|1-Year Change on Rent Prices||+5.9%|
|Homes With Negative Equity||5.4%|
|Delinquent on Mortgages||0.9%|
|Buyer’s or Seller’s Market||Seller’s|
Market Insights for Connecticut
Once the market began to heat up again heading into the summer of 2020, homebuying interest was fueled by the pandemic and low mortgage rates. This super-charged the underlying issue of a short housing supply that was struggling to meet consumer demand even before the pandemic. Now, interested buyers are finding the competition to be fierce in this seller’s market, leaving some scratching their heads as to whether they want to be active now or wait and see what the market does.
Connecticut is a great place to live, raise a family, work, and, of course, enjoy the outdoors. Residents enjoy their seaside state and its bountiful natural beauty. The state does have a higher-than-average cost of living, but that lends itself to higher standards of living and well-maintained common areas in communities. So, how does the Nutmeg State shake out in comparison with the rest of the nation?
- Third in healthcare
- Sixth in natural environment
- Seventh in crime and corrections
- Twelfth in education
Ranking in almost the top 15 of these key categories, Connecticut has plenty to offer prospective and current residents alike.
For the first time, homeowners have the opportunity to choose to work in a location that gives them the quality of life that they want. Connecticut, along with other seaside states, are seeing waves of new residents pour in from larger cities on the east coast. The big city exodus gaining momentum across the country is real, and areas outside of urban living are seeing a rise in demand. Connecticut real estate agents will need to be ready for a busy 2021 and prepare buyers for its ultra-competitive homebuying landscape.
Take On 2021 With the Best Connecticut Real Estate Courses From The CE Shop
Get prepared with The CE Shop’s Exam Prep Edge, a tailored online study experience that will help you ace the National portion of your licensing exam. Or keep going strong with one of our comprehensive, 100% online Continuing Education packages. Want to stay up to date on everything in Connecticut? Join the Mid-Atlantic Real Estate Facebook Group!