Eastern Connecticut home prices skyrocket as time on market plummets
Reflecting nationwide trends, the housing market in eastern Connecticut changed dramatically from the first three months of 2020 to the beginning of this year, as the number of people looking to buy houses has surged.
The number of single-family home sales in New London and Windham counties increased 12.8% from the first quarter of last year to the first quarter of this year, according to data the Eastern Connecticut Association of Realtors released last week. The number of days that single-family homes spent on the market decreased by more than 43%.
"Things are just flying off the shelves," ECAR CEO Susy Hurlbert said.
ECAR uses data from SmartMLS, which shows that of the 968 single-family home sales in the first quarter of 2021, at least 68% of the sellers were moving elsewhere in Connecticut and at least 65% of buyers were coming from Connecticut. There were more buyers coming from Massachusetts, Rhode Island and New York than sellers going to those states.
Hurlbert said the median sale price of $266,000 is the highest she has seen for the first quarter over the past 20 years, though other quarters have been higher over the past two decades.
While the median sale price increased 18.2% from last year, the average went up 25.3%, indicating that more homes are being sold in the higher price range. Hurlbert said low interest rates mean people can buy homes that are bigger — and therefore higher priced.
Realtor Bonnie Nault, a Mystic resident who is president of the ECAR board of directors, said some of the more expensive sales are coming out of Groton Long Point, which had been "stagnant for a long time," and Stonington Borough.
She's even seeing multiple offers on homes selling for close to $1 million. In Stonington, she recently saw more than 20 offers on a property in the $350,000 to $400,000 range.
Nault said in a Monday morning meeting with other realtors from the William Pitt Sotheby's International office in Old Lyme, one person was shocked how many offers there were on a home right next to the highway, with a lot of noise.
She also recently closed on a piece of land in Ledyard that she had listed for more than a year.
"People are frustrated that they can't get what they want on the market with a house, so they're building," Nault said. The issue is that building costs are expensive at the moment: Fortune reported that the price of lumber is up 193% over last year.
The ECAR data show that the number of land sales increased from 53 the first quarter of last year to 112 this year, and from a total volume of $4.1 million to $14.4 million.
While lack of housing inventory is an issue now, Hurlbert noted that Lawrence Yun, chief economist for the National Association of Realtors, predicts there will be more inventory on the market later this year. Hurlbert attributes this to the lifting of eviction and foreclosure moratoriums.
She also said the number of realtors is increasing, as the weak job market has caused people who are unemployed to consider real estate.
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