The past two years have seen a rollercoaster of changes in the housing market nationally and here in Connecticut. Shrinking inventories of homes for sale meant multiple offers, bidding wars, sight-unseen property purchases and spiraling price increases in the residential real estate market throughout 2021. Home buying surged as New Yorkers fled to Connecticut to escape Covid lockdowns in tiny city apartments. Homeowners in Connecticut who suddenly found themselves working from home or home-schooling their kids sought out bigger homes. Experts had hoped for stabilization in real estate by early 2022, but the spread of a new Covid variant and supply chain issues everywhere have kept Connecticut’s available inventory of homes on the market to a two-month supply. Typically, a six-month supply is the norm in a healthy and balanced residential real estate market. We spoke with two local Realtors to get their take on what this year might bring in real estate sales.
Dana Flanagan
Dream Lifestyles by Dana Flanagan at EXP Realty
In terms of the real estate market 2022 is off to a great start! Many sellers are trying to get ahead of the competition and are preparing their properties for the market much sooner than in previous years. Those that have recently listed their properties for sale have received multiple offers and are already under contract. Buyer demand is still high and while interest rates are on the uptick, that doesn't appear to be holding them back. Buyers continue to show strength when making offers by waiving inspections, appraisal contingencies, or coming to the table with cash. Home prices have stabilized, and it's important that sellers understand this so they can maximize their return when selling and not appear overpriced to a buyer or a buyers agent, therefore diminishing their opportunity for a bidding war.
Dana Flanagan
Dream Lifestyles by Dana Flanagan at EXP Realty
860-796-0562
On Facebook: DreamLifestylesbyDanaFlanagan
Amy Rio
Executive Real Estate
The real estate market has continued to be aggressive with multiple bids on more updated homes, whereas older homes with fewer updates tend to sit on the market a bit longer. Prices are not increasing, they seem to be remaining stable from last year
I feel interest rates will rise back into the 4 percent range. If this happens there will be a large fall off of lower price-ranged buyers because many of them will no longer qualify for the same amount of mortgage and will find the inventory of available homes disappointing to choose from.
Thus begins the slow down of the market. If the lower end home sales start to trickle I think about a third of the buyers in the market are under $300,000. A mortgage rate increase of more than 1 percent will reduce their home spending budget by about $40,000. For example, if they can afford to spend $200,000 on a home at our current low interest rates, at a higher rate of about 4 percent their ability to buy will be more like $160,000. But the inventory of homes at that price point is not only hard to find, it also will likely be a “handyman special,” a home that will need a good deal of rehab.
Bank-owned homes have re-entered the market. They represented about 10 percent of our market share pre-Covid and they are slowly re-entering our territory again. This will help buyers that can afford to buy and remodel a home.
Overall, we will likely be very busy still in 2022 as we are still dealing with low inventory in the housing market. I think towards the fall of 2022, we’ll begin to see a change and more stability in the market, allowing buyers to successfully become homeowners.
Amy Rio
Executive Real Estate Group
17 School St.
860-916-6048
buyexecutive.com/amy-rio
