Brown Harris Stevens
The third quarter brought some encouraging improvements in both the broader economy and the real estate market in Lower Fairfield County.
Starting with the economy, there were three pieces of positive news. Inflation in the U.S. fell to 2.5% year-over-year in August, down from 3.7% a year earlier. Mortgage rates also decreased, reaching an average of 6.09% for a 30-year fixed rate at the end of September—the lowest rate since late 2022. Consumer sentiment also showed a slight improvement.
The housing market, too, began to show gradual progress, hinting at a slow recovery from the constraints that have lingered since the pandemic. Perhaps most notably, inventory in September was up 4% from the same time a year ago, thanks in part to an uptick in new listings during the month—the first year-over-year increase in inventory since January 2020! Although this represents progress, inventory levels are still 76% below pre-pandemic September 2019.
“Admittedly, the improvement was modest, but after years of continuous decline in inventory numbers, it's a step in the right direction,” said Chris Halstead, Brown Harris Stevens' Senior Vice President and Managing Director of Sales in Connecticut.
The most recent sales activity also showed improvement, with the number of houses pending at the end of September up 8% year-over-year. The average time to contract for these pending sales dropped to just 63, an 11% decrease from last year.
“We saw low days on the market for closings as well, including an average of 47 days for condo closings, a record low,” said Brian Cleary, Connecticut Market Specialist for Brown Harris Stevens. “It all reflects the fast pace of our current market.”
Despite these gains, the total number of sales remained low in the quarter, primarily due to the continued inventory constraints. The 1,541 house and condo closings represented a 2% decline from a year ago. It was also the lowest 3rd-quarter total since 2012.
Buyer competition in the quarter remained high throughout the quarter. For closings, the average list-to-sale price ratio for houses was 103.4%, and for condos, 103.6%, the latter a record high. In all, 58% of closings sold over the asking price, with another 12% going right at the asking price. The competitive environment contributed to prices moving higher, with the median sale price for houses in the quarter rising 7% year-over-year to $1.27M, while the median condo price reached $490K, up 5%.
“Overall, these price increases are generally consistent with major home value indexes, including Zillow's, which had Fairfield County up 8.3% in August, year-over-year,” Cleary added.
While Lower Fairfield County remains in a very strong seller's market, the gains in inventory and pending sales are encouraging signs. However, it will take time to see how these trends develop moving forward.
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