Southern Connecticut Real Estate Market Analysis – March 2024

Clients and Friends,

The following is the March 2024 Southern Connecticut Real Estate Market Analysis.  In preparing this report every month, I keep myself up to date on the market economics for all Southern Connecticut.  I have a financial background (MBA in finance), and I enjoy analyzing detailed financial data so I can maintain a good understanding of the market.  I then use this knowledge to help my clients (both buyers and sellers) understand the market and get them the best deal possible.

Single family home sales for March 2024 in Stamford, Greenwich, Darien, New Canaan, and Norwalk were 109 units vs. 81 in February, 146 in March 2023, and 191 in March 2022.  The best leading indicator for future sales is homes with accepted offers/under contract.  As of April 15^th, there were 86 homes with accepted offers/under contract, which is higher than last month (62) and last year (73), but much lower than 2022 (140).  Last month I noted that selling prices had declined slightly in both January and February versus the Q4 2023 average.  In March, average selling prices were higher than the Q4 2023 average for 4 of the 5 towns.  New Canaan average sales were a bit lower but that is based on only 8 sales and is probably not a true indication of the trend.   More importantly, the selling price per square foot in March was higher in all 5 towns vs. the Q4 average in 2023.  In both January and February, inventory increased versus the prior month.  However, total inventory declined in March, and this notably is the first time since I started keeping detailed statistics in 2011 that March inventory was lower than the prior month.  In March, there 191 new listings in the 5 towns vs. 266 last year. March/April is normally the time that inventories increase for the Spring market, so the March inventory trend is very disappointing, and reverses the trend I noted in January and February.  On an overall basis, the market continues to be a strong sellers’ market.  During March, 83% of the homes that sold were at, or above, the list price.  In January and February, 65 % and 72% of the homes sold above the list price in Stamford.  In November and December 2023, 66% of the homes sold at, or above the list price – so this trend seems to be getting stronger.  For comparison, back in 2020 (the last year before the decline in inventories), only 34% of homes sold at, or above the list price.

Stamford condo sales in March were 36 units vs. 40 last month, and 45 in March 2023.  In Stamford, 70 condos had accepted offers/under contract as of March 15th versus 65 in February, and 96 in March 2023.  As reported the last several months, condo sales have also been severely impacted by the lack of inventory.  Similar to single family homes, condo prices are holding firm.  During March, 70% of the condos that sold were at, or above, the list price.  During January and February, 65% and 60% of condos sold at, or above the list price. For November and December, 68% of the condos sold at, or above the list price.  It is clear that similar to single family homes, this trend seems to be getting stronger.  For comparison purposes, in 2020, only 23% of condos sold at, or above the list price.

Interest rates for conforming loans have increased over the last couple of weeks and are now in the low 7% range. I expect that interest rates will fluctuate between mid-6% and low 7% range over the next few months..  Even though inventories declined in March, I still believe inventories will increase modestly over the next 3 months.  Demand clearly remains very high, and (as I have been stating for months) I believe the lower interest rates will lead to higher selling prices UNLESS inventories increase significantly (which is highly doubtful).  The real estate market is driven by supply and demand, and high demand with low supply means higher prices.

The above-mentioned statistics clearly indicate to me that the sellers’ market is getting even stronger.  None of the key statistics show any kind of weakening in selling prices.  Home viewings are very strong.  I showed a home in Port Chester priced at $470,000, and the listing agent told me they had 147 showings schedule between Tuesday and Sunday last week.   That is a lot of competition.

The National Association of Realtors (NAR) has reached a settlement in the litigation of claims brought on behalf of home sellers related to broker commissions.  In the proposed settlement, which has not yet been approved by the Department of Justice or the courts, NAR would pay $418 million over 4 years to the home sellers as compensation.  Historically, commissions were paid by the seller, and the split between the buying and selling brokers was communicated to all parties by the various multiple listing services.  This practice will be discontinued, and both sellers and buyers may negotiate commissions separately. The agreement, if approved, is schedule to be implemented in mid-July.  There are lots of unanswered questions, but everyone should be aware of what is happening, and if approved in the current format, this could change who pays and how real estate brokers receive their fees.

If you have any questions regarding this report or are interested in buying and/or selling a home, please contact me anytime.  If there is anyone you know who is interested in buying or selling a home, I would very much appreciate you giving them my name or sending me their email address and I will contact them.

To view the detail report please click on the below link.  Additionally, if you would like detail information on any town in Connecticut let me know and I will provide it.

https://drive.google.com/file/d/16jUj2-OeeyWBbmPiPsFI_Ult2_O5LbDH/view?usp=sharing