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October 30, 2020

Berkshire CEO Adams: CT’s pandemic homebuying frenzy reflects desire for security

Photo | Pixabay
By Matt Pilon

Connecticut’s housing market was on fire during the final three months of the summer, with the number of sales and the median price up by double-digit percentages compared to a year ago.

The housing market began its ascent in June and July, with median prices ticking up by nearly 6% in the second quarter, as COVID-19 infections and hospitalizations subsided from their mid-April peak, but the relative boom was much more pronounced in the third quarter.

A total of 14,682 single family homes were sold during this year’s July-to-September quarter, an increase of nearly 32% year over year, and the median selling price of those homes jumped to $338,000, up by more than 19% from $283,500.

That’s according to a quarterly Connecticut market report from Berkshire Hathaway HomeServices New England Properties, Westchester Properties and New York Properties, which is one of the largest residential brokerages in Connecticut.

In an interview, BHHS NE CEO Candace Adams said that demand has soared due to New York residents relocating to be closer to their families or simply wanting to live in a less densely populated area. She said more Millennial renters are becoming first-time homebuyers, as they, too, seek the comfort a physical space can provide.

”What happened was this frenzy, this psychological factor took over and people wanted security and safety,” Adams said.

Record low interest rates have also been an important component, she added.

Every county in the state had more sales and higher prices in the third quarter.

Hartford County saw 3,120 single family home sales during the recent quarter, up 21% from 2,581 in the third quarter last year. The median selling price rose 14%, from $240,000 to $273,000, according to BHHS data.

Fairfield and Litchfield counties have seen the most prominent impacts from New York relocations but Adams said Greater Hartford is getting some of it too.

“There are people coming from New York City and landing in West Hartford or in Wethersfield,” she said. “The entire state is a beneficiary of migration out of New York, but it just lessens as you get deeper into the state,” she said.

Adams said some portion of the hot market in Hartford County and markets further to the east is a result of first-time homebuyers, who tend to target the further out “exurbs,” where there’s more space and prices aren’t as high. 

While the number of home sales has been rising, there is a ceiling, because supply remains constrained. That’s particularly true in Hartford County, which had just a 3.5-month supply of inventory as of September.  

As cold weather sets in, Adams doesn’t see demand letting up yet.

“We have stacks of buyers right now who can’t find properties and I don’t think they’ll just go away,” she said.

In addition, far fewer people are likely to be traveling during the holidays, which means those who are in the market will remain in the hunt.

“I think people are still going to be focused on securing housing for themselves, and that nesting instinct will continue,” she said.

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