Connecticut Investors Walk Away From Weak Deals

Written by:

Rudi Davis

Date:

18 Feb 2026

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After years of momentum-driven buying, investor behavior in Connecticut’s residential real estate market has changed dramatically. Buyers who once purchased properties sight unseen are now walking away from deals that fail to meet financial criteria, according to Lynn LaForme, a realtor at Showcase Realty who specializes in multifamily properties in the Waterbury area.

During the pandemic boom, LaForme says, investors rushed to buy properties sight unseen, often skipping basic due diligence. “During COVID, you could have sold them the Brooklyn Bridge. I’m not even kidding. They were buying things without even looking at them,” she recalls. At the time, many believed property values would continue to rise, and rental demand would remain strong. This made almost any deal seem justified.

LaForme describes how investors would call about listings and immediately want to make offers, asking only for the price. The expectation was that any property would yield a profit, and buyers feared missing out if they didn’t act quickly. “Just calling me, like, how much is this? I want to put an offer,” LaForme says.

A Return to Financial Discipline

That era has ended. Today, investors are more cautious and focused on the numbers. LaForme explains that buyers now insist on seeing projected returns before moving forward. “They always want to see what the return on investment is. They want to see what the rents are bringing in, what the expenses are,” she says. If the math doesn’t work, they walk away.

This marks a return to fundamental investment analysis after a period driven by fear of missing out. Investors are now “choosier” and less willing to stretch for deals that do not make financial sense. “It’s not as crazy as it was,” LaForme says.

In secondary markets like Waterbury, this shift is especially pronounced. The difference between property prices and rental income is narrower than in larger cities, so disciplined analysis is essential. LaForme notes that a two-family property in Waterbury might sell for $430,000, while a similar property in Bridgeport could fetch nearly $700,000. However, rents do not rise in proportion to these price differences, so investors must carefully assess where returns are realistic.

Strength in Multifamily, but Not at Any Price

Despite this increased caution, multifamily properties in Waterbury have continued to experience strong demand and rising prices. “Multi-family and condos took a big jump in the last year,” LaForme says. “Multi-families, the prices are unbelievable.” She has listed a range of properties, from small two-family homes to large mixed-use buildings with dozens of units and storefronts. There is steady interest in mixed-use properties that combine residential and commercial space.

LaForme attributes some of this demand to New York investors, who are drawn to Waterbury by lower entry prices than in their home market. However, unlike during the pandemic, these buyers are now conducting thorough financial analysis before making offers. The days of buying on speculation alone are over.

Risk Assessment and the New Investor Mindset

For investors considering Connecticut’s residential markets, LaForme identifies neighborhood quality as the leading risk factor. “The risk is always the neighborhood. Some of them don’t care. Others want a certain type of tenant,” she says. While location remains a key concern, the most significant change is that investors are now actually running the numbers, a step many skipped during the boom years.

LaForme observes that investor sophistication varies widely. Some buyers are making disciplined, calculated decisions based on current rental income and expenses. Others may still be hoping for appreciation or higher rents that are unlikely to materialize. The market is sorting out which properties can justify their prices based on fundamentals, and which cannot.

Selective Capital and a Two-Tier Market

This increased selectivity is reshaping secondary markets like Waterbury. LaForme’s experience suggests that investment capital is becoming more discerning, creating a divide between properties that make financial sense and those that rely on optimistic projections. Properties with strong, verifiable returns continue to attract buyers, while those with weak fundamentals linger on the market.

The window for momentum-driven, speculative purchases has closed. “I think people are a little more cautious right now than they were,” LaForme says. Financial due diligence and clear-eyed analysis have replaced the urgency and risk-taking that defined the pandemic boom.

For secondary markets that have seen a surge in investor activity in recent years, this shift is likely to reduce transaction volume but may also bring greater stability. Capital is flowing into financially sound deals, making markets less vulnerable to panic selling if conditions change.

Looking ahead, agents and sellers in these markets should expect buyers to scrutinize deals more closely and recognize that only properties with real, measurable returns are likely to sell. Investors have returned to fundamentals, and the market rewards disciplined analysis.