Connecticut’s Housing Market Remains Strong Amid National Slowdown

Written by:

Steve Marcinuk

Date:

05 Jun 2025

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The real estate market in Connecticut is moving fast, and Jill Taylor is seeing it firsthand. “I just had two clients reach out to me this week about seeing a house, and one sold in 48 hours, and one sold in 24 hours,” says Taylor, Managing Director and Realtor at Jill Taylor Homes Team.

With nearly 20 years of experience and a recent ranking as the number eight REMAX agent in the state, Taylor brings a seasoned perspective to a local market that continues to defy broader national trends. While headlines across the country point to a slowdown, pockets like Connecticut are showing surprising resilience and sustained demand.

Connecticut’s Market Dynamics: Steady Despite Challenges

Connecticut has historically marched to its own rhythm in the real estate world. “Connecticut is a little different than some of the other states. We tend to be the last one to follow,” Taylor explains. “When places like California are going up in prices, we stagger behind. We follow a year or two later, and then same with the down.”

This delayed response to national trends has helped Connecticut maintain stability even as other markets fluctuate. While some regions across the country are experiencing price corrections, “Connecticut’s pretty much holding steady.”

The spring market is showing renewed vigor after a typical seasonal winter slowdown. Properties in desirable areas are moving quickly, with multiple offers becoming common again. “I just had two clients reach out to me this week about seeing a house, and one sold in 48 hours, and one sold in 24 hours,” Taylor notes. “While many properties have been on the market for about a week… it seems to be getting competitive again.”

The Inventory Crunch Driving Prices

Connecticut continues to struggle with historically low inventory levels. “There’s definitely very low inventory. So that’s what’s still driving prices up,” Taylor explains. This represents a stark contrast to the abundance of options available when she began her career. “I remember 20 years ago when I would take buyers out and say, ‘Here’s the top 300 houses that match your criteria. Let’s try to narrow it down.'”

A significant factor contributing to this inventory shortage is what economists call the “lock-in effect” – homeowners reluctant to sell because they’d lose their favorable mortgage rates. “The fact that the rates are higher than what they currently have is holding people back from selling in order to move,” Taylor confirms.

This hesitancy means that only those with compelling reasons are entering the market as sellers. “The only thing really getting people to move is they’re having another baby and outgrowing their house. There’s major motivation, or moving out of state, that sort of thing, or mom’s moving in with you,” Taylor says.

Geographic and Demographic Shifts

Working across all Connecticut counties gives Taylor unique insight into regional variations. “Certain counties are still hot, some are slow,” she notes, with Hartford County currently seeing more multiple-offer situations than other areas.

School quality remains a primary driver of demand. “The towns where the school rankings are a little bit higher, those tend to be more popular and getting more multiple offers,” Taylor explains.

The COVID-19 pandemic triggered significant migration patterns that continue to influence the market. “A few years ago, we had many New Yorkers, New Jersey people coming in during the COVID years. It’s nice and quiet up here. They wanted to get away from the city, so that drove up prices substantially over those years,” Taylor recalls.

More recently, she’s observed a different trend: “Now I’m seeing an exodus, not of those people, but Connecticut people moving to the Carolinas and Florida.” This outmigration is largely driven by Connecticut’s high cost of living, particularly for retirees. “It’s expensive when you’re trying to retire here,” Taylor notes.

The tax burden varies dramatically by location. “Some towns are affordable, like Shelton, Connecticut, the taxes are very low there. So you could get a $450,000 house for taxes that are around maybe $5,500,” Taylor explains. “I just showed that price in Hampden in New Haven County, and their taxes are going up over $12,000 on that house. So it’s almost double the taxes.”

First-Time Buyers Face Steep Challenges

The current market presents particular difficulties for younger, first-time homebuyers. “It’s not very young buyer friendly, this market,” Taylor states bluntly. “It’s expensive, so not just the taxes, but the monthly payment in general.”

With property values increasing approximately 4% annually over recent years, buyers face time pressure to enter the market. “When I’m helping a buyer make an offer, I’m telling them, ‘Okay, it’s on for $400,000 today. If you don’t get it today, a year from now, it’s going to be worth $416,000,'” Taylor explains. “The market’s increasing. So it motivates people to lock in on a house price before the market keeps going up.”

Competition remains fierce, forcing buyers to make significant concessions. “It’s challenging when you’ve got multiple offers, you’re waiving home inspections or covering an appraisal gap if under appraisal,” Taylor says. “Nobody’s doing closing costs credits for buyers in this market.”

This represents a dramatic shift from previous norms. “Years ago, almost every single one of my buyers, I was getting the sellers to pay their closing costs, they just had to come up with their down payment,” Taylor recalls. “Now, they’ve got the cash for the down payment. They’ve got the closing costs. They have to take on all the repairs on their own, because no one’s negotiating inspection items.”

The Rise of Cash and Family Support

One of the most notable trends Taylor has observed is the increasing prevalence of cash offers, often supported by family wealth. “I’ve seen many young people either getting gifts from mom and dad, or people with a trust that they’re tapping into,” she notes. “It’s interesting how, now that the market’s challenging, people are coming up with cash.”

Beyond family support, buyers are finding creative ways to present cash offers. “I’ve seen many people pulling out of 401Ks and finding cash some other way, or tapping into their equity,” Taylor says. Some are utilizing “Cash for Keys” programs that allow them to buy before selling their current home, though Taylor cautions, “There’s always fees for that kind of service… if it sounds too good to be true, there’s always a catch.”

The motivation is clear: “Cash has always been king, so not necessarily that you’re going to win an offer with cash, but it certainly helps. It’s less risk for the seller to take a cash offer,” Taylor explains. In a competitive environment with multiple offers, cash can provide a crucial edge.

Seller Expectations and Market Reality

While sellers generally maintain the advantage, the market has moderated somewhat from its pandemic peak. “A few years ago, I would list it on a Tuesday, start showings on Thursday. It was sold by Sunday. It was a guarantee,” Taylor recalls. “If there was a unicorn that didn’t sell, there was something really wrong with it.”

Today’s market shows more nuance. “It’s still a seller’s market, but it’s leveling a little bit,” Taylor observes. “Most properties are still selling within the first week or two. Some are doing price reductions and then selling after that first price reduction.”

Properties that linger on the market typically reflect unrealistic pricing. “Usually those sellers are just unrealistic,” Taylor states. “Your price always has to match your product. So whether it’s the realtor not judging the market properly and giving them the incorrect price to list it at, or the seller just saying, ‘Well, this is what Zillow says, and this is what I want, or this is what I need,’ and they’re just unrealistic.”

Looking Ahead: Stability with Caveats

Taylor anticipates continued stability in Connecticut’s real estate market, barring unexpected disruptions. “I don’t foresee things really changing that much. I don’t see it switching to a buyer’s market anytime soon, unless we have some other major global event, like another COVID,” she predicts.

A significant interest rate reduction could dramatically alter the landscape. “If there was even a week where the rates would come down to a crazy number, I think everybody would list their house,” Taylor suggests, which could potentially flood the market.

For investors, the current environment presents mixed opportunities. “It’s a little tough for investors right now and flippers, you’re not going to make a whole lot of money. You really need to be a contractor and not hiring contractors to flip for you,” Taylor advises. However, she sees continued value in long-term investment strategies: “In long term, holding, renting properties, it’s a good market for that.”