Luxury Lakefront Living: Connecticut's Candlewood Lake Market Evolution

Written by:

Steve Marcinuk

Date:

10 Jun 2025

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Luxury lakefront living in Connecticut experienced a major surge during the pandemic, and demand has yet to fully subside. Kevin Donovan, a licensed real estate broker with Compass who specializes in waterfront properties, saw this shift unfold in real time.

“When buyers could invest two million dollars for a property with a gorgeous backyard instead of spending the same amount on a condo where they felt confined during the pandemic, demand surged significantly,” he explains.

For over two decades, Donovan has focused almost exclusively on Connecticut’s vacation home market, particularly the pristine shorelines of Candlewood Lake. His deep expertise in this niche has given him a front-row seat to the evolving dynamics of luxury lakefront real estate, both during and after COVID-19.

The Pandemic Price Surge

While waterfront properties have always maintained their value even during broader market downturns, the pandemic transformed Candlewood Lake from a steady market into a red-hot one. “Vacation homes on Candlewood have always held their value. Even when it was hard to sell a home in Connecticut, pre-owned homes on the lake still sold well,” Donovan notes.

The market has experienced a substantial upward shift in pricing over the past four years. “It used to be the $750,000 to $1 million range were the bread and butter, and those have moved up to around $1.5 million, and the $1.2 million properties have moved up to $2 million,” Donovan explains. “So now the $1.2 to $2 million range represents the core market.”

This represents a dramatic 50-100% increase from pre-pandemic pricing levels in just a few years, fundamentally reshaping the market’s price structure.

Urban Professionals Seeking Accessible Escape

The appeal of Candlewood Lake is inextricably tied to its accessibility from major urban centers. “Mostly New York. We find that if you can get to Candlewood Lake within an hour and a half, that’s a lot of Northern New Jersey, Manhattan, Westchester County, or Fairfield County,” says Donovan.

This proximity has become even more valuable with the rise of remote work. “It almost becomes a commutable place, especially now that many professionals have flexible office schedules,” Donovan explains. “If you can select which days to work remotely and only need to be in the city occasionally, why not do it from the lake when the commute is just an hour and a half?”

The buyer demographic reflects this urban professional connection: “It’s a lot of entrepreneurs, people in finance, medical professionals, and corporate attorneys.” These high-earning professionals typically purchase their lakefront retreats with cash, even in today’s higher interest rate environment.

Personal Sanctuaries, Not Investment Properties

Unlike many vacation destinations where rental income is a primary consideration, Candlewood Lake properties serve a different purpose for their owners.

“Occasionally, I have clients who rent their homes when they’re not using them, perhaps during a month when they’re on a European vacation, to offset some of the tax costs,” Donovan explains. “But nobody’s operating a rental business with these lake homes.”

This preference for personal use highlights the emotional value these properties hold for their owners. Buyers view their lakefront homes as private retreats, places to escape, unwind, and create memories rather than income-generating investments.

The Two-Tier Market: Generational Holdings vs. Transient Ownership

The Candlewood Lake market has developed a fascinating dual structure that significantly impacts inventory and availability.

“Many people hold their homes generationally because the lake represents their childhood memories, so they keep it for the family,” Donovan explains. “That’s why many prime properties never come on the market, they’re kept in families for generations.”

In contrast, properties that do change hands often follow a different pattern: “Properties that have sold once tend to come back on the market again because they’re often purchased by professionals who are in New York for three or four years, and then their careers take them elsewhere.”

This creates two distinct property categories with different market behaviors: generational holdings that rarely become available, and properties with more frequent turnover tied to the career trajectories of urban professionals.

Recent Market Cooling

After years of extraordinary demand, Donovan has observed a recent shift. “In the past two to three weeks, I’ve experienced a significant change where more houses are coming on the market than we’ve seen in quite a while, and they’re not selling as quickly.”

This cooling trend represents a notable change from the frenzied pace of the past few years, potentially signaling a market adjustment after the pandemic-driven surge.

Location Trumps Everything

In the Candlewood Lake market, one factor consistently drives value regardless of broader market conditions: location.

“People want particular views and particular access,” Donovan explains. “The best condition homes still sell because you can renovate a house, but you can’t change the view. The view is immutable regardless of your budget.”

This creates a market where properties with premium locations command top dollar regardless of their condition. “A property with the best view on the entire lake will sell regardless of its condition,” Donovan notes, highlighting the primacy of location in waterfront real estate.

Tax Pressures Changing Community Dynamics

The dramatic price appreciation has created an unintended consequence for long-term owners. “Thirty years ago, taxes to get into the lake were modest. But now with the towns taking advantage of higher prices on the lake, it equals higher taxes on the lake,” Donovan observes.

These increasing tax burdens sometimes force long-term owners to sell properties they would have preferred to keep in the family, gradually changing the community makeup as properties transfer from long-term residents to newer, typically wealthier owners.

The Future of Candlewood Lake Real Estate

As the market continues to evolve, several factors will likely influence its trajectory. The recent cooling trend bears watching, though the fundamental appeal of lakefront living remains strong, particularly as remote work becomes a permanent feature of professional life.

For Kevin Donovan and his clients, the enduring appeal of Candlewood Lake transcends market fluctuations. Whether as a weekend escape, a summer retreat, or increasingly as a part-time residence for remote workers, these waterfront properties continue to represent a special combination of luxury, accessibility, and natural beauty that remains in high demand.