As stated last month in Anthony’s Predictions for 2025, “2024 will go down in history as the bottom of this down cycle.” Though we did see year over year increases in all categories, they were nominal where we prefer to see larger numbers.
Overall, the 2024 Connecticut real estate market demonstrated rising prices and a slight decrease in sales due to extremely constrained inventory. Sales didn’t decline due to lack of demand, but due to lack of supply.
Many homeowners were reluctant to put their properties on the market due to the attractive low mortgage rates secured before the pandemic. However, market activity picked up, fueled by life changes and necessity, emphasizing the importance of competitive pricing. Buyers faced challenges with affordability due to rising interest rates, inflation, and increasing home prices, yet they remained steadfast and determined. The market favored sellers in the beginning of the year but shifted toward buyers with a burst of activity later in the year, and a rebound is expected in 2025. Despite higher costs, homeownership retained its appeal, offering benefits such as fixed payments, equity growth, and potential tax advantages, underscoring its long-term value compared to renting.
This report breaks down sales, average prices, the number of active listings, and how many listings went under contract for 2024 compared to 2023 and discusses what is predicted to unfold in 2024.
Sales Decline by 1.7%
Sales in Connecticut decreased in 2024 by 1.7% moving from 34,165 for both single families and condos combined in 2023 to 33,576 in 2024. Across the country, buyers are gradually adapting to current interest rates, with significant improvements in affordability unlikely in the near future. Those navigating life changes moved forward with purchases, while many previously hesitant buyers, weary of waiting for a market shift, chose to act. In Connecticut, limited inventory and rising prices created additional hurdles for buyers, making it harder to find suitable properties and contributing to a decline in sales.
Sales were down in both categories:
- Single family sales decreased, though not significantly, by 1.5%: 26,006 in 2024 from 26,397 in 2023
- Condo sales decreased 2.5%: 7,570 in 2024 from 7,768 in 2023
Below is a graph that illustrates home sales per year since 2000. After a few years of steep declines, 2024’s decrease was very slight over 2023 indicating a potential shift in a more positive direction for 2025.
Monthly sales in Connecticut battled, and half of the time sales were down and half they were up. The monthly increases didn’t outweigh the months that decreased, leaving sales for the year down slightly.
Average Prices Increase by 8.6%
Prices in 2024 increased over 2023 by $43,903 with 2024 at $556,424 compared to $512,521 in 2023. Prices persistently rise despite affordability challenges, as low inventory intensifies competition among motivated buyers, often leading to bidding wars and higher sale prices.
Prices increased in both categories:
- Single family prices increased by 8.6%: $607,755 in 2024 from $559,693 in 2023
- Condo prices increased by 9.3%: $351,468 in 2024 from $321,488 in 2023
The bar chart below illustrates that 2024 marked the highest average home prices since 2000—and the highest ever recorded. With inventory remaining limited and buyers vying for available properties, prices are expected to remain stable, though their rate of increase may slow in 2025 if inventory rises.
In 2024, monthly prices consistently surpassed those of 2023. The dramatic growth since the Covid era becomes clear when comparing the 2020 green line to the 2024 purple line, emphasizing the notable rise in prices over time.
Average prices increased across all Connecticut counties in 2024, with gains ranging from 6.3% to 14.5%. This highlights widespread demand, extending beyond coastal and urban areas. Notably, the significant growth in every county suggests a trend of people moving further from city centers.
2024 Listings Rise for the First Time in Two Years
Connecticut has experienced a steady decline in listings since 2015. However, after two years of significant drops, including 2023’s record low since 2010, 2024 saw a 2.9% increase in new listings. Many sellers had been hesitant to part with their pandemic-era low mortgage rates, keeping inventory tight and limiting buyer options. As circumstances evolved, more sellers chose to move forward, contributing to a noticeable rise in listings. Despite this improvement, the 40,000 homes listed in 2024 remain well below the long-standing annual norm of 60,000 to 70,000. This upward trend suggests that 2025 could bring increased inventory and more choices for buyers.
Pending Sales Decreased by 1.1%
2024 ended with the lowest number of pending sales since 2011 due to lack of supply, not demand. The lack of supply made it challenging for buyers to find the homes they needed and so 2024 closed out with 33,715 pending sales from 34,094 the previous year.
Connecticut Housing Inventory is Still Anemic
Connecticut’s inventory has been on the decline since 2017 according to the graph below. 2024 was the first year that available homes on the market didn’t show significant declines from the year before as it was neck and neck with 2023. Still, the level of inventory now contrasts strikingly when compared to pre-2020 inventory levels, which typically ranged between 16,000 -23,000 homes. In contrast, recent years have seen drastically lower levels, with inventory dropping as low as roughly 4,800 in December of 2024.
Will the 2025 Real Estate Market Improve?
In 2025, Connecticut’s real estate market is expected to see relative stability. The National Association of REALTORS® predicts a nationwide 2% rise in home prices, but Connecticut’s prices may rise more due to high demand and low supply.
While stabilizing mortgage rates, likely around 6% could offer some relief for buyers, inventory is still expected to remain very tight. This will continue to make the market challenging for buyers, especially those who have already struggled with fierce competition. Buyers will need to be proactive, prepared to act quickly when they find the right property.
Affordability challenges are likely to persist, driven by Connecticut’s historically high property values and high cost of living. The rental market will also remain expensive, as demand continues to outpace supply, offering little relief for renters. For sellers, the market will remain strong but more balanced, requiring realistic pricing to attract buyers in a slightly less competitive environment.
Overall, while the Connecticut housing market is expected to stabilize, the tight inventory will still create challenges, and the pace of growth will be more sustainable but less favorable for buyers seeking affordable options. As Anthony stated in his 2025 Predictions, “I believe 2025 will mark the beginning of this recovery, with 2026 poised to be a historic year for the industry as sales normalize.”