The state of the CT housing market: Why is inventory so low?

The start of spring historically means the housing market heats up in Connecticut. However, for those looking, there’re not a lot of options out there.

“Right now, we're up about 5 percent from this time last year in terms of housing that is on the market. But if we go back to pre-COVID levels, were still like 65 to 70 percent under where we were prior to 2020,” said Wesley Krombel, a real estate broker with William Raveis Real Estate.

The state’s vacancy rate is also one of the lowest in the country, sitting at 7 percent. That’s according to draft findings from a study conducted by an outside consulting firm that looked at fair housing in Connecticut.

The company, Eco Northwest, suggested the state finds a way to add at least 110,000 more units to meet the need.

It’s creating a tricky situation for those looking for their first, or forever home.

“You’re almost going to find a house and pray to God that someone’s not already hounding it, or it’s not going to be a bidding war. But it’s most likely going to be,” said Joe Mauro, of Northford, who is looking to buy a bigger house in Connecticut.

But why are these trends continuing to persist across the state?

Krombel said a few factors are at play.

“They want to make a move, but they can't deal with taking on a higher rate or potentially a higher price than what they bought their house for. In the meantime, I think Connecticut has seen a lack of development really over the past 10, 15 years,” Krombel said.

Specifically, Krombel said Connecticut is lacking when it comes to single-family homes. It’s a recipe that keeps inventory low.

“One of the biggest things that I’m hearing from homeowners is just, ‘Look, even if I want to make the move, I don't know how it's possible. I need the funds from my house in order to buy the next house. And how am I going to do that if there’s very few homes on the market?’” Krombel said.

However, with a new season, comes new hope.

“Hopefully things warm up, weather-wise and with the inventory,” Mauro said.

And Krombel feels Connecticut could soon be turning a corner.

“I just want either buyers and or homeowners to stay optimistic and hopeful. I do believe that this year is going to start to get us out of a maybe not so positive trend,” Krombel said.

Other factors at play, Krombel said, include the long-standing impacts from “the COVID market,” which comes with quick turnarounds, inspections being waived, high- interest rates and multiple offers on homes.

“I would love for the state in some way to look at housing as how we can produce more housing, how we can incentivize more single-family builds or just housing in general,” Krombel said.