You Ask, We Answer: Is Housing Demand Going to Slow Down Soon?
It seems that for the past several years, housing demand in Connecticut has been a hot topic of conversation. Whether you’ve bought a house, sold one, or have just been curious about where the housing market stands–and where it’s headed–Calcagni Real Estate has pertinent information to share with you. Read on for more of what our President and Broker, Antonio Liguori recently shared with CT Builder Magazine.
The Connecticut housing market is still going strong
Though there have been rumblings of a real estate slow down, here in Connecticut, that’s just not the case. In fact, due to low inventory and a still-high demand for housing throughout the state, Liguori expects the Connecticut housing market to continue its strong streak for the remainder of the year.
Liguori explains to CT Builder Magazine, “While the media may portray ‘concerns’ by sensationalizing rising interest rates, the truth is that there is still a severe inventory imbalance (significantly too low nationally, but more so in CT) and an unprecedented number of buyers. The increasing pressure and demand for housing are coming from the ‘Millennial’ population.”
He continues, “Millennials are now ‘of age.’ This group is 25-40 years old and is now the largest demographic group in the US (surpassing the ‘Boomers’). They work and they need a home to settle down or start their own family. They make good wages, have real buying power, and are no longer avoiding commitment. If they are not renting, they already own a home and are beginning to ‘upsize.’ Connecticut continues to be an excellent choice for relocation for the ‘work from home’ opportunities it presents, and this group is at the peak age to buy, which only adds to the demand for homes – new or resale.”
So if the market is still strong, does this mean Connecticut home prices won’t drop significantly?
Housing bubbles, interest rate fears…there has been a lot of speculative chatter about Connecticut home prices being poised to drop. But Liguori cautions against such musings, telling CT Builder Magazine, “The consensus, not just for CT but nationally, is that pricing will not go down this year. The inventory supply makes it almost impossible to envision that kind of outcome now. In addition to the already mentioned need for homes, we cannot forget that Wall Street also has an appetite for homes. The single-family rental market has the most significant ROI of any commercial sector nationally. Hence, as they increase their respective portfolio holdings, it will continue to limit the properties available to home buyers. It is important to note that even with inflation, the issues globally with gas/oil, and the Ukraine/Russia global effects, the fundamentals of supply and demand will preclude any downward pressure in prices. That is just the reality of where things stand.”
How about new construction? Will new homes alleviate any of the pressure around housing inventory in Connecticut?
Though builders are filing permits and starting construction on new homes, Liguori reminds us that there are still factors affecting the new construction housing market in Connecticut. He tells CT Builder Magazine that new homes efforts are “nowhere near where they need to be to meet the demand in CT and nationally, to create some relief. Most are sold out for the current calendar year and going into the next year. Additionally, we all know that the labor shortages and difficulties in getting construction materials still face pressure from supply chain disruptions.”
In addition, Liguori explains that large-scale investors and Millennials buying into the market are all contributing factors in the low housing inventory throughout Connecticut. In addition, rising costs for rents out of state (in New York City, for example) are further driving homebuyers to Connecticut, where they can work remotely and still have easy access to the city.
You can read the entire interview with Calcagni Real Estate’s Antonio Liguori here.
Do you have more questions about the current Connecticut real estate market or about what your home is worth? Are you curious to view some of the homes that are available in your price range? Calcagni Real Estate would love to help you. Call your local Calcagni Real Estate office today!