house prices are skyrocketing in one state
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By Guilia Carbonaro | Published on July 19, 2024
Home prices are rising faster in Connecticut than in any other state, according to the latest data from Redfin, as inventory remains tight.
In June, the real estate brokerage found that the median price of a home in Connecticut was $477,600, up 11.2 percent compared to a year earlier. By comparison, the median sale price of a home at the national level was $442,525 in the same month, up 4.0 percent year-over-year.
While a rise in inventory across the country is bringing down home prices in states like Texas and Florida, which have built the most new homes in the past few years, Connecticut is experiencing the opposite trend.
The number of homes listed for sale on the market in June was 9,933, down 8.2 percent year-over-year. There were 3,749 newly listed homes, down 14.0 percent compared to June 2023.
This lack of inventory is likely keeping prices up in the state, as demand remains high: homes listed for sale went under contract after an average 28 days in June, one day less than a year earlier.
But as mortgage rates remain high, hovering around the 7 percent mark, and home prices continue rising, some homebuyers are clearly being discouraged from purchasing property at this time, and they're pulling out of the market.
According to Redfin data, there were 3,413 homes sold in Connecticut last month, down from 4,116 homes sold in June 2023, a fall of 17.1 percent year-over-year.
Nick Gerli, CEO of Reventure, commented on the growth in home prices in Connecticut saying that it's not a coincidence that prices are rising in the Northeast and Midwest.
"The basic idea is this: the more 'stable' a housing market is historically, and the more home values are linked to local incomes, the better the performance will be during the down cycle," he wrote on X. "Currently, you can see that the least overvalued housing markets are also located in the Northeast/Midwest. Not a coincidence."
It's not just housing that's expensive in Connecticut: according to the 2024 Cost-of-Living Index (COLI) published by the Council for Community and Economic Research, residing in the Constitution State costs 21.6 percent more than the national average. That includes the high cost of housing, health care, transport and other essentials.
According to the real estate platform, the city is now attracting remote workers for whom it was previously inconvenient to commute from Hartford to New York.
"Renters are being drawn to more affordable areas within the Northeast and Midwest," Skylar Olsen, chief economist at Zillow, said in a news release. "Commuting into New York City or Boston from places like Hartford or Providence might have been a deterrent before, but in this new age of remote and hybrid work, the savings seem worth it for many renters, even if it means an occasional painful commute."
At the national level, rents are up 3.5 percent compared to July 2023—the fastest annual growth in a year.