via Moffly Media

By Liz Barron | Published on February 27, 2024

Immaculately maintained properties with beautiful homes, coupled with easy access to beaches, parks, quaint downtowns and New York City, Lower Fairfield County continued to see a flurry of activity in the real estate market last year. And while total sales were down, the market was anything but slow, with strong demand from buyers who knew what they wanted and sellers who knew what their properties were worth. New Canaan, Darien and Rowayton all saw a rise in median sales price, with New Canaan topping the list at $2.1 million. We sat down with the experts to gain an inside look at the last 12 months and get a glimpse into the future.

THE YEAR IN REVIEW

From luxury homes to increased rental opportunities, Lower Fairfield County is very attractive to those looking to relocate

The 2023 real estate market saw a dip in its buyer pool for the first time since 2020. Once completely oversaturated with demand, many chose to stay put while waiting for sky-high mortgage rates to come down. While the appeal of suburban coastal living in southern Fairfield County remains as alluring as ever, the thought of paying so much more for a mortgage was a pill too tough to swallow for many prospective buyers this year. “There is clearly greater hesitation to purchase a new home with mortgage-backed financing, and fewer refinancing deals are getting done,” says Meg Schwanhausser (William Raveis). “When you think about it, what a homeowner may have spent three years ago on overall carrying costs at a 2.5 percent rate is now multiples of that because of rate hikes—which is significant.”

The number of homes sold in Darien, New Canaan and Rowayton were all lower over the past 12 months than during the previous year, but list prices continued to rise due to scarcity in inventory. “The lack of equilibrium in our local market has been primarily caused by two factors. The combination of potential sellers having below-market rates on their existing mortgage and, in most cases, properties trading well above listing prices, has kept people in a ‘let’s wait and see what happens” mindset,’” says Gillian DePalo (William Raveis). “Other than people who must sell due to life events, potential sellers have been less inclined to trade up or downsize, given higher rates and prices making the transition less financially attractive.”

The multiple offer craze that began during 2020 has dwindled, but agents still saw numerous bids on homes that were well-priced and -marketed. “Through the fall we continued to see homes, mostly under $3 million, receive multiple offers,” says Courtney Haidinger (Houlihan Lawrence). “We were seeing homes priced around $1 million in the late summer still receive ten-plus offers in many cases. As the fall market progressed, that number lowered to an average of about four to five offers.”

DARIEN

Properties sold in 2023

• 239

Median sales price

• $1.9M

GOOD NEWS

• Median sales price rose by 14% from the previous year

• Average number of days on the market decreased to 39 from 46

RATES & RELIEF

Higher interest rates had buyers concerned

The Fed increased interest rates numerous times in 2023 and by July they had reached 5.5%, the highest level in over two decades. “The rising rate environment created a stalemate in the market, as homeowners looking to downsize became reluctant to give up their low rate and pay six to seven percent,” says Peter Stuart (Houlihan Lawrence). While buyers and sellers were both affected by these staggering numbers, Doug Milne (Houlihan Lawrence) notes that the rise in rates has impacted the first-time homebuyer the most. “We got used to rates at or near three percent. That rate has not been seen since the end of WWII. We have seen rates in my career as high as 17 percent,” says Milne. “Those fortunate first-time buyers that acted between 2020 and 2022 have locked in historically low rates.” It’s now clear that these low-interest costs were an anomaly, but many potential buyers had started to assume that they were the new norm.

The good news is that 2024 is looking up, with rates having recently dropped and experts predicting that they will continue to fall throughout the year. “Most economists are forecasting several more reductions by year end, many saying rates will fall to approximately 4.25 percent by summer 2024,” says Amanda Spatola (Houlihan Lawrence). “Sellers are reaching out about getting their homes ready for the market and buyers are checking back in.”

LOOKING TO BUY?

The low-risk buyer who can be flexible at closing continues to appeal to sellers

Date the rate, but marry the house,” advises DePalo. “Getting your foot in the door of that perfect home is a lot harder these days than potentially refinancing could be in the future.” Many had hoped that bigger mortgages would mean lower home prices, but the lack of inventory, once again, drove record-high list prices and, for those in need of buying a home in 2023, that meant paying up.

The emotional strain of losing out on a house that you’ve fallen in love with is exhausting and, for that reason, many potential buyers decided to put their hunts on hold. High rates, high prices and little to choose from left realtors looking for unique ways to help their clients win bids. “The bottom line is that in this market, you really have to be prepared in multiple ways to make a compelling offer, stand by that offer, listen to all the advice your agent gives you and ultimately win a bid here,” says Haidinger. “We still see many cash offers in our market, but many buyers waive their mortgage contingencies to remain competitive. Typically, our sellers accept an offer based on the highest purchase price, and the cleanest and best terms.” Even the most motivated clients had less buying power in 2023. “Taking risk off the seller was the name of the game, says Spatola. “And flexibility is key—be flexible on close, inclusions and exclusions, etc. And of course a great offer price doesn’t hurt.”

READY TO SELL?

Sophisticated buyers seek curb appeal

A larger buyer pool and less competition in no way meant those buyers were desperate. They were even more discerning and less willing to accept ‘you get what you get, and don’t get upset,’” says Lynley Middleberg (William Pitt Sotheby’s). “Homeowners who are currently considering selling can still realize maximum value for their properties due to the current supply and demand dynamics, but we do expect to approach a more normalized market this year in 2024, one more closely aligned with the market conditions prior to the pandemic.” Sophisticated consumers continued to seek homes with the best curb appeal in 2023. Amidst the peak of Covid, staging, photography and presentation might have been less crucial, but today’s buyers aren’t willing to pay for something that’s not up to par. “Curb appeal and attention to every detail in a home allows a potential buyer to envision themselves living there, says Haidinger. While sellers stand to profit significantly from median house prices maintaining their all-time-high status, they still need to consider what the buy side will look like for them. And, according to Schwanhausser, it might not be worth it for sellers that would have to trade in their comfortable monthly cost for higher costs because of the rates. “Even in a seller’s market, it is sometimes hard to justify selling,” she says.

NEW CANAAN

Properties sold in 2023

• 163

Median sales price

• $2.1M

GOOD NEWS

• Median sales price rose by 4.5% from the previous year

• Average number of days on the market decreased to 61 from 65

RENTAL LIVING

More options meant more short-term solutions

The combination of a lack of availability and buyers being hesitant to get locked into high interest rates created yet another influx of those looking to rent in 2023. New Canaan still has the most to offer in the rental space market, but Darien Commons, located across from the Noroton Heights train station, contributed significantly to leasing opportunities by providing the town with 122 residential units and 120,000 square feet of retail space. The 2023 completion of the first phase of The Corbin District in downtown Darien also created room for 38 additional apartments in three buildings and approximately 28,000 square feet of retail space. “I have never seen tenant demand like this before in my 35 years in the real estate business,” says David Genovese, founder of Baywater Properties. “It is extraordinary, and says to me that the future is very bright for Darien and the surrounding suburbs.” Rowayton continued to draw in crowds from all over for beachside rentals and those looking for a quaint vacation-type feel. According to Stuart, summer rentals are still in demand. “I just signed a lease for July, which is likely the earliest I have ever consummated a rental agreement,” he says. “A lot of young people moved south during Covid but are keen to come back for the summer, so well-priced summer rentals still go quickly.” Prices have come down a bit from the peak in 2021, which DePalo says is good news for would-be sellers who were hesitant to cash-in on a potentially high-selling price because of the absence of anywhere to go.

ROWAYTON

Properties sold in 2023

• 50

Median sales price

• $1.7M

GOOD NEWS

• Median sales price rose by 6.25% from the previous year

• Average number of days on the market decreased to 41 from 46

WHERE ARE NEW RESIDENTS RELOCATING FROM?

From near and far, both buyers and renters love Fairfield County

Fairfield County and the appeal of smaller towns will always draw in crowds from New York City, particularly for those with young children. But there has also been a steady flow of buyers moving from the West Coast and, interestingly, Westchester. “After the city, the number-two town from which new New Canaan Public School students hailed from this year was Rye, New York,” says DePalo. “We have seen a large migration from many Westchester towns over the past two years. These buyers have cited Connecticut’s more favorable tax rates and our great schools as the most important determining factors for them.” Another unpredicted trend Genovese has seen in the rental market is grandparents seeking to relocate to live nearer to their grandchildren and adult children. “My sense is that these families were not able to see their grandchildren during the pandemic, and they decided to not risk having that experience again,” he notes.

In-town or inter-town movement remained popular among those looking to downsize and sell large homes with sizable properties that they no longer needed. These residents were looking for condos and apartments that would allow them optimum proximity to town and or the beach. “Walkability and closeness to the community will always be important,” says Middleberg. “[And] as many companies are starting to require employees back to the office, at least in a hybrid model, commute time is factoring back into the equation.”

12-MONTH TRENDS

Home amenities drive highly sought-after luxury living

While more space and land once appealed to the majority of those looking for southern Connecticut living, DePalo notes that smaller luxury homes, wellness amenities and maximizing outdoor space topped the list of trends for 2023. “In a surprising turn, many buyers put significant investments into improving homes much smaller than what one might naturally think of as typical luxury home square footage,” she says. “Today’s buyers continue to skew more toward using their disposable income for lifestyle choices versus buying the biggest home they can afford.” With the rise of popularity in pickleball it’s no surprise that having an at-home court would be appealing to buyers of all ages. “The trend winner of 2023 was by far the dedicated pickleball court with Zillow reporting a 64 percent increase in homes mentioning ‘pickleball’ in their description,” adds DePalo.

Thoughts about “the ideal” home layout are always evolving. Last year it seemed that many buyers were looking for first-floor bedrooms with full baths. Pools, outdoor kitchens, patios, screened in porches and built-in firepits continued to top wish lists.

Cathy Thomas (Houlihan Lawrence) adds that she is seeing more of a demand for personal space, with clients moving away from the giant family room/kitchen layout. Buyers are wanting more separation between the two, with spaces like a bar or a sitting area acting as a divider. She is also seeing more of a demand for prep kitchens. “This allows the mess of entertaining to stay behind the scenes so that the primary kitchen can be a true entertaining space,” she says. Making the most meaningful use out of space has become a top priority for nearly all buyers, regardless of the size of the home.