If you’re wondering whether or not you can sell your home quickly, 2021 might be your year – low inventory combined with high demand and steep price increases is shaping the Connecticut housing market.
What is low inventory and what does it mean for sellers?
In real estate, housing inventory refers to the number of homes currently for sale. Industry experts calculate the number of months of inventory left by taking the number of homes available for sale and dividing it by the number of homes that have been sold or pending sale within the same period.
The resulting number is the number of months it would take agents to sell every home that is currently listed assuming that no new listings are introduced to the market.
Inventory is an important indicator of the condition of the market. For instance, if there are 5 to 8 months of inventory, experts can say that they are in a balanced market. If that number is less than 4 months, then you can call it a seller’s market. If housing inventory exceeds 9 months, you’re in a buyer’s market.
Low inventory in Connecticut
Increased real estate activity across the United States in 2020 drained Connecticut’s housing inventory, with homes spending considerably less time on the market. Even homes that typically wouldn’t sell were sold during the frenzy, according to local Realtors.
As of December 2020, Connecticut had less than 3 months of housing inventory available, which local experts consider an “all-time low” for the market.
In Fairfield County, there was a staggering 39.5% increase in the number of homes sold in August 2020 compared to August 2019, according to data from the Stamford Board of Realtors. 1,815 single family homes, multi-family homes, and condos were sold in August 2020 compared to 1,301 in August 2019.
Hartford County recorded a 17.52% increase during the same period. The Greater Hartford Association of Realtors reported a 56% decrease in the number of single-family homes available in September 2020 compared to the previous year.
The demand was driven by low interest rates and influx of out-of-state buyers from New York City, Boston, and other urban centers moving to less densely populated suburban and rural areas.
Realtors believe that 2021 will continue to be an active year for Connecticut real estate, with low interest rates and continued buyer demand. Inventory will have a huge impact on the market – with more homeowners refinancing their mortgages or making renovations instead of selling, there will be fewer listings coming to the market this year.
However, builders might be able to revitalize inventory with new housing stock to meet some of the demand.
The buying boom is expected to balance out mid-2021 when most of the demand has been met and as vaccine distribution helps slow the virus. Interest rates, migration patterns, employment, and buyer confidence will continue to dictate real estate trends for the foreseeable future.
How does low inventory affect sellers in Connecticut?
Get ready for shorter times on the market
If your Connecticut home is in reasonably good condition and is priced accurately, it’s likely that your home will sell faster than usual. Competitively priced homes rarely stay on the market for months or weeks at a time – some get sold within days of listing.
So if you’re selling in a hot market with low inventory, be ready to act quickly. Once you accept an offer, you might need to process paperwork, deal with home inspections, and turn over the keys sooner than expected.
Be more flexible with home viewings
With fewer active listings to choose from, you’ll likely get many interested buyers. So make sure that the property is ready for safe and socially distant home viewings.
The property will need to be cleaned, decluttered, and staged quickly. You’ll also have to be more flexible with showings. With safety guidelines limiting the number of guests allowed to tour the property at any given time, you might have to hold multiple showings in one day to maximize time.
You can also offer alternatives like 3D tours, self-tours, virtual staging, and live streaming to maintain safety and physical distancing when showing your home.
Be ready for bidding wars
Bidding wars are common in tight markets. A bidding war takes place when multiple buyers make offers on a single property. While a bidding war might seem advantageous for sellers, it can be overwhelming as well – how do you evaluate offers and choose the best one?
When handled poorly, a bidding war can leave potential buyers feeling disgruntled or discouraged, and force them to walk away from negotiations altogether, causing you to lose out on a lucrative sale.
In robust markets like this one, it’s important to work with an experienced Realtor who can help you evaluate offers and avoid stress.
Decide whether to buy before selling
In a seller’s market, sellers have to make the difficult decision of whether or not they should buy a home before listing, because they’re worried about not having a suitable place to live if their home sells faster than expected.
There are some risks to buying a new home before selling, such as being stuck with two mortgages while waiting for the home to sell.
If you don’t feel comfortable buying a new home before selling, you can make temporary living arrangements with friends, family, or a local hotel or rental while waiting for your current home to sell.
If you’re ready to sell real estate in Northern Fairfield and Litchfield Counties, CT, call Fazzone & Harrison Realty LLC at 860.307.7203 and 860.354.0479, or send an email to KHarrison(at)FazzoneAndHarrisonRealty(dotted)com to get started. You can also message us here. As a boutique real estate agency offering custom services, we have over 30 years of real estate experience. We can’t wait to help you sell your home in this dynamic market.