Investor · Lawrence, KS · Member since 2012 · 50 posts · 15 votes
The market seems to be cooling rapidly. I'm seeing massive price drops of 5-10% where I have one property listed in Newtown CT and another listed in Milford that I just price dropped after 3 weeks with no offers.
What's everyone else seeing in the Connecticut market? It shows up as a strong growing market on many real estate trend reports, but it's not what I'm seeing on the ground.
im in the 500-600k range in Newtown and Milford, fully renovated, nice homes.
Englewood, NJ · Member since 2018 · 356 posts · 61 votes
4d
J.C., that gap between what the trend reports say and what's actually happening on the ground is real, and I think it's showing up in a lot of markets right now, not just Connecticut.
I'm based in North Jersey and primarily buy at tax deed auctions down in Broward County, South Florida. The same disconnect is there - the headline data says prices are holding, but at auction the properties that are sitting are the ones priced for what the market was 12-18 months ago. The ones that actually move are priced for today's reality.
The $500-600K range you're working in is tricky right now. That's solidly in the move-up buyer territory, and those buyers are getting killed by rates. A $550K purchase with 20% down at 7% is pushing $2,900/month in P&I alone. That buyer used to have $800K in buying power at 3% rates. Now they're capped at maybe $450K if they're being smart about it. So the pool of qualified buyers for your renovated homes has literally shrunk.
What I'd be curious to know is whether you're seeing any traction with cash buyers or investors in those towns. In my experience, when the financed buyer pool dries up like this, the next 3-6 months are either going to force price adjustments down to where the math works for investors, or inventory just sits. Usually it's the former, but it takes time.
The trend reports lag reality by about a quarter. They're showing you data from when contracts were signed 60-90 days ago. What you're seeing with zero offers after 3 weeks is the leading indicator. Trust what's happening at your listing, not what the reports say.