Reading the national news, we get a lot of news about real estate in other places, where the biggest obstacle is lack of inventory. That, obviously, pushes prices up, since demand then exceeds supply. This has now been going on for so long that the market has begun to cool off in some of the places that were strongest, including metro NYC.
Despite our proximity to New York, we in Connecticut have fallen way behind the curve. We're not growing, in jobs, in income, in housing, or in really anything much these days. Therefore, our demand is lower, so our supply is higher, and prices have been going down for the past year; there's almost nowhere else in the country where this is true.
Good news, however, came yesterday! Our prices for housing went up last month, after twelve straight months of decline. Sometimes it's good to be behind the curve, because the curve can bend, and we are still catching up. Some of this is household formation, which is bound to occur as the millennials settle down. Some of it is pent-up demand, from renters who are seeing their rental costs rising quickly (and more quickly than in most states, since our supply has been very low, and we have lots of students to use it up), and from investors, who see this region as affordable, compared particularly to New York and Boston.
Let's expect that our growth will continue for some time to come, since rates are still low, and prices have a long way to rise. Our building permits are down, so the supply of housing (except on the rental side), shouldn't be increasing much in the near future. It's time for us to join the party!
