Buying in Connecticut May Be the Better Option Over Renting

 In many parts of the country, renting is cheaper than buying.  Connecticut, especially Greater New Haven, is not typical.  Thanks to years--decades--of languishing prices, we are no longer an expensive place to buy a house.  On the other hand, given our student population, and our arts/culture hub, we are one of the hottest rental markets across the United States.  In fact, the last survey we saw showed us as second!

What does that mean for buyers?  It still is affordable for many to purchase, especially given the interest rates.  Although there is a lot of competition, it is largely local, except for maybe the Shoreline.  The rental market, thanks to Yale, is international.  Listings are creeping up, and offers have been slightly slower to come in.  Competitively, then, it's a little easier to buy.

Will there still be appreciation?  It appears that millennials will be forming households at a rapid rate going forward.  Even though we have been told how different they are than their parents and grandparents, they seem to want many of the same things in a home, especially during the pandemic.  So the supply going forward should keep prices up for years to come.  There hasn't been much home construction for a long time, and that, right now at least, is backed up with regard to both supplies and labor.  

What should sellers do?  There is still a need for more product, so keep those listings coming.  Don't be greedy, and don't count your chickens before they hatch--a lot can happen before a closing takes place.  You will, however, be in a great position to buy when prices are lowest, at the end of the year, if you sell now.  

And Labor Day, the start of the fall market, is just around the corner for everyone!

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Renting in Connecticut? Think again.

A new study has concluded that Connecticut is one of the most expensive states in which to rent, making it a place where people should definitely consider buying instead.  Our vacancy rate for rentals, particularly in New Haven, is one of the lowest in the country, and that, of course, pushes monthly rental costs up. Because our housing prices in general are 20% below where they were in 2006, there are some relative bargains still to be had on the buying front.  The combination of a rapid rise in monthly rents, combined with a still-depressed purchase market, means that renters should think before deciding not to buy.  And, if you combine those facts with current mortgage rates, they should think twice!


Although there are many articles that warn against buying unless you are going to stay put for several years, the combination of factors above would argue that that length of time might be shorter.  If you happen to get really lucky, appreciation on the home price could pay all of the moving costs and more.  There can definitely be valid reasons to rent instead, but everyone now should be doing the math before making up their minds.

New Construction

There's another sign out there that things are improving.  We are starting to see new construction again.  When prices go down, new construction has a hard time competing, since the costs of land, site improvements, labor, and materials don't really go down much, so new construction can't compare to the price of a home that was built a few years ago.  In addition, loans are harder to get, and most builders find it difficult to get financing for projects.  Add in the time a completed home could sit on the market before selling, and you don't see much being started.

Lately, statistics from around the country show housing starts beginning to rise.  We're at the end of that increase, since we don't have as much land, as much new employment, and costs as low as some other states.  Even we, however, are noticing activity.  There is always a portion of the buying public that seeks out new construction, especially people moving from other places, who want their new home to look like the home they left behind.  In recent years, many of them have turned to renting, either because they left behind an unsold home, or because they were worried that it was the wrong time to be buying.  Eventually, even the most skittish will want to settle down.  And it looks as though that time may be upon us--good news for everyone!