A lack of inventory has hurt the residential real estate market around Fairfield County and Connecticut in general, according to Ryan Raveis, co-president with his brother Chris of Shelton-based William Raveis Inc., which has 134 offices across nine states.
“Median sales prices last year stayed about the same,” he said, “but average sales prices were down significantly.”
Raveis said there was no doubt that Fairfield County’s richer municipalities have been adversely affecting the big picture in the residential market. According to sourceMLS, while locales like Bethel and Bridgeport posted average sales prices up in both by 8 percent from 2017, Greenwich’s average sales price last year was down 8 percent from 2017. Old Greenwich fell by a little less than 12 percent and, while Darien was down just 3 percent, its number of unit sales declined by nearly 15 percent.
Part of the reason, Raveis said, is that “wealthier folks are leaving the state, and those who are replacing them don’t have the same level of income.”
According to data from the Internal Revenue Service, $2.6 billion in adjusted gross income was lost to other states as Connecticut experienced a net loss of roughly 20,179 residents in 2015. The largest group of tax filers leaving the state were those earning over $200,000 per year: between 2015 and 2016, the state saw a net loss of 2,050 tax filers earning at least that much money each year, the most since the IRS began tracking that income bracket.
“I don’t think anybody wants to die in this state,” Raveis said. “That’s why you see so many Florida and North Carolina license plates when you’re driving here in the summer — those people live most of the year outside of Connecticut.”
Nevertheless, he added that Fairfield is a good market for “trade-up buyers,” those looking to move into more desirable homes. There are opportunities being created for buyers in those higher end markets to get into a beautiful home at a lower price point, he said.
The ongoing perception that Connecticut as a whole is not business friendly, as evidenced by the exit of General Electric and the staff reductions at UBS and RBS, and doubts about its fiscal future thanks to the ongoing budget deficit, has had a deleterious effect, he added.
“A CEO who’s looking to move his company knows that this isn’t a particularly business-friendly environment,” Raveis declared. “And older, wealthier baby boomers are leaving.” Whether those attitudes will change under new Gov. Ned Lamont remains uncertain, he added: “I think everyone’s waiting to see what the new governor does.”
On the other hand, the county’s largest cities appear to be doing well.
Realtor.com recently ranked Bridgeport as the sixth “hottest” real estate market heading into 2019, predicting that sales would grow by 5 percent and prices by 4 percent.
According to Zillow, the median home value in Connecticut is $242,200, up 2.9 percent over the past year. In Fairfield County, the median home value is $400,800, a 0.2 percent decline. The online real estate database company predicts that the median home value statewide will rise 3.7 percent this year.
The specter of a negative impact on real estate sales by the partial government shutdown has not materialized yet, Raveis said. A National Association of Realtors survey of 2,211 members found 75 percent had no impact to their contract signings or closings, although 11 percent reported an impact on current clients and 11 percent on potential clients.
“The only impact we’ve seen is when the IRS office shuts down and can’t issue tax transcripts to verify tax information for a mortgage,” Raveis said. “Unfortunately we’ve dealt with a number of shutdowns over the past few years, and we’re dealing with this one as well.”