First, Some Numbers – Let’s start with 36,000. That was the number of active listings in the Connecticut real estate market in June 2014. December 2023 was reportedly some 6,500 active listings. This contrast puts some context on today’s numbers. If you take the broader historical range, there was a time when monthly listings were in the 50,000 range. So, we have seen a 90% drop from historical highs. The road to recovery is going to be long and hard.
Early reporting in February suggests that the real estate market is recovering but much more slowly than expected. While it is hard to separate out seasonal variations, the current estimate of 8,000 listings for February will be a combination of market recovery and expected seasonal increases.
Still, chatter about April listings being very large has also started. So, the look of this market could be very different in just a couple months. There is a sense that pent up demand is reaching something near a breaking point. Renters are tried of renting. Buys are tired of searching. Sellers are tired of waiting. But their fatigue disappears like the mist in the morning when they remember they have a 3% mortgage, and what is waiting for them is over two times as high.
Odds makers still see the mortgage rates coming down significantly after the Federal Reserve starts its long anticipated rate cuts. But don’t hold your breath. Some market watchers believe inflation will serve up a nasty surprise before June. The market could take an unexpected turn in the mid-year. You have to understand the many countervailing macroeconomic forces involving inflation, debt, housing prices, and even taxes.
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