I’m Andrew O’Reilly from Seaport Real Estate. Today, I’m not just a real estate professional, but also a fellow homeowner sharing my personal experiences and insights into the unique challenges of Connecticut’s real estate market.
Our Family's Dream and the Market Reality
My family, like many in Connecticut, dreams of a new home – closer to the beach, with a bigger yard, a more spacious primary bath, and a walk-in closet. However, the current market makes this dream a complex decision. Our story reflects a widespread dilemma affecting homeowners throughout the state.
Interest rates have risen sharply, making new mortgages considerably more expensive than just a few years ago. We secured a mortgage at an incredibly low rate of 2.5% during the pandemic, and facing today's higher rates feels daunting. This shift isn’t just affecting us; it’s a concern for many who are contemplating a move.
Many Connecticut homeowners are in a similar boat. Whether it’s because of low current mortgage rates, having no mortgage at all, or the costs associated with upsizing or downsizing, selling doesn’t always make financial sense. Despite potential equity gains, high interest rates mean that even downsizing might not lead to lower mortgage payments. This is true for us and for many others, leading to a stagnation in market inventory.
Consequently, homeowners are increasingly choosing to invest in their current properties. In our case, we're weighing options like renovating our kitchen or adding a room – decisions echoed by many in our community. This trend is a direct response to the high costs and risks associated with moving in the current market.
The reluctance to sell, stemming from various financial considerations, is contributing to the low inventory in Connecticut’s housing market. This is causing Connecticut’s housing market to be marked by a significant mismatch in supply and demand, particularly evident in Southeast Connecticut. To understand this imbalance, one must look closely at each town and price range, but the general trend is clear: more buyers than available homes.
The reluctance to sell, stemming from various financial considerations, is contributing to the low inventory in Connecticut’s housing market. With about 32% of Connecticut homeowners free of mortgages, and the vast majority of homewoners have a low interest rate many see no advantage in leaving their valuable assets. Solutions like new construction are part of the answer, but broader strategies need to be explored to address these systemic issues.
As we navigate the complexities of Connecticut’s real estate market, both personal experiences and broader market trends play a crucial role. The decisions facing my family are mirrored across the state, highlighting the need for thoughtful dialogue and innovative solutions in our housing market.
I invite you to share your own experiences and perspectives. Are you facing similar challenges? What solutions do you see for Connecticut's housing market? Let’s come together to discuss and explore ways to make our real estate market more dynamic and accessible.
Andrew O’Reilly
Seaport Real Estate Services
860-608-5065
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