Sponsored by Brown Harris Stevens.

To understand the Lower Fairfield County real estate market in the first quarter of 2024 you have to first look at inventory. Or at least, the relative lack of it. 

Throughout the quarter, our inventory levels of houses and condos remained about 20 percent lower compared to the same period last year and a striking 80 percent below levels seen in the first quarter of 2019, prior to the pandemic.

According to Brian Cleary, Connecticut Market Specialist at Brown Harris Stevens, “The main reason for this scarcity of listings is the Federal Reserve’s decision to delay lowering its benchmark interest rates.” This in turn has helped to keep mortgage rates in the upper 6 percent range for most of the year’s first three months. Given that most homeowners with mortgages currently have a rate below 6 percent — the median rate of all home mortgages in the U.S. is 3.8 percent according to the Bureau of Economic Analysis — this has prolonged what’s known as the rate-lock effect, where homeowners are reluctant to move and take on a new, higher mortgage rate. 

With fewer homes available for sale in Lower Fairfield County, we’ve seen both a dip in sales totals and the continuation of a very strong seller’s market.

In the first quarter, the total number of sales dropped by 13 percent compared to the same period last year, with 809 house and condo closings representing the lowest total for the quarter since 2012. Furthermore, at the end of March, the number of house and condo sales in the pipeline, known as pending properties (those with signed contracts yet to close) was down 12 percent from a year ago.

Yet, despite the lower sales volume, demand remains as strong as ever. One sign of this is the high number of multiple-bid scenarios we are seeing in our market. In the quarter, over half of house closings sold for over the asking price, with the average list-to-sale price ratio at 102.6 percent, up 2.4 percentage points from the same time last year. For condo closings, 45 percent sold above the list price, with the average list-to-sale price ratio at 100.9 percent. This marked the fourth consecutive quarter this ratio was above 100 percent for condos.

This competition among buyers has pushed prices higher. In the year’s first three months, the average house closing price rose 14 percent to $1.6 million, while the median price saw a 9 percent jump to $996,000. In all, there were 24 house closings above $5 million, the second most for a first quarter since 2007 and a big contributor to the higher average and median prices. For condos, the average closing price remained even with last year, while the median price rose 5 percent to $433,000.

“Despite the challenges posed by inventory shortages, as we look forward, there is certainly cause for optimism,” says Chris Halstead, Executive Sales Director of Connecticut at BHS. “The overall economy remains strong and the high demand we are seeing reflects the many great attributes of the Lower Fairfield County market for home buyers. Additionally, there is an expectation that mortgage rates will eventually start to inch lower in the second half of the year, which would likely increase overall activity in our market.”

Note: Brown Harris Stevens has sponsored this content for Westport Journal. Brown Harris Stevens (BHS) is one of the most prominent privately owned real estate firms in the world. Established in 1873, BHS has historically dominated the luxury, high-end market. With more than 2,300 agents across the East Coast, the company oversees the sale of marquee properties worldwide, including property management and new development marketing, from its headquarters in New York City and its offices throughout Connecticut, Hudson Valley, New Jersey, the Hamptons, Palm Beach, and Miami.  Learn more at www.bhsusa.com.