COVID-19 may have slowed local home sales last spring, but real estate agents are reporting pent up buyer demand sparking bidding wars that are well over asking prices.
“Prices have absolutely increased,” said Maryann Stanley, of Century 21 All Points Realty in Southington. “... we can have 10 to 15 buyers. People are going in over asking (price).”
Stanley represents properties and buyers in Southington, Meriden, Plainville, Wolcott and Waterbury and has a listing on Brownstone Ridge in Meriden for more than $600,000.
Home sales were sluggish in the early days of the pandemic when traditional, in-person, open houses ceased due to industry safety guidelines.
The pandemic also frightened sellers who delayed putting their houses on the market.
But mask-wearing agents turned to private showings in addition to virtual tours and the past three months have seen a spike in demand for single-family homes with many potential buyers coming from crowded cities, real estate agents said.
Home prices rose about 8 percent across the country during the pandemic, with the exception of New York City and San Francisco, where housing costs are already high, according to Redfin, an online listing service.
“So many people (are) coming in from out of state to buy in Connecticut and there’s not enough inventory,” Stanley said.
Sandy Maier Schede, of Maier Real Estate in Meriden, said the stream of potential buyers out of New York began in Fairfield County and has spread to central Connecticut, where the prices are lower.‘Sellers’ market’
“More and more people were being cooped up in places and saying they want a yard,” said Schede, a former president of the Connecticut Realtors Association. “It’s really a sellers’ market. There are a lot of out-of-town and out-of-state buyers that feel that because they can work from home, they can work from anywhere.”
The pandemic has also brought families together.
“When they know they can’t travel, they want to be close to family and they circle the wagons,” Schede said, referencing a buyer from Pennsylvania.
The activity is also acute in southeastern Connecticut, said Carol Christiansen, president-elect of the Connecticut Realtors Association.
“In Fairfield County, we’re hearing of prices that are $20,000 to $50,000 over the asking price and vacation homes are becoming permanent homes,” she said.
The situation could eventually lead to more building, but a building materials shortage caused by the pandemic has slowed housing projects now in the works, Christensen said. She expects the demand to continue until a vaccine is found. Uptick in Meriden
Suburbs aren’t the only places seeing bidding wars. The Meriden market has seen an uptick in sale prices with a home on Ann Street listing for $179,000 and selling for $190,000. The home sold in 2017 for $100,000 and was appraised by the city for $142,000. Another house on Ann Street is also listed at $199,000, and a refurbished two-bedroom home on Summer Street is listed at $207,000 and under deposit.
One of Schede’s customers had to drop her price by $8,000 because a buyer’s mortgage lender would only back the appraised value. In other instances, some buyers who exceed the listing price and the appraisal will pay the extra in cash, she said. A multi-family home buyer is showing up to a closing this week with $400,000 in cash, she said.
Cameron Norfleet, of Century 21 AllPoints Realty, said the south end of Meriden has seen a 12.5 percent increase in sale prices over three years, and that 18 out of 64 properties in the city sold in the last month were on the market for seven days or fewer.
“There is a 3.2 month supply of available properties on the market in Meriden; this means that if no other properties were to come on the market within the next 3.2 months, the inventory would be fully depleted,” Norfleet said.
The work-at-home phenomenon is forcing people to rethink the way they utilize their home. Home is now work, school, daycare, etc. For these reasons, people are now looking for bigger homes and caring less about commuting time, Norfleet said.
“It’s been a really crazy time in real estate,” said Judi Mik of Berkshire Hathaway HomeServices New England Properties in Wallingford.
It’s not unusual these days to see offers $30,000 or more over asking price in Meriden, Wallingford and Southington. Extremely low mortgage interest rates are also fueling the buying frenzy.
“The interest rates are terrific,” Mik said. “People working at home are finding they want a house and a yard.”
Condominiums have also picked up, but not to the same level as single-famiy homes. But complexes such as Mattabasset on Meriden’s east side have returned to the $160,000 to $170,000 price point, she said.
“The inventory was low to begin with and COVID prevented people from selling,” Mik said. “We’re seeing an overall situation like I’ve never seen before.”