Learn How To Start Investing In Real Estate
Learn How To Start Investing In Real Estate

Connecticut Real Estate Market Trends & Analysis

The Connecticut real estate market has faced more obstacles than most states across the country. At a minimum, real estate in Connecticut has trailed national averages because of a poor tax reputation. For years, the local housing sector has remained suppressed because of a relatively high unemployment rate and a tax code that made homeownership much more difficult than almost anywhere else. As a result, the Connecticut housing market sat stagnant for the better part of a decade, that is, until the pandemic.

Since the onset of the pandemic, few markets across the country have seen home values appreciate as much as those in Connecticut. The increase results from the same factors impacting everywhere else: low interest rates, increased competition, and a distinct lack of available inventory. It is worth noting that home values in Connecticut appear to have increased more than most other states in the last two years because of the lull they experienced following the previous recession. Again, a strict tax code and high unemployment prevented the Connecticut real estate market from taking off in previous years, which meant local homes represented more of a value heading into last year.

However, with the pandemic nearing a second year, local real estate has appreciated so much that the Connecticut real estate investing community has had to alter its best exit strategies. While the state's relative affordability still leaves room to conduct flips, the new market created in the wake of the pandemic is more conducive to long-term holds.

The Top Connecticut Real Estate Markets

While the best real estate market in Connecticut is up for debate, here’s a list of the cities investors may want to pay special considerations to:

Connecticut Real Estate Fees & Regulations

Real Estate

Closing Conducted by: Attorneys
Conveyance: Warranty Deed

Foreclosure Procedure

Primary Foreclosure Method: Judicial
Process Period: 5 - 6 months
Notice of Sale: Court
Redemption Period: Court Determined


Income Tax: 3.0% - 6.99%
Corporate Tax: 9%
Sales Tax: 6.35%
Estate Tax: 7.2% - 12%
Inheritance Tax: No
Median Property Tax: 1.63%
Property Taxes by County:

Average Transactional Costs

Closing Cost: $2,555
Transfer Fee: Transfer fee 0.75% up to $800K; 1.25% of value over $800K
Origination Fee: $1,885.00

Connecticut Housing Market Overview

  • Median Home Value: $326,124

  • 1-Year Appreciation Rate: +20.7%

  • New Listings (Second Quarter): 16,220 (+19.8% year over year)

  • Number Of Sales (Second Quarter): 11,139 (+23.7% year over year)

  • Average Days On Market (Second Quarter): 43 (-42.7% year over year)

  • Median Listing Price (Second Quarter): $319,000 (+16.0% year over year)

  • Average Sales Price (Second Quarter): $513,113 (+29.9% year over year)

  • Median Rent Price: $1,486 (+11.9% year over year)

  • Price-To-Rent Ratio: 18.28

  • Unemployment Rate: 7.2% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 3,605,944 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $73,781 (latest estimate by the U.S. Census Bureau)

  • Foreclosure Filings In First Half Of 2021: 836 (-69.5% year over year)

Connecticut Median Home Prices

The median home price in Connecticut is approximately $326,124. About ten years ago (Q3: 2012), however, Connecticut home values rested somewhere in the neighborhood of $237,000—that’s an increase of 37.6% in as little as a decade. However, it is worth noting that prices remained relatively stagnant over the last ten years because of a strict tax code and high unemployment numbers. From about the third quarter of 2012 to the third quarter of 2020, the median home value in the Connecticut real estate market only appreciated by about 5.5%.

It wasn't until the onset of the pandemic that the median home value in Connecticut started to match the pace of its national counterparts. Thanks, in larger part, to historically low inventory levels, low borrowing costs, and a dramatic increase in competition, local home values increased as much as 20.7% in the last year—nearly four times the entire decade leading up to last year. For context, the median home value in the United States increased more than fifty percent in the nine years leading up to the pandemic, and another 17.7% in the previous 12 months.

There is no doubt about it: The median home value in the Connecticut real estate market has trailed national averages for the better part of a decade. Today, however, it appears as if the stagnation in the last ten years is being made up for. With a higher-than-average appreciation rate, real estate in Connecticut seems to be firing on all cylinders.

Home prices have grown to be prohibitively expensive, which begs the question: Why is Connecticut real estate so expensive? Home values are testing new highs each month, and listings are selling faster than they were at this point last year. Demand appears to be intact, despite the latest increases, which will continue to suppress inventory levels. It is the demand which will lead Connecticut home values higher for the foreseeable future. As the unemployment rate improves and the economy opens back up, more people will look to buy in a market that is drastically lacking supply. The added demand pressure will turn into competition and allow sellers to increase their prices accordingly.

Connecticut Median Rent Prices

Connecticut’s home prices impact the entire housing sector, and the latest rate of appreciation has transferred over to the rental market. While home prices have increased more than twenty percent in the last year, rental rates are touching a twelve percent increase. If for nothing else, higher home values and a lack of listings prevent a large population of prospective buyers from participating in the market. As a result, many people want to buy but can’t, which lends itself to another issue: the same supply and demand crisis facing would-be buyers is impacting renters.

Since more people are priced out of the buying market, we see more renters than average competing over fewer available properties. Landlords have found themselves in a position of power in Connecticut, and their asking prices reflect as much.

According to the latest data released by Apartment List, the median rent in Connecticut has increased 11.9% in the last year and now sits around $1,486. From an individual unit perspective, however, local rents can be broken down as follows:
  • Studio: $1,009

  • 1-Bedroom: $1,221

  • 2-Bedroom: $1,550

  • 3-Bedroom: $1,782

  • 4-Bedroom: $2,194

Comparatively, the national average rent price is about $1,219, or 21.9% lower than Connecticut's. The difference is noticeable, and appreciation forecasts suggest the discrepancy will only grow for the foreseeable future. Therefore, now looks as good a time as any for the Colorado real estate investing community to consider long-term investing strategies.

Connecticut Foreclosure Trends & Statistics

According to ATTOM Data Solutions’ Midyear 2021 U.S. Foreclosure Market Report, a total of 65,082 U.S. properties received a foreclosure filing (default notices, scheduled auctions, or bank repossessions) in the first six months of the year. “That figure is down 61 percent from the same time period a year ago and down 78 percent from the same time period two years ago,” according to the report.

For what it's worth, the decline in foreclosures is the direct result of government intervention. Forbearance programs and government aid prevented many landlords from following through with evictions, and lenders weren't allowed to initiate foreclosure filings. Foreclosures in Connecticut are no exception, as filings are down about 69.5% over the first six months of 2021 from the same point in the previous year. In all, Connecticut saw a total of 836 properties file for foreclosure from January to June. At that rate, only 0.06% of the state's housing units are considered distressed.

The Connecticut real estate market appears to have faired well over the last year, posting one of the country's most significant decreases in filings. According to ATTOM Data Solutions, "States that posted more than 100 REOs in the first half of 2021 and had the greatest year-over-year decreases in REOs, included Michigan (down 90 percent); New York (down 86 percent); New Jersey (down 84 percent); Connecticut (down 83 percent); and Pennsylvania (down 81 percent)." The reason behind the lower rate of filings in Connecticut may be because of all of the equity added in the last year.

However, despite the decrease, it is safe to assume the number of distressed homeowners will increase sooner rather than later. It is too early to tell just how many distressed homeowners will file for foreclosure once government aid expires, but investors should prepare for an influx. As a result, real estate investors in Connecticut should position themselves to aid distressed homeowners soon; doing so may simultaneously help those at risk of foreclosure and help investors land their next deal.

Tax Lien Investing

  • Tax Lien or Deed: Tax Deed Sale with Right of Redemption

  • Interest Rate: 18% after Tax Deed sale

  • Redemption Period: 6 months after Tax Deed sale

Connecticut Real Estate Investing

Home prices have increased so much in the last few years that investors have had to reevaluate their exit strategies, which begs the question: Is Connecticut a good place to invest in real estate? To be clear, there's a viable exit strategy to be implemented in any market (up or down), and the Connecticut real estate market is no exception. While it's true, prices have increased dramatically in a short period of time, real estate in Connecticut is still relatively affordable.

If for nothing else, it hasn't run up as much as many states across the country because of its restrictive tax code. While the median home value in the United States increased more than fifty percent in the years following the Great Recession, real estate in Connecticut remained relatively stagnant (increasing closer to five percent). The Connecticut real estate investing community may use the previous stagnation to find deals with attractive profit margins on flips.

However, it needs to be noted that while prices haven't run up as much as in other states, they are historically high for the state of Connecticut. As a result, attractive profit margins are growing harder and harder to find. That's not to say investors can't flip real estate in Connecticut, but rather that a new, more viable exit strategy is emerging: long-term rental properties.

The new marketplace created in the wake of COVID-19 has made long-term rental properties more attractive for several reasons:
  • At 2.84%, interest rates on 30-year fixed-rate mortgages are attractively low. Today's lower borrowing costs may simultaneously offset higher acquisition costs and help Connecticut real estate investors increase monthly cash flow from properties placed in operations. If for nothing else, the less investors have to pay in monthly mortgage payments, the more they can keep from their rent checks.

  • Inventory levels are lower than ever, and competition is making it increasingly difficult to own, even for those who can afford to buy. As a result, more people in Connecticut will be relegated to the renter pool, which decreases the risk of vacancies. Perhaps even more importantly, the resulting demand will allow real estate investors in Connecticut to increase rental prices.

  • The latest increase in home prices has made it more challenging to flip real estate. Acquisition prices are growing to the point that they are detracting from profit margins.

Connecticut Housing Market Predictions

Predicting Connecticut real estate trends is no easy task. Despite a relatively static housing market, there’s always an inherent degree of variance at play. There’s always going to be at least a slight margin of error associated with predicting the housing market, as there are far too many variables that must be accounted for. Nonetheless, it is good practice for investors to keep a pulse on the local market. With an “ear to the ground,” it is possible to make better, well-informed decisions. Consequently, there are a few Connecticut real estate market projections that are more likely to play out than others:

  • The local market will build on recent momentum: For the better part of a decade, the Connecticut real estate market has trailed behind national trends. While not quite stagnant, progress has been made slower than the rest of the country. However, as the calendar gets closer to turning over to 2022, there is a heightened sense of momentum in the market. In particular, the Connecticut real estate market appears to benefit from a high volume of buyers and sellers. It is officially safe to assume real estate in Connecticut will see a lot more activity than in years past.

  • Foreclosure activity will increase: While government aid and forbearance programs have significantly decreased foreclosure filings in the last year, they are set to expire soon. Therefore, it's safe to assume that filings will increase in the Connecticut real estate market once landlords collect past due rents.

  • Home values will increase: The Connecticut real estate market is well below healthy inventory levels. As a result, demand will continue driving prices higher, just as it has for the last 12 months.


The Connecticut real estate market has had a hard time keeping pace with national trends. Real estate activity and home prices have trailed their national counterparts for the majority of the current recovery. Nonetheless, real estate in Connecticut is on the rise, and while it may not be improving at the same rate as the rest of the country, it’s moving in the right direction. As a result, optimism has promoted a more active market, which bodes well for buyers, sellers and investors. The momentum realized in 2020 should continue throughout 2021 and into next year, and help real estate in Connecticut get one step closer to the majority of states across the United States.


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