With the end of the year in sight, and new horizons peeking around the corner, it’s the perfect time to assess the current state of the Fairfield, CT, real estate market and set predictions for the coming year. As it currently stands, the seller’s market has peaked, hitting a standstill as high home prices and mortgage rates continue to deter buyers from the market. With the ongoing back-and-forth conversations regarding a potential housing bubble, paired with the mounting pressure on the dwindling housing supply, buyers are understandably trapped in a state of uncertainty.

Fortunately, the new year is highly likely to bring good tidings – for both buyers and sellers. Our guide analyzes the current trends and what buyers and sellers should expect in 2023 as a result.

Home Prices Set To Steadily Decline

Work-from-home arrangements, brought on by the onset of the pandemic, led to a surge of buyer interest as people sought to relocate to homes with more space and comfort. From 2020 to 2021, the average price for single-family homes soared by 13% – a staggering increase. Since then, prices have still continued to increase, but as the year comes to an end, experts predict the prices will plateau and steadily decline as sellers brace themselves for a new selling season in the spring. High interest and mortgage rates have largely kept buyers at bay, but that may soon change as sellers lower their prices little by little to renew interest.

Fortunately, high interest rates have minimal impact on the luxury real estate market. Luxury properties are expected to continue selling well, as rates are comparatively low compared to historical numbers. Sellers will continue to profit in both luxury and normal real estate markets.

Demand Continues To Exceed Supply

Supply has become a nationwide concern. As millennials and Gen Z join the hunt for homes, demand will continue to climb and exceed supply. The construction of new homes is simply not fast enough to keep up, especially with labor shortages and complications with securing supply chains.

High demand is what will keep home prices high, even with predictions of stagnation and marginal decreases. Competition is expected to persist, and buyers must prepare to outbid one another for a chance to buy a home.

Consider the MLS’s year-end report; their results found that the months’ supply of housing inventory in 2021 dropped sharply by 38% from 2020 to a whopping one and a half months. It’s a historic low, especially with sustained depletion.

A Market Snapshot

How does Fairfield, CT, real estate currently fare under these conditions? Overall, the median price of Fairfield real estate as of November 2022 was around $650,000. Let’s take a look at the following market snapshot from Matthew Hyde:

Single-family homes for sale in Fairfield, CT, can go for as little as $250,000. Luxury manors and estates, on the other hand, command much higher prices, with list prices of up to $15 million. These luxury properties are truly gorgeous and one-of-a-kind, with multiple bedrooms and bathrooms, marble flooring, fireplaces and skylights, cabanas and saunas, tons of outdoor space, and the added bonus of breathtaking views of the bay.

Buyers will also find quaint multi-family homes for sale in Fairfield County, CT. These larger plots range between $440,000 to just under $1 million. Fairfield is home to beautiful and charming condos and townhomes as well. These units are valued between $200,000 and $1.5 million, depending on the amenities and location. Purchasing a parcel of land is another option. Land prices typically range from $200,000 to $4 million for larger plots adjacent to the water.

As demand increases, Fairfield’s supply is set to soon run out. If Fairfield, CT, real estate has caught your eye, it’s strongly recommended that you act sooner rather than later.

Cost Of Living In Fairfield

The cost of living in Fairfield is roughly 55% higher than that of the national average and 40% higher than the average in Connecticut. The overall cost of living can be broken down into the following major components: housing, utilities, transportation, groceries, and health.

• Housing is 121.1% higher than the national average. Rent is higher as well, with the average rent for a studio apartment at about $1,520, while the national average stands at $949. Depending on the number of bedrooms, the average rent increases between $300 to $400 for each one.

• Utilities are 23.3% higher than the national average, and transportation is 35.8% higher.

• Groceries are only 8.6% higher than the national average. As for healthcare, services and prescriptions total to 26.8% higher.

Fairfield residents benefit greatly from a much higher median income. On average, Fairfield households earn $120,000 in income, compared to the national median income of $57,000. Residents are generally wealthy and enjoy a high quality of life in this charming city. Annual expenditures depend on the exact size of the household, including the number of dependents.

The Final Verdict

All in all, 2023 is expected to be a promising year for buyers and sellers alike. Millennials and Gen Z have taken to the market, hoping to settle in a starter home while there’s still any supply left, and the steady decline in home prices might just be enough to convince them to buy. Sellers will continue to enjoy profitable deals even as they lower prices to renew buyer interest, and experts are confident the market will only cool and slow down.

Now is the time to consider if buying or selling a Fairfield home is the right move for you in the coming year. If you have questions or are interested in additional counsel, reach out to Matthew Hyde. Matthew is a passionate real estate agent based in the Fairfield region, with over 100 homes recently sold and $47 million in recent sales backing him. His expertise is invaluable, and his commitment to client satisfaction is even more so. Connect with him today to get started!