By Steven Rivkin
The 2020 housing market saw the nation record some of the highest volumes in home purchases ion recent history. It was the year that marked massive price increases in the real estate sector sending massive shockwaves that up to date we are still feeling the impacts. The people who were lucky to get into the market before it went haywire are reaping the biggest benefits.
The increase in sales volume pre and during the covid-19 season were accompanied by two main factors that would later shape the 2021 housing market;
- Inventory shortages.
- Home value increase.
These two factors have caused the home prices to skyrocket beyond reasonable limits in most markets and New Haven Connecticut is no exception.
New Haven Overview
New haven is a larger medium-sized coastal city in the state of Connecticut. It has a population of about 134,023 people and 32 neighborhoods. It is the largest community in Connecticut. One feature you’ll love about this town is that it has a large stock of pre-world war II architecture which makes it one of the nation’s more historic cities.
In terms of demographics, Blacks and Latinos are the most prevalent in the city accounting for 31.2 percent followed by whites who account for 29.5 percent of the population in the city. The Asian community make up 4.9 percent of the city while the American Indian and Alaska Natives account for 0.3 percent.
Interestingly, the city is neither blue-collar nor white-collar but instead a mix of both. In overall however, the New Haven is a city of professionals, service providers and a sales and office workers. Many workers in New Haven work in teaching (10.99%) office and administrative support (9.44%) and sales jobs (7.94%).
Another interesting fact about the city is that a high number of residents are young, single and upwardly mobile professionals. This makes the city a hotspot for relocating single professionals as they have a chance to meet and socialize and have fun with each other.
Given that the city is nautical which simply means that parts of the city touch the ocean or are somewhat historic, it is often a tourist destination city attracting visitors and locals alike.
The Market Profile
There are 49,177 houses or apartments and a median cost of homes of $265,233 according to Zillow. In the past year, homes have appreciated by 17.6 percent.
In terms of the market composition, we see a lot of duplexes, homes converted to apartments or other small apartment buildings. These make up for the largest share of homes in New Haven accounting for 42.63 percent of the city’s housing units. The other types of housing units in New Haven include large apartment complexes or the high rise apartments which account for 33.89 percent, single-family detached homes which account for 19.40 percent and a few row houses and other attached homes which account for 3.95 percent of the city’s stock.
The city is dominated by renters who mostly prefer one, two or no-bedroom apartments. 74.05 percent of New Have’s houses are rental and it makes sense because the majority of people living in New Haven are singles with no families yet.
In terms of age, many homes were primarily built before 1939- almost half of the housing stock in New Haven was built around that time. Data shows that at least 47.74 percent of homes were built around that time. This makes the housing stock in New Haven some of the oldest in the country. That’s not to say there aren’t newer homes as we see that homes built between 1940 and 1969 account for 26.59 percent followed by those built between years 1970 and 1999 which account for 17.74 percent.
Vacancy rates in New Haven is proving to be a problem for the market. At least 11.68 percent of the housing stock in city is classified as vacant. If left unchecked, the vacancy rate in New Haven could be problematic pulling the market down.
Appreciation Rate in New Haven
The annualized rate of appreciation in New Haven averages at 3.77 percent annually. The appreciation rates in the city have been so strong and remain strong that even during the recession period the city’s real estate continued to appreciate in value faster than most of cities and communities. If you look at the latest 12 months, New haven’s appreciation rates continue to be some of the highest in America at 17.76 percent which is actually higher than 88.55 percent of cities and towns in the country.
By just looking at the last 12 months, the short term investors have reaped good returns on their investments in New Haven as the appreciation rates in the latest quarter were 5.73 percent equating to an annual appreciation rate of 24.96 percent.
Comparing New Haven to the rest of the state, the annual appreciation rate is higher than 60 percent of other cities and towns.