As physical workplaces closed during the pandemic and Americans became more comfortable in their makeshift home offices, many people began to rethink the places they called home. And Connecticut is growing in popularity.
The state’s housing market has seen a surge in the past year. Sales are up more than 30 percent and the market is showing no signs of slowing, so Berkshire Hathaway House Services.
The hot real estate market was celebrated by Governor Ned Lamont and other officials pointing out the state’s economic growth. In fact, Connecticut Comptroller Kevin Lembo recently forecast a General Fund surplus of $ 306.9 million thanks to the market.
Overall, Lembo said these signs were positive, but the boom could have unintended effects.
Average sales prices rose by 23.1 percent last year, but rental prices also rose by almost 12.5 percent.
“The housing market can be great for the seller. The buyer pays a little, but more than he should, ”said Lembo. “But the available housing stock is the problem. First-time homeowners have fewer options and rental prices are starting to rise. ”
Tenants benefit least from the booming housing market. In Connecticut, 35 percent, or nearly 500,000 households, rent their homes. And during a pandemic with thousands reporting financial difficulties, Lembo said the situation was far from ideal.
“In the worst-case scenario, the people who can least afford it are caught in this bind,” said Lembo. “It is not in our interests as a state from an economic point of view or from a public health point of view to allow people to go homeless or to double or triple themselves with family and friends.”
More than 80,000 Connecticut residents say they are behind on rent. And more than 25,000 said they are likely to have to leave their current home for an eviction within the next two months US Census Bureau Household Pulse Survey. Lembo said these numbers illustrate the state’s housing problems; Problems that should affect the whole community.
“When people are displaced, it can lead to job losses, children have to change schools and have psychological problems,” said Lembo. “On the other hand, from a strictly dollar and cent perspective, home values are being pushed down. If you are in this area, you could have a problem with your house value. ”
It’s an issue that affects not only tenants and landlords, but also those who may not be involved in the rental market. When individual households are injured, entire neighborhoods can feel the effects, Lembo added.
While Connecticut’s forecasted General Fund surpluses can’t go directly to housing construction right now, Lembo says, he sees it as a good sign for housing advocates to push for the next budget. And work towards stabilizing housing in the country for everyone.
“We are a community, we are a small state, and these needs weigh on us all. As a state we want to keep our young people, but how do we do that if they cannot find affordable housing? “