COVID-19’S EFFECT ON CITY/SUBURBAN MIGRATION By: Francesca Micallef & Jamie Hickey
T
he COVID-19 pandemic affected the housing market worldwide but specifically had an effect on migration from the city to the suburbs in Connecticut. According to the Hartford Business Journal, more than 27,000 people moved from New York City to Connecticut in 2020. Many people who lived and worked in New York City started working remotely due to COVID-19. Being able to work remotely gave civilians the opportunity to move to the suburbs, specifically, in Connecticut. With the demand for Connecticut homes increasing over time during the pandemic, a question arises: Are there enough homes for sale to meet buyer demand? An increase in demand causes prices to increase. Buying a house in Connecticut during the pandemic is more expensive than doing so pre-pandemic, but this is great for the sellers. According to Redfin, home prices statewide were up 3.4 percent year over year in October. At the same time, the number of homes sold fell 19.2 percent, and the number of homes for sale fell 32.7 percent.
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Figure 4: Median Sale Price for CT Homes Year-Over-Year Change
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Figure 5: Home Sold Above List Price in CT Year-Over-Year Change
The general trend of the median sale price for Connecticut homes, as seen in Figure 4, has been increasing over the past three years. This corresponds with the percent of homes sold above list price also increasing over time (see Figure 5). The demand for houses has increased the sale prices, which in turn has caused homes to sell above list price. The issue that arises is the supply of homes for sale. As seen in Figure 6, generally, the number of homes for sale in Connecticut has decreased. Because there are fewer houses available for sale, the prices of the houses on the market have increased because demand is greater. As seen in Figure 4, the median sale price for Connecticut homes has increased over the past three years. The median sale price is significantly higher now compared to before the pandemic hit. The highest median sale price was $340,000 in June of 2021. Figure 4 shows that the pandemic had a significant impact on Connecticut homes’ median sale price. The direction and pace at which home prices are changing are indicators of the strength of the housing market and of whether homes are becoming more or less affordable. The median price of a U.S. home is currently $305,000.
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CONNECTICUT ECONOMIC ACTIVITY REPORT • WINTER 2022
Figure 3
Figure 6: Number of Homes for Sale in CT Year-Over-Year Change
