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Rachel Kelliher stands in front of her parents' Ellington home on Friday. Despite being preapproved for a mortgage, Kelliher hasn't been able to find a house she can afford.
This house at 38 W. Stafford Road in Stafford is listed for sale for $114,000. The 1,214-square-foot home, built in 1921, has three bedrooms and two baths. The listing on Zillow.com notes that rehab and reconstruction of the roof and second floor is needed due to tree damage.
This manufactured home at 325 Kelly Road, Vernon, is listed for sale at $64,900. The two-bedroom, one-bath trailer is in an age-restricted development for those over 55, the listing on Zillow.com says. The home is 732 square feet and has a carport.
This 744-square-foot home at 25 Anchorage Road, Vernon, is listed for sale for $145,000. The two-bedroom, one-bath home was built in 1953, the listing on Zillow.com says.
Rachel Kelliher stands in front of her parents' Ellington home on Friday. Despite being preapproved for a mortgage, Kelliher hasn't been able to find a house she can afford.
When Rachel Kelliher, a 34-year-old single mother from Ellington, graduated from nursing school she thought her new career would propel her to a starter home where she hoped to raise a family, but skyrocketing housing prices have left her and many others in the lurch.
While paying down her student loans, Kelliher was able to improve her credit, refinance her loans, and begin the search for her new home.
“The market is awful; I can’t afford anything,” she said Thursday, adding that homes that only a couple years ago that were going for about $200,000 are now closer to $280,000. “It’s been very challenging and upsetting.”
Kelliher limited her search to Ellington since she wants to keep her son in the local school system and be close to his father, who lives in East Windsor.
Despite being pre-approved for a loan of a little less than $250,000, Kelliher has not been able to find a home that fits her budget. Being a working single mother, she is not able to buy a fixer-upper, she said.
Kelliher is now living with her father in her childhood home, with the hopes of saving enough money to buy a home for which she is still likely to overpay, she said.
With housing vacancy rates at historic lows, Kelliher is not alone in failing to find homes in her price range.
The term “affordable housing” is defined in state statute as housing that costs 30% or less of the annual median income of the municipality in which the home is located.
Real estate listing website Zillow.com listed few homes for sale in north-central Connecticut for $150,000 or less on Thursday afternoon.
• Andover, Bolton, Ellington, East Windsor, Enfield, Hebron, South Windsor, Suffield, Tolland, and Windsor Locks had no listings at that price.
• East Hartford: 5 — 3 manufactured homes, 1 condominium, 1 single-family home
• Vernon: 4 — 2 two condominiums and 2 manufactured homes
• Windsor: 4 — 2 condos and 2 single-family homes.
Department of Housing spokesman Aaron Turner said the state does not formally define a “starter home,” but would “informally consider single-family dwellings (or) condominiums containing two or fewer bedrooms” to meet the definition of affordable as a starter home.
A review of houses listed on Zillow.com shows that while there are several homes in north-central Connecticut costing less than $150,000, many are condominiums, trailers, or in need of significant work that could raise costs substantially.
A new law requires each municipality in the state to adopt an affordable housing plan no later than June 1, and at least once every five years thereafter.
South Windsor adopted its plan in April — the only area town that has done so to date.
This manufactured home at 325 Kelly Road, Vernon, is listed for sale at $64,900. The two-bedroom, one-bath trailer is in an age-restricted development for those over 55, the listing on Zillow.com says. The home is 732 square feet and has a carport.
Because municipalities are just beginning to submit their affordable housing plans, there is not yet a summary or estimate of the number of units that could possibly result from the new law, Turner said.
A study funded through the Department of Housing and released in December 2020 was designed as a “road map” to meet the housing needs of the state’s vulnerable and low-income residents.
After growing for several years, Connecticut’s population has been declining recently. Two-thirds of household growth since 2000 has been in Fairfield, Hartford, and New Haven counties, according to the report. However, the state’s population has declined since 2011 and is aging.
The number of adults between 60 and 74 years old increased by more than 50% since 2000, while populations younger than 19 and between the ages of 35 and 59 have declined. The state’s residents are also becoming more ethnically diverse.
“As populations change, demand for specific housing unit types will likely change as well,” the report states. “For example, an increase in vacant single-family homes in rural areas due to death or out-migration may not meet the demand of new households of international migrants who may prefer smaller or multifamily housing unavailable in many of Connecticut’s suburbs.”
The report adds that older households may be interested in downsizing as children leave, further increasing the demand for accessible housing.
“The affordability shortage is particularly acute for very low-income households, who work in jobs such as childcare workers, cashiers, or are unemployed,” the report states.
At the time the report was released, there were more than 86,000 more very-low-income households than housing units affordable to them.
“No county in Connecticut has sufficient supply of affordable housing units to meet the needs of their very-low-income households, with the largest gaps in Fairfield, Hartford, and New Haven counties,” the report states. Although the total number of very-low income households is expected to decline through 2040, “the decrease will not be enough to close the current gap.”
This house at 38 W. Stafford Road in Stafford is listed for sale for $114,000. The 1,214-square-foot home, built in 1921, has three bedrooms and two baths. The listing on Zillow.com notes that rehab and reconstruction of the roof and second floor is needed due to tree damage.
The authors of the report note that as the study team began its work, “COVID-19 had yet to lay bare the deep housing inequities fracturing the social fabric of our communities, state, and country,” inequities that have since become “undeniable.”
“The need to center equity in housing policy and practice has never been more clear or urgent in Connecticut,” the report states.
Carl Lantz, first vice president of the Connecticut Association of Realtors, said the housing market was in decent shape at the onset of the pandemic as inventory dipped and interest rates were low.
At the time, “there was no pressure to buy” as people were staying put because of the pandemic.
As the pandemic continued, “prices did skyrocket, and now we’re starting to see interest rates go up too,” Lantz said. “You have a double whammy.”
The median sales price of single-family homes in the Hartford region rose 7.4% in April over the previous year, from $300,000 to $322,250, the Greater Hartford Association of Realtors reported Thursday.
Inventory of homes for sale fell 33% year-to-year in April, from 1,302 in 2021 to 872 this year, the group said, while average days on the market fell from 37 to 24.
The increase in property prices leads to high rents as landlords seek to turn a profit off properties that were more expensive to purchase than in previous years, he said.
A new report from Stessa.com, a money management website focused on maximizing profits for rental landlords, says the cost of housing, particularly rentals, have steadily increased from 2019 to 2022, with some rental markets increasing by more than 20% while the nationwide vacancy is just 5.6%.
The median rent in the Hartford metro area is now $1,368, compared to $1,262 in 2019 — an increase of 8.4% in just three years.
According to the report, zoning and density restrictions have made it more difficult to add housing in many locations, both rentals and real estate.
Citing data from Zillow, the report states that there has been a 17% year-over-year increase in rental costs from February 2021 to February 2022. The normal year-over-year increase was between 3% and 5% for most of the previous decade.
Furthermore, landlords are sprouting up in unexpected places, including at Cider Mill Heights Condominiums in Ellington, the condo association’s president, Leslie Haun, said.
She said the roughly 30-year-old complex was intended to be a community that was affordable for young people just starting out.
“The dream was that this was going to be a place where people could buy affordable housing,” Haun said. “It’s slowly changing as investors are coming in and sweeping up units.”
The investors then rent out the units, she said.
She noted that if 50% or more of the complex is occupied by renters, it could jeopardize Federal Housing Administration loans designed specifically for first-time homebuyers.
Haun said the condo association could change its bylaws requiring residency for a year or two before a unit can be rented out, or require landlords to include in their leases mandatory compliance with condo regulations, which could make evictions easier.
This 744-square-foot home at 25 Anchorage Road, Vernon, is listed for sale for $145,000. The two-bedroom, one-bath home was built in 1953, the listing on Zillow.com says.
The lack of overall housing supply is a main contributor to properties being sold at prices higher than they otherwise would, Lantz said, adding that the current housing market is “historic.”
According to the U.S. Census Bureau, housing vacancy rates for both homeowners and renters are at or near historic lows, as shown by the bureau’s recently released Housing Vacancy Survey.
Vacancy rates for rentals are the lowest they’ve been during the 35-year period from 1985 to the start of the COVID-19 pandemic in early 2020. The vacancy rate for homeowner housing is also lower than at any point from 1980 until early 2020.
For the first time in the 66-year history of the vacancy survey, the homeowner vacancy rate has dropped to 0.8%, lower than any point during the 40-year period from 1980 until the start of the pandemic.
The rental vacancy rate in the first quarter of 2022 was 5.8% — higher than the historical low of 5% recorded before 1985, but lower than the quarterly rental vacancy rate at any point during the 35-year period from 1985 through 2019.
Paying more than asking price
Further complicating the market is that inflation has also increased construction costs, and there are also supply chain issues, Lantz said.
The housing shortage is also leading to buyers purchasing homes for far more than their asking price, Lantz said, particularly buyers who were already outbid on homes and bid far more than the asking price to be sure they aren’t priced out of another home.
“There’s a whole lot less to pick from,” he said.
Currently, Lantz advises buyers who are willing to pay $450,000 for a home to begin their search at homes listed at as low as $300,000, with the expectation that the final price will be much higher.
Follow Eric on Twitter @BednerEric.
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Eric covers state government and does special projects. Eric joined the JI in June 2014. He graduated from CCSU, and his hobbies include speaking truth to power and exposing hypocrisy. He is a fan of the New York Giants and Metallica.
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