Entry-level homebuyers have increasingly become a major force in the national housing market. According to Genworth Mortgage Insurance’s First-Time Homebuyer Market Report, homeownership neophytes accounted for 38 percent of the single-family homes sold and 57 percent of purchase mortgages originated in the U.S. during the first quarter of this year.
Closer to home, Fairfield County’s housing market has become a magnet for many entry-level homebuyers.
“Fairfield County’s entry-level houses are selling quickly with multiple offers,” observed Candace Adams, CEO of Berkshire Hathaway Services New England. “The higher the price, the more difficult it is to sell.”
However, Fairfield County is hardly a homogeneous market when it comes to pricing entry-level housing.
“Entry-level means different things to different people,” said Scott Elwell, Douglas Elliman’s senior executive regional manager of Westchester and Connecticut. “Greenwich and Wilton have very diverse offerings. A condo in Greenwich can go for $500,000 while houses in Wilton can go for similar pricing.”
But just over the Wilton town line in Westport, prices on entry-level residences are significantly higher.
“Obviously, it is different in Westport,” stated Linda Skolnick, a Realtor in Coldwell Banker’s Westport office. “Entry-level houses here can range from between $600,000 to $1 million. We don’t have houses at $500,000. There are some at $600,000 and a lot of condos, but very few houses.”
So, where are the best places for entry-level homebuyers in Fairfield County? Adams noted that Greenwich’s “lower-priced properties are still selling,” although Stacey Loh, executive vice president of the Greenwich Association of Realtors, noted that pricing in her town’s entry-level housing market is uncommonly wide.
“Price points range from $300,000 up to $800,000 in our market,” she said. “Generally speaking, the median price is close to $2 million. When the lower-priced houses come on and are priced fairly, there are buyers to scoop them up.”
Melissa Rwambuya, a senior sales associate with William Raveis’ New Canaan office, promoted New Canaan as a popular location for entry-level homebuyers who are looking for residences at the higher end of the spectrum.
“In the past 12 months, we’ve either sold or (had) pending sales on 89 properties between $700,000 and $1.25 million,” she said.
She added the town “definitely has a lot to offer first-time homebuyers. New Canaan taxes are lower than the surrounding towns and we are a wonderful walking town — walkability is very high on the list of millennials who are used to walking around Brooklyn or Manhattan. And unlike other towns around us, New Canaan has a very, very attractive downtown.”
Cynthia Hughes, a Realtor with Coldwell Banker in Danbury, pointed out that northern Fairfield markets are offering entry-level homebuyers lower property taxes than the markets to the south along with access for traveling to lucrative jobs in New York City.
“I commuted into the city for 30 years,” said Hughes, a Danbury native. “We are close to the rail line. Bethel has its own train station, and in Brookfield you can just jump on I-84 and go right over the border. We have a high level of commuters.”
On the eastern side of the county, Mark Markelz, a real estate agent in William Raveis’ Southport office, held up Shelton as a hot spot for entry-level homebuyers.
“Shelton is coming in at a median price point of $350,000,” he said. “It has lower property taxes compared to other communities and it has built up a strong business market over the years.”
Craig Oshrin, a Stamford-based Realtor with Coldwell Banker, praised Trumbull as a “hotbed market” with entry-level properties priced in the $350,000 to $500,000 range, adding that the town’s school system is a magnet for young families. He also noted next-door Bridgeport has been a growing player in the entry-level housing market, and talk within the city’s government on lowering property taxes could help strengthen its appeal.
Phil Kuchma, president of the Kuchma Corp. in Bridgeport, noted that the city’s housing prices were attractive to “people who have not yet had the opportunities to save a lot of money for a down payment or move up in the employment market.” But he admitted that a downside was the underfunded Bridgeport public school system, a situation exacerbated by problems in tapping the city’s real estate scene for revenue.
“The city has a lot of nonprofit, government and churches. Less than 50% of Bridgeport’s grand list value pay the real estate taxes,” he said. “It is very, very difficult.”
Coldwell Banker’s Hughes commented that those going for the lower-priced properties are opting for 3% conventional mortgages rather than 3.5% FHA mortgages, and there is very little hesitation for making a purchase.
“If a property is in good shape, it typically sells in four days,” she said.
Oshrin found the entry-level homebuyers are not intoxicated by HGTV programs extolling the fun in renovating old properties. “Millennial buyers don’t want to do major updates and renovations,” he said. “They want move-in ready.”
The condo market is also highly appealing to this crowd. “The condo market is very strong,” said Douglas Elliman’s Elwell. “People want convenience, being located right off the train line and not worrying what happens outside.”
And Wayne Frankel, CEO and regional owner of Greenwich-based Exit Realty of Connecticut, glumly acknowledged that entry-level homebuyers have to gird themselves to the state’s higher-than-average property taxes and the effect that SALT, the cap on using state and local taxes as deductions on federal income tax returns, has had on the local real estate market
“The Trump tax plan affects everyone,” Frankel said, referring to the changes to the federal tax law that put a $10,000 cap on the amount of state and local taxes, including property taxes, which can be taken as deductions on federal returns. “Property taxes are so high in Connecticut, even in the entry-level market.”