The affordability squeeze is real

Affordability is what everybody is talking about, especially in Connecticut, and I’m watching it decide outcomes.

A young couple I’m working with got preapproved. Then they found a house they loved, and when we went to write the offer the property taxes were high enough that their lender had to lower the preapproval to absorb them. That took them out of contention and dropped them into a price point that barely exists in most of this state.

Another buyer ran the true monthly numbers on a condo in the low $300s. High property taxes, plus $300 to $400 a month in HOA dues. A good month would be close to break-even with nothing left over for repairs. They walked, and they were right to.

It isn’t only the entry level. A downsizer I’m working with has written strong over-asking offers on modest three-bedroom homes and been outbid by close to $100,000. When the right house almost never comes up, everybody goes all in the day it does. The premium on homes under $500,000 is extreme.

The numbers match what I’m seeing. Connecticut homes sold just under 4% over list on average in July, and fewer new homes came on the market than a year ago. Here’s the part that stings: by the standard measure of whether a typical local family can afford a typical local home, Connecticut has slipped under the line. Less supply, higher prices, tighter budgets, all pulling the same direction.

If your budget is tight, run the real monthly payment with taxes in it before you fall for a listing.