🔒CT condo construction hits 15-year low, but some developers bet on demand

Even as condominium construction in Connecticut has slowed to its lowest level in more than a decade, Branford-based developer MB Financial Group is moving ahead with plans to build hundreds of for-sale units.

CEO Michael Massimino said the firm is pursuing new condo projects in response to strong buyer demand and limited inventory. “There’s a lack of inventory for for-sale new construction across Connecticut, and quite frankly, across New England,” Massimino said. “There’s definitely a big demand for a for-sale product.” MB Financial has proposed a mixed-use redevelopment of the former MassMutual office complex in Enfield that would include 157 townhome-style condominiums, along with new apartment units. The firm recently completed a 14-unit condo project in Guilford and plans additional for-sale housing along the shoreline. That activity runs counter to broader statewide trends. Developers built just 225 condominiums in Connecticut last year, according to William Pitt Sotheby’s International Realty — the lowest annual total since 2011 and a steep decline from a recent peak of 1,173 units in 2014. Real estate professionals say that level of construction falls well short of what is needed to ease the state’s housing shortage. “It’s just extremely low inventory, and we have unprecedented buyer demand,” said Kate D’Addabbo, a real estate agent with Coldwell Banker Realty in West Hartford. The imbalance is driving bidding wars and lifting prices across the housing market, particularly for condos in walkable areas with amenities, she said. Data from SmartMLS shows the median condo sale price in Connecticut has nearly doubled over the past decade, rising from $159,000 in 2016 to about $300,000 in 2025. At the same time, annual sales have dropped by nearly one-third since peaking at 11,662 units in 2021, as fewer condos have come to market. “After the 2008-2009 real estate downturn, there was about a 10-year period where very little building was happening,” D’Addabbo said. “We should have been building and anticipating this higher demand, but we didn’t.”

Development hurdles

Developers cite several barriers to building more condos, including high land and construction costs, lengthy approval processes and financing challenges. Those challenges are especially pronounced in towns like West Hartford, where land is limited, approvals can be slow and prices are already high, D’Addabbo said.

She is listing condo units at Center Park Place, a 58-unit development under construction in West Hartford, with prices ranging from $1.2 million to $2.5 million — far above the statewide median. Financing is another hurdle for condo development.

Christopher Arnold, commercial real estate manager at Middletown-based Liberty Bank, said most developers are instead pursuing apartment projects, which are easier to finance and lease in a high-interest-rate environment. At the same time, higher borrowing costs have made monthly payments and down payments more difficult for potential condo buyers, he said. “All the activity’s been more on the rental side, with very little on the build-to-sell side,” Arnold said. “Renting has offered a lot of flexibility to people.” Condo developments also carry added risk for lenders, he said. Banks typically finance the condo construction and rely on unit sales to repay the loan, often requiring a significant share of units — usually about 50% — to be sold. If sales are slow or interest rates rise during that period, the lender’s exposure increases, making condo projects less attractive. “We’ve seen evidence of emerging demand, but we just don’t know how deep the market is for condos yet,” Arnold said. Limited supply is also tied to homeowners choosing not to move because they are reluctant to lose their low mortgage rates in a higher-rate environment, D’Addabbo said. “The sellers I see are selling for a reason,” she said. “If somebody has a big house and they’re downsizing, they’re still paying a lot of money for that downsize.”

Existing pipeline

Despite those headwinds, some condo projects are moving forward. In Stamford, national homebuilder Toll Brothers received approval in December to build 120 condos on a 20.3-acre parcel on High Ridge Road, next to a former Gen Re office building that has been approved for conversion to 196 apartments by another developer.

In West Hartford, Arapahoe Group LLC is building the Center Park Place condos as part of a mixed-use, in-fill development. A 36-unit condominium building has been proposed at 126 Howe Ave. in Shelton, where developers Christen L. Perry and Benjamin W. Perry Jr. are seeking to rezone a 0.76-acre property to allow a four-story, 44,880-square-foot project with a mix of one- and two-bedroom units. MB Financial Group is also planning additional for-sale housing across the state, Massimino said. “You’re going to see a lot come to the marketplace from us over the next three to five years,” he said.