The Housing Crunch in Southern New London County: Navigating Challenges and Opportunities

Southern New London County, Connecticut, is experiencing a significant housing shortage that’s affecting residents across the spectrum. From first-time homebuyers to growing families and retirees, the lack of available housing is creating challenges for many. This shortage, coupled with recent economic developments in the area, is reshaping the local real estate landscape. Let’s dive into the current situation, explore its causes and effects, and discuss potential solutions, including the benefits of downsizing.

The Current Housing Market

As of February 2025, the housing market in New London County is showing signs of intense pressure:

According to Rocket Mortgage, the median home sold price has risen to $360,718, an 11% increase from the previous year. Available housing inventory has decreased by 6% from January to February 2025, with only 721 homes for sale in the county. The number of new listings has dropped by 22.8% in the same period.

These statistics paint a picture of a market where demand far outstrips supply, leading to rising prices and fierce competition among buyers. The shortage is particularly acute in certain segments of the market, with inventory decreases across all bedroom types, ranging from a 1.9% decrease for 2-bedroom homes to a 20% decrease for 1-bedroom properties.

Economic Boom Meets Housing Bust

Paradoxically, the housing shortage is occurring alongside significant economic growth in the region. Two major developments are poised to bring thousands of new jobs to the area:

Electric Boat’s Hiring Bonanza

General Dynamics Electric Boat, the submarine manufacturer based in Groton, has been on a hiring spree. While the pace has slowed slightly due to supply chain issues, the company still plans to hire 3,000 new employees in 2025. This comes on the heels of 5,300 hires in 2023 and 4,100 in 2024, totaling an impressive 12,000 new jobs over three years. Patch.com reports that the majority of these positions are at the Groton facility, putting additional pressure on the local housing market.

Great Wolf Lodge at Foxwoods

Adding to the economic excitement, construction is well underway for the new Great Wolf Lodge resort at Foxwoods. Set to open on May 23, 2025, this 91,000-square-foot indoor water park and family entertainment center is expected to bring hundreds of jobs and attract hundreds of thousands of tourists to the area. The resort, built on 13 acres adjacent to Foxwoods Resort Casino, currently represents the largest private construction project in the state.

While these developments are undoubtedly positive for the local economy, they also exacerbate the housing shortage by increasing demand for both rental and purchase properties.

The Ripple Effects of the Housing Shortage

The lack of available housing is having far-reaching effects on the community:

Rising costs are making it difficult for many residents to afford housing, with 29,000 low-income households in southeastern

Connecticut living in housing they can’t afford.

The rental market is particularly tight, with over half of the projected 7,200 additional households in the region expected to be renters.

Cost-burdened households have increased by about 50% since 2000, with 48% of renters and 30% of homeowners now spending more than 30% of their income on housing.

The mismatch between household sizes and available housing is becoming more pronounced, with 56% of households consisting of one or two people, but only 40% of the housing stock having two or fewer bedrooms.

The Benefits of Downsizing

Given the current market conditions, downsizing presents an attractive option for many homeowners, particularly empty nesters and retirees. Here are some of the benefits:

Freeing up larger homes for families: By moving to smaller properties, downsizers can help alleviate the shortage of family-sized homes in the area.

Reduced costs: Smaller homes generally come with lower mortgage payments, property taxes, and maintenance costs.
Energy efficiency: Smaller spaces are often more energy-efficient, leading to lower utility bills and a reduced carbon footprint.

Less maintenance: Smaller properties typically require less upkeep, freeing up time and energy for other pursuits.

Potential for profit: In a seller’s market, homeowners may be able to sell their larger homes at a premium and purchase a smaller property with cash to spare.

For those considering downsizing, it’s important to work with a knowledgeable real estate professional who can help navigate the current market conditions and find the right property to meet your needs.

Addressing the Housing Shortage

Solving the housing crisis in Southern New London County will require a multi-faceted approach.

Some potential solutions include:

Zoning reform: Connecticut lawmakers are considering legislation to address restrictive local zoning laws that make it difficult to build multifamily housing[7].
Expedited permitting: Governor Ned Lamont has called on the General Assembly to speed up the permitting process for new housing construction[7].
Increased construction: Encouraging developers to build more housing, particularly multifamily and affordable units, is crucial to meeting demand.
Adaptive reuse: Converting unused commercial or industrial spaces into residential units could help increase housing stock.
Support for first-time homebuyers: Programs to assist first-time buyers could help more residents enter the housing market.

Looking Ahead

As Southern New London County continues to grapple with its housing shortage, it’s clear that creative solutions and community-wide efforts will be necessary. The economic growth driven by Electric Boat’s expansion and the new Great Wolf Lodge presents both challenges and opportunities for the region.

For current homeowners, particularly those in larger properties, now may be an ideal time to consider downsizing. Not only can this move benefit individual homeowners, but it can also help address the broader housing needs of the community by freeing up family-sized homes.

For those looking to buy or rent in the area, patience and flexibility will be key. Working with experienced real estate professionals who understand the local market can help navigate the challenges and find suitable housing options.

As we move forward, it’s crucial for local leaders, developers, and residents to work together to address the housing shortage. By taking a proactive and collaborative approach, Southern New London County can create a more balanced and sustainable housing market that meets the needs of all its residents, from young families to retirees.

The housing market may be challenging now, but with the right strategies and community effort, we can work towards a future where everyone in Southern New London County has access to safe, affordable, and appropriate housing.

Citations:
[1] https://rocket.com/homes/market-reports/ct/new-london-county
[2] https://news.clearancejobs.com/2025/02/13/electric-boats-hiring-boom-3000-jobs-open-in-2025-as-submarine-workforce-expands/
[3] https://www.cbia.com/news/member-news/foxwoods-great-wolf-lodge-2/
[4] https://newlondonct.gov/filestorage/7433/29472/29876/2022_Affordable_Housing_Plan.pdf
[5] https://patch.com/connecticut/groton/electric-boat-hire-3k-workers-2025
[6] https://www.hartfordbusiness.com/article/construction-to-begin-on-new-great-wolf-lodge
[7] https://ctmirror.org/2025/01/09/ct-legislators-2025-housing-agenda/
[8] https://www.hartfordbusiness.com/article/supply-chain-issues-will-pause-electric-boats-hiring-frenzy-in-2025-new-president-rayha
[9] https://www.foxwoods.com/things-to-do/activities/choose/great-wolf-lodge/

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About the Author

Bridget Morrissey is not just a local Realtor but a multifaceted professional dedicated to her community. In addition to her real estate expertise, she’s the author of “Nautical Tales & Nature Trails, Recreation in southeastern Connecticut and southern Rhode Island,” available on Amazon. She also produces the Public Access TV Show of the same name, sharing her passion for local landscapes and communities. Whether you’re looking to sell your home or find your dream property, Bridget Morrissey’s comprehensive approach ensures you receive insightful guidance throughout your real estate journey.