Single-family home sales in the Greater Springfield area were down 15 percent during the third quarter of 2002 compared to the same period last year. This 2-year-old home in East Longmeadow has approximately 3,000 square feet of living space and is currently listed for sale at $479,900.

Home prices in the Greater Springfield area may be lower and land for new housing development may be more plentiful than other parts of Massachusetts, but local Realtors are still dealing with a situation that other Bay State real estate agents have complained about for some time now – a shortage of houses on the market from which prospective buyers may choose.

Yet, while real estate agents in other parts of the state, particularly the Greater Boston area, are reporting a shift in the real estate market – with homes lingering on the market longer, more listings becoming available and, in some cases, reductions in asking prices – Realtors serving communities in Hampden County report that there hasn’t been a significant build-up of inventory.

The low supply of houses available for sale may be one reason that single-family home sales plunged 15 percent in the Greater Springfield area during the third quarter this year, compared to the same period last year. At the same time, the average selling price for a single-family home climbed nearly 12 percent to $165,727 from $148,400, according to the Greater Springfield Association of Realtors, whose members serve 28 communities.

“I think the main reason [for the sales drops and price increase] is lack of inventory,” said Marilyn Ghedini, president of GSAR. “There is an abundance of buyers and not enough housing on the market.”

Ghedini, the sales manager of Carlson GMAC Real Estate in Springfield, said the greatest demand is for homes priced under $300,000. Homes priced under $300,000 take a few days or a week to sell, while homes priced higher stay on the market longer, she said.

That appears to be true across the state as well. Even though it took about the same amount of time – 60 days overall – to sell homes that were listed for sale during the first nine months of 2002 compared to the same time a year ago, single-family homes priced under $350,000 generally sold more quickly this year, according to statistics provided by the Multiple Listing Service-Property Information Network. Homes priced higher than $350,000 stayed on the market an average of about 10 days longer during the first nine months of this year compared to a year ago.

The more expensive single-family homes – those priced over $700,000 – took much longer to sell. For example, homes priced $1 million or more took almost a month longer to sell – 93 days compared the 68 days it took to sell similarly priced homes a year ago. Homes priced $800,000 to $900,000 stayed on the market 84 days, about two and a half weeks longer than a year ago.

In Hampden County, there were 1,041 single-family home sales during the third quarter, down from the 1,225 homes sold during the third quarter of 2001, according to GSAR. Year-to-date sales statistics collected so far, however, indicate that single-family home sales in Hampden County are practically unchanged from last year, with a slight drop in condominium sales.

There were 3,368 single-family home sales in Hampden County through September of this year, up slightly from the 3,276 home sales recorded during the same months last year, according to The Warren Group. The Warren Group, parent company of Banker & Tradesman, collects sales statistics from registries of deeds across the state, including for-sale-by-owner transactions, which are not reflected in the MLS-PIN figures.

Condo sales in Hampden County dropped slightly during the first nine months of the year. There were 460 condo sales this year, compared to 464 through September one year ago, according to The Warren Group.

Favorable Comparisons

Even though Ghedini has heard that Realtors in Worcester and other areas are experiencing a softening real estate market, she said, “We haven’t seen that yet.”

Part of the reason that the Greater Springfield area hasn’t been as affected as other parts of the Bay State is that homes in the region are much more affordable.

“We still have an average price that is $165,000. That compares favorably to most other parts of the state,” said Ghedini.

The median price for single-family homes sold in Hampden County in 2001 was $114,450, according to The Warren Group. In contrast, the median price for single-family homes sold in Middlesex County in 2001 exceeded $300,000, while Worcester County’s median single-family home price was $171,000.

Karen Wallace, a broker-owner of Sullivan & Wallace Real Estate in Brimfield, said prices still seem to be high and stable. A house comparable to one that sold in March for $179,000, would sell for $200,000, said Wallace. “That’s a significant increase for four months,” she said.

Single-family home prices in Hampden County rose 4.4 percent during the first eight months of 2002 compared to a year ago. The median price for single-family homes sold from January through August was $118,000, compared to $113,000 during those same months one year ago, according to The Warren Group. Meanwhile, condo prices rose 8.8 percent during the same months from $79,000 to $86,000.

Wallace, who has been in the real estate business for 17 years, explained that several years ago it was extremely rare to sell a $300,000 house in the 15 communities she serves, including towns like Ware, Brookfield, Warren and Brimfield. Today it’s not so rare because the region has a lot of developable land and buyers are building custom homes.

Many of the buyers purchasing homes priced $300,000 and higher are locals who want to trade up to larger houses. But the area also has a huge market of buyers from Eastern Massachusetts. It’s not unusual, for example, to have buyers who commute to jobs in Framingham and Worcester.

Also, many investors from Worcester are purchasing multifamily properties in the Springfield region for about half the cost of what they would find in their local market, according to Ghedini.

That buyer interest often means that some for-sale homes in the Springfield area, particularly homes that are priced “well,” are still drawing multiple offers, she said.