A hiker poses for a photo at the Berkshires’ Bash Bish Falls. The area’s scenic beauty and relative seclusion have helped draw legions of out-of-area buyers looking to work remotely.
Desperate buyers waiving home inspections and going way over asking in no-holds-barred bidding wars.
Big price increases and a steadily shrinking pool of homes available for sale.
No, it’s not Greater Boston we are talking about here, but rather Western Massachusetts, which has long lived in the shadow of the state’s more prosperous and populous eastern half.
The tidal wave of homebuying unleashed by the pandemic in the suburbs of big urban markets across the country has reached bucolic, quirky and cultured Western Massachusetts.
From Northampton to Stockbridge, home prices have posted dramatic increases not seen in a generation or more, driven by an influx of buyers hailing from everywhere from Boston to Las Vegas and California.
“Oh my gosh, just about every house that comes on the market we are seeing bidding wars over,” said Kathy Zeamer of Jones Realty, who works out of an office in Amherst. “It’s not just two or three – we are talking 18 to 20 offers on the table.”
The last time Western Massachusetts saw a flock of out-of-town buyers descending on the region were in the months after 9/11, Zeamer noted.
And even that increase likely didn’t come close to the kind of sea-change the region’s real estate market has seen since COVID-19 arrived in full-force in the U.S. a little over a year ago.
Longtime real estate agents with decades of experience have never seen anything like it, Zeamer said.
Prices Suddenly Spiked
The numbers certainly bear that out, with Western Massachusetts home prices barely budged – and in some cases even declined – from 2005 to 2015.
While the last few years have been marked by modest growth, the pandemic turbo-charged home prices in Western Massachusetts, with gains over the past 12 months equal to the previous four years.
Just take the four counties that make up the region: Franklin, Hampshire, Hampden and Berkshire.
The median sale price in Berkshire County hit $185,000 in 2005, dropped to $180,000 in 2010, before rebounding to $185,000 in 2015, according to stats from The Warren Group, publisher of Banker & Tradesman. By the end 2019, Berkshire’s median had risen to $215,000 – that is before exploding in 2020 to just under $250,000.
The pandemic price increase was a bit less dramatic in Franklin County, home to Greenfield and Shelburne Falls. The median sale price in the rural county actually fell from 2005 to 2015, from just over $190,000 to $185,000 in 2015, Warren Group numbers show.
Prices began rising again after this, with the median hitting $224,000 in 2019 before rising $16,000 in 2020 to a new median of $240,000.
Same story with Hampden and Hampshire as well.
Hampden County, home to Springfield, the state’s third largest city and one of its poorest, had the same median price in 2015 that it had in 2005: $180,000.
By 2019, the median price in Hampden had clawed its way up to $207,500 before surging to over $227,000 in the pandemic year.
And in Hampshire County, which includes ultra–progressive and affluent Northampton and Amherst, the median price in 2015, at $250,000, was $9,000 lower than it had been in than it had been in 2005, Warren Group numbers show.
After rising to $280,000 in 2019, home prices across Hampshire sprinted ahead in 2020, adding another $21,000 and pushing the median to $301,000.
Buyers with Money to Burn
So, what’s driving this big increase in Western Massachusetts home prices?
Just call it the collision of a long-term trend – the increase in remote work in our increasingly wired society – with a deadly pandemic that overnight emptied out offices and other traditional workplaces.
Much of the new demand for home in the region is being driven by professionals and others who can work remotely are looking to escape more cramped urban confines. The Berkshires, long a favorite vacation destination for Bostonians and New Yorkers alike, is just one of many bucolic destinations around the country that these buyers have flocked to.
“Over the last 12 months, I have had more buyers from New York City and Boston than I have had in my 13 years in real estate,” Zeamer said. “I have buyers from California. I have sold a house to a couple from Las Vegas.”
Still, Zeamer worries rightfully about the influx of buyers from out the region, many of whom have cash to burn from sales of homes in more expensive markets.
They can afford to pay cash, effectively outbidding local buyers with solid credit but who still need to take out a mortgage.
And as prices soar, home sellers are reluctant to put their castles on the block, worried they won’t be able to buy anything, adding to a shortage of listings that, in a vicious circle, is putting further upward pressure on prices.
Zeamer is betting that as the vaccine rollout moves ahead, and more and more people get their shots, the buying fever will subside somewhat.
Scott Van Voorhis
“This is not sustainable, and I don’t think it’s going to last,” she said.
Too often ignored or treated like a poor relation by Greater Boston, it’s great that Western Massachusetts is finally getting its due.
But there is such a thing as too much attention.
Cape Cod offers a cautionary tale here, another region of breathtaking natural beauty that is now slowly choking on the exhaust fumes from the cars and campers driven by its legion of admirers.
Western Massachusetts has a long way to go before that happens, but here’s hoping we not seeing the beginning of that trend now.
Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
