With inventory at record lows, real estate agents say they hope market conditions have induced more sellers to list their homes this spring in the hopes of winning high prices.
Recently, Alyx Akers has been driving a bit farther than she used to. Homes remain in high demand in the Pioneer Valley, where she works, and some of her clients can no longer buy exactly where they would like. Some of those longing for a home in Northampton or Easthampton can’t afford those communities, so they’re looking further afield in, say, Longmeadow or West Springfield.
“We’re talking 20 to 30 minutes that they’re adding onto a commute, perhaps, to find something that’s in their price range,” Akers said.
As the residential spring real estate market in Massachusetts begins in earnest, demand and prices in most of the state remain higher than a year ago, pushed to a new stratosphere by the coronavirus pandemic. While real estate agents anticipate more inventory this spring, they say it won’t be enough to satisfy still-high demand, even amid predictions of increased mortgage rates and widespread vaccinations.
Akers, a Realtor at Five College Realtors Northampton, said that as of mid-February, the Pioneer Valley housing marketing was in a deficit mode at all price points. This isn’t surprising. According to data from the Massachusetts Association of Realtors, 65 percent fewer single-family homes were for sale in the Pioneer Valley this February than a year ago, while the year-to-date number of new listings were down 21 percent. That follows strong year–over–year sales numbers and significant price increases in Franklin, Hampden and Hampshire counties according to The Warren Group, publisher of Banker & Tradesman. Akers noted that the deficit of homes priced below $500,000 is particularly deep.
The story on Cape Cod and in Greater Boston is much the same. The supply of single-family homes in Greater Boston dropped from 3.1 months last February to 1.6 months this February, with single-family listings down 24.5 percent. On the Cape and islands, demand pushed median single-family prices up anywhere from 13 percent (in Dukes County) to 25 percent (in Barnstable County).
Demand Expected to Outpace Supply
Despite the dearth of available homes, Akers senses that spring is coaxing more sellers into an incredibly favorable market, especially those with difficult-to-sell properties.
“It’s starting to come up like crocuses,” she said.
Even with more inventory, though, she predicts that the Pioneer Valley’s for-sale listings will remain in deficit territory.
Zur Attias, broker/owner of The Attias Group in Concord, expects a similar trajectory in Greater Boston’s single-family market.
Although higher-end, “executive level” inventory will move somewhat more slowly, “it’s going to feel like there’s no inventory even in the height of the spring market,” he said.
The continued hankering for suburban homes with an office (ideally two, he said) and space for kids to study stems from changes in business and work, rather than to fear of the coronavirus, Attias said. Those changes will remain post-pandemic, he predicted: People want – and will continue to want – a place where they can live and work comfortably while traveling to their normal offices during part of the week.
In this competitive market, finding a home worth half a million dollars or less isn’t simply a Pioneer Valley challenge; it’s a problem in Greater Boston and on Cape Cod. Kathleen Nagle, a Realtor with Kinlin Grover Real Estate specializing in the Outer Cape, thinks inventory trends warrant a conversation about affordable housing. At the same time, she’s optimistic that more homes will come on the market this spring.
“It’s coming,” she said. “People still, right now, know that it is a good time to sell.”
Amid this optimism, Nagle isn’t doing anything new or different to entice would-be sellers into the market. To Attias, the idea that agents could persuade people to sell their homes, even with such a strong sellers’ market, seems far-fetched. Homeowners sell at moments of transition, whether a job change, a divorce or the birth of a child, he said, and little else can compel them to such a large transaction.
Will Vaccines Make a Difference?
After a year of stasis, the country is now in its own transition, with three different COVID-19 vaccines steadily shipping out. With this in mind, Zillow surveyed Americans in February, and 70 percent of homeowners responded that with widespread vaccine distribution, they would be mostly or completely comfortable moving to a new home; only 52 percent felt that way at the time.
Yet over the past few weeks, Akers has noticed a trend paralleling the lack of inventory in the Pioneer Valley: Brokerages and agents appealing to people via social media to list their homes now if selling has been on their mind.
“[The message has been] ‘We have nothing. We need you, sellers, to come out of the woodwork and take advantage of the opportunity that we have here,’ which is to sell quickly and at top dollar,” she said.
Last year, amid talk of “borrowing buyers” from future months and years, she came to see the market dynamic differently.
“[Sellers who are thinking] ‘Oh, we’ll sell our house in the next three years or the next five years’ are accelerating those plans,” she said. “And I think it’s part of why we didn’t run out of houses last year.”
With spring here, sellers are calling her, meaning there may be fewer frustrated buyers this season than she had feared.
Attias expects those prices and demand to remain high in Greater Boston, despite mortgage rates’ recent upward creep. The buyer pool in and around Boston is so deep that he thinks March’s mortgage interest rate increases that pushed the average rate above 3 percent won’t soften the market. And with buyers competing with 10 or 15 other offers with every purchase attempt, Akers expects mortgage rates to be the least of buyers’ worries.
