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As lawmakers attempt to reach a compromise on a bill to grow the state’s housing stock, a new report said that most of the Bay State’s neighbors recently experienced a spike in housing inventory while Massachusetts saw no real change from a year earlier.
The Federal Reserve Bank’s latest Beige Book, a summary of national and regional economic conditions and trends, said Rhode Island, Maine, Vermont and New Hampshire all reported “significant increases” in single-family homes and condos on the market in May.
“In contrast, inventory levels in Massachusetts were comparable to those from a year ago,” the Fed said.
Housing in Massachusetts is inaccessible or unaffordable for many residents as a limited inventory puts even greater upwards pressure on prices. Renters and would-be homebuyers are consistently frustrated and Gov. Maura
Healey last year identified housing as “the number-one issue facing this state,” estimating that Massachusetts has a shortage of about 200,00 units.
In the four other New England states mentioned in the Beige Book, the expansions of houses for sale led to “moderate annual growth in both prices and in the number of closed sales,” and the Fed noted that inventory levels “remain short of a balanced market” despite the recent improvements.
On the commercial real estate side, the Fed’s contacts reported overall flat activity, with stable industrial leasing, steady increases in retail space, and “seasonably slow” office activity. But the outlook for office properties weakened further with the Fed’s sources expecting “a significant increase in foreclosures in the coming 12 months.”
Assessing overall economic activity in the New England region (the report covers all of New England except Connecticut’s Fairfield County), the Fed wrote that “the economic outlook was cautiously optimistic, but selected contacts expressed greater uncertainty related to the demand later this year being potentially restrained by the upcoming election.”
The region’s tourism economy saw “moderate growth” in recent months, with local retailers on Cape Cod saying that the summer got off to a “slightly above-average start” thanks to fewer store vacancies than in recent years.
“Airline passenger traffic through Boston increased moderately year-over-year, with significant gains from Caribbean and European travel. Hotel occupancy in greater Boston rose notably, boosted importantly by the NBA finals and several large conventions,” the Fed wrote. “Tourism and convention activity for Boston in 2024 is expected to grow, and Cape Cod contacts anticipate a seasonably strong summer.”
