01/21/2018
Massachusetts home prices reached record highs last month. So why aren’t more people selling?
The supply of single-family homes and condominiums in the state — particularly in the Boston area — continues to be stubbornly low, mostly because potential sellers appear stuck in a frustrating cycle — selling might be easy, but buying a new place to live in a market with overcrowded open houses and bidding wars is discouraging. That’s keeping would-be sellers on the sidelines.In May, median prices for single-family homes reached a new peak of $385,000, a jump of 9.2 percent compared with May 2016, according to the Massachusetts Association of Realtors. In Greater Boston, last month’s numbers were even more dramatic — single-family homes hit a record median sale price of $600,000, 13.1 percent more than in May 2016, according to the Greater Boston Association of Realtors.
But sales volume was off 2.3 percent statewide compared with last year, and down 2.2 percent in 64 cities and towns in Greater Boston. There were similar price and sales trends in the condominium market.
“They know that inventory is low and they are participating in conversations [about homes that] went on the market [and] in five days they got multiple offers and got more than asking price,” he said. “What is happening is realtors will give an honest assessment of value based on current market conditions, past sales, and homes currently under agreement, and the seller will say, ‘Let’s try for this higher number.’ And if it’s too high, it’s not going to sell.”
David McCarthy of Keller Williams Realty in Boston calls the state’s superheated real estate environment “a perfect storm.” Jobs are driving population growth, particularly in the Boston area, he said, and that’s driving up housing prices and affecting inventory.
In the meantime, suburban empty-nesters are discouraged by a market in which small homes closer to the city cost as much — or more —than the property they’re considering selling. That financial reality prompts many to stay put, McCarthy said.
To help ease the gridlock, McCarthy said, some real estate agents have begun suggesting to sellers that they consider temporarily renting instead of trying to immediately find a new home.
“Sell your home, give yourself short-term options, and be on the hunt for a buy,” he said. It’s advice that usually goes over better with a certain demographic, McCarthy said. “A younger person is more flexible to it,” he said. “They’re trying to get their goals and dreams. Another person would say ‘that’s an awful lot of work.’ ”
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