MEDFIELD, Mass. — The snow is gone, the crocuses are poking through, and for sale signs are starting to dot neighborhood streets.
Three signs of spring in New England.
With the pandemic and working from home, the last few years have been crazy for the local real estate market.
Bidding wars and waiving contingencies are now the rule, not the exception.
The spring real estate season is the busiest time of the year, and so far, it’s already showing signs of being an intense couple of months.
Like hunters stalking prey, prospective home buyers descended on a rare find on a recent Friday afternoon. A single-family home in a nice suburb was listed for less than a million dollars.
“It’s been really crazy, really challenging,” said Natalie Raffol after touring the Medfield property. She’s a first-time homebuyer who’s been looking for months. “We’ve gone to open houses with lines out the door, and they’ve run out of booties, sign-in sheets, and it’s hard to show up and feel like you’re competing with so many other people.”
Trey Savage was there trying to find a bigger home for his growing family. “Be prepared to stand in line and open your checkbook.”
That home in Medfield sold after just one open house.
“The inventory situation in Boston is particularly dire,” said Daryl Fairweather, Ph.D. She’s the chief economist for www.redfin.com. “There are 40% fewer homes for sale than there were at this time last year. There are 18% fewer homes coming on the market as new listings.”
Fairweather says one reason so few properties are for sale is many current homeowners are scared to jump into this market. “It’s very expensive to try and move up into a larger home because everyone wants a larger home these days, so there just isn’t really a huge incentive for people to move, especially if they’ve already locked into a low mortgage rate last year.”
It’s a basic lesson in economics when demand exceeds supply.
“Pretty frenetic marketplace for the houses that do go on the market, they typically go under agreement in three days max,” added Kate Bingham of The Jowdy Group/ReMax.
Steve Facelle of Rise Realty in Brookline says his clients are seeing intense competition. “One place, we put in an offer and they got 24 offers the very first weekend.”
He says buyers are being forced to adjust their expectations. “Gone are the days of I want this, this, this, this, this, and this, and I’m going to find it this weekend.”
Facelle is hopeful more supply will come on the market later this spring. He’ll also be watching how high-interest rates go. “I think
with interest rates starting to rise a little bit, you’re going to see a little bit more price stabilization over the coming years. That’s not to say that prices won’t continue to grow, but they might grow at a slower rate.”
A 30-year fixed mortgage is now over 4%.
Fairweather, an M.I.T trained economist, sees them drifting higher.
She says other factors, like the invasion of Ukraine, could also play a role in how the market behaves. “An increase in
gas prices can just make Americans feel poor and have less disposable income and may be less willing to spend money on things like housing. So, there are effects going in multiple directions and it’s really just an uncertain time.”
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