(NECN: Peter Howe, Norwell, Mass.) – As the U.S. Commerce Department reported Wednesday March home sales were down by 14.5 percent across the country, the Massachusetts Association of Realtors reported the first month of the key spring home selling season has grown even tighter than last year: Prices up and available homes to buy down amid a maddening shortage of inventory.
“If you put a home on the market right now that’s well priced, it’s going to sell rather quickly,’’ Peter Ruffini, regional vice president of Jack Conway Co. and this year’s president of the state Realtors group, said in an interview Wednesday afternoon.
Lynn Cohen, a team leader at Keller Williams Realty in Newton Highlands, Massachusetts, agreed: “No matter what we put out there that’s of quality, it’s gone, with multiple offers, in a feeding frenzy.’’
The Realtors Association new data for March showed median prices for single-family homes sold in March were up 8.3 percent, the 18th month in a row of higher prices. Condominium prices were also up for a 10th straight month, up 11.2 percent from March 2013.
But the actual number of houses sold was down 11.5 percent from the same month last year. And the inventory of houses listed with Realtors for sale on March 31, 2014, was down 13.9 percent from a year earlier – and condos 23.7 percent.
It’s an odd situation given that you would normally thinking steadily higher prices would be encouraging more people to finally sell after enduring the housing market meltdown.
Cohen said she thinks it’s a problem that seems to be feeding on itself. “What I really think it is is that people are afraid that if they put their house on the market and they sell it quickly and successfully, that they won’t know where they’re going to go. It’s just a domino effect, and we just need someone to kick the first domino out.’’ Cohen said there seems to be in particular a reluctance on the part of developers to build new homes and bring them to market.
Another factor working against sales: Mortgage rates are about 1.25 percentage points higher than they were a year ago – still very low, by historic standards, but making homes more expensive for buyers. The mortgage situation also leaves people in a home they consider acceptable who are carrying a 3-something percent mortgage they got two or three years ago during the record-low mortgage market likely unmotivated to sell and go have to find a new home with a more expensive monthly mortgage payment.
While the month-end inventory of homes listed for sale in Massachusetts has been falling, year over year, for 25 months in a row, the Realtors did report one datum that could be encouraging: The number of houses and condos newly offered for listing during the month of March was up by 12 percent from a year earlier. If that trend continues, and large numbers of homes aren’t getting snapped up within the month they get listed, the snapshot-in-time inventory of how many homes and condos are available for sale should finally begin to grow to levels that will make finding a home – especially in communities close to Boston – so challenging.
Something that could help: New data from Zillow.com show that the number of homeowners “underwater” — owing more on their mortgages than their home or condo is worth — has dropped to well under 20 percent in eastern Massachusetts, to as low as 8 percent in Middlesex County, 9 percent in Norfolk County, 12 percent in Essex County, and 13 percent in Suffolk County (Boston, Chelsea, Revere, and Winthrop).
Ruffini said that should help unfreeze the market for new listings in time. “A lot of folks in negative equity situations, maybe that’s not the case anymore because the market’s rebounded so they’re no longer underwater, and they’re now able to consider doing a regular sale rather than a short sale” when banks agree to sell a home for less than the amount owed on the mortgage as an alternative to foreclosing.
With videographer Daniel J. Ferrigan
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Tags: massachusetts, Peter Howe, Norwell, home sales, MA homes