Area single-family housing market remains tight

  • LYMAN

For The Athol Daily News
Published: 1/13/2022 2:47:08 PM
Modified: 1/13/2022 2:46:16 PM

ATHOL — Near the start of the COVID-19 pandemic in early 2021, the Athol Daily News reported that single family homes in North Quabbin were in tight supply. As we enter 2022, the situation locally, as well as statewide, has yet to improve.

“We’re actually in worse condition than we were at this time last year,” said Sara Lyman, owner of Hometown Realtors in Athol. “Typically, in Massachusetts — late January, early February — we’re usually standing at around 10,000 units across the state, for sales. Last year, we had just fallen under 4,000 for the first time. As of this morning (Jan. 11), across the state, for active single-family listings, we’re at 2,320.” She said the contraction in availability of single-family housing stock comes down to demand.

“In any given region of the country,” said Lyman, “you’re only going to have so many homes that sell every single year. I really had to work on getting that through to my staff in 2021, when they were saying, ‘There’s no inventory. There’s no inventory. There’s no inventory.’

“But the inventory has stayed pretty steady across north central Massachusetts and the North Quabbin region, but the demand from people looking to move out into our area — to have more green space, to get out of apartment living — has risen so dramatically that that’s what the main problem is. It’s a demand problem.”

The Mortgage Bankers Association reports that 30-year fixed rates for conforming loan balances of less than approximately $650,000 increased 19 basis point to 3.52 percent for the week ending Jan. 7 — the highest rate since the start of the pandemic. Lyman said, however, the effect of interest rates has yet to be felt locally.

“At this point — December into January,” she explained, “we haven’t really seen interest rates affect our marketplace yet. The weather is affecting it a little bit more. High COVID numbers are affecting it a little bit more. And the holidays are affecting it.

“The interest rate will be affecting our specific region, I believe, by late summer, early fall. One of the economic stats I heard is that every point the interest rate goes up, the consumer loses about $10,000 in spending power. So, if we’re at 2.8 now, and we go up to 3.8, that means the consumer can hypothetically spend about $10,000 less on a home, depending on what their price point is.”

While inflation for 2021 grew 7 percent, according to the Consumer Price Index, Lyman noted that real estate is tied to a different index than that for consumer goods.

“However, that does come into play with new construction,” she said. “Our area of Massachusetts saw the most new construction in the past year that we’ve seen the since the market crashed in 2008. So, the new construction prices started going up drastically because the builders couldn’t get materials. Materials were rising at such a high level that that drove the prices up on those newer builds.

“And then we did start to run into some appraisal issues because the appraisers are saying, ‘We understand this is a beautiful new home, but it’s just not worth $450,000.’ Then when they saw the builders’ list of supplies and how quickly the (cost of) materials went up, those appraisals got shifted.”

Lyman said 2021 saw a major shift in those people looking to purchase homes in North Quabbin.

“All of 2021 was — in my professional opinion, in over two decades that I’ve been working — the most interesting demographic shift in our local area, even more so than when the market was booming in 2007, 2008,” she observed. “We had consumers moving in from all over the country because they were able to work remotely. In our little section of Massachusetts, we expanded our wireless capabilities, so more people could work from home.

“So, we saw a large amount of people moving in from the inner cities. We had people who had never owned a home before and were in their 30s, 40s and 50s and didn’t want to live in an apartment anymore, so they were relocating to central and western Massachusetts. We saw a lot of people from out of state moving back into the state, for one reason or another — to be closer to families, to work remotely.”

That demographic shift in 2021, Lyman explained, had a big impact on local realtors.

“There were so many new agents in the marketplace that were bringing buyers from the Boston/495 corridor into our market,” she said, “that people who had been longtime Realtors in our area got out of the business because they couldn’t get any of their offers accepted. They couldn’t compete against the cash that was coming from the east.

“I’d say from Westminster west, we’d never seen as much cash as there was in 2021. We’re used to low-money-down buyers — buyers that don’t have a lot of liquidity — and that landscape changed completely in 2021. I do believe in 2022 we’re going to balance out a little bit and we’re going to get back into those FHA loans, more VA loans, more USD lending. But that wasn’t the case in 2021. I’ve never seen as much cash in our marketplace.”

When the Athol Daily News looked at the housing market in Athol in March of last year, there were only four properties on the market. “As of today,” Lyman said, “we’re at seven properties.”

She said the biggest problem currently is that there is no “middle market.”

“You either have a home for $150,000, which really isn’t habitable, or you have something for $320,000, which completely washes out the middle portion of our market — which is what we need so desperately here in the North Quabbin.”

Lyman said the average price for a single-family home in North Quabbin stands at around $235,00 for a “starter level” home.

Greg Vine can be reached at gvineadn@gmail.com


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