Jay typically starts the state of the real estate market story and I add some local details, or I write it from a personal perspective, but this month is a 50/50 effort.
Real estate has been such a hot topic of conversation over the past few months and years because it’s ever changing. We all need housing of some sort, and the buying and selling of homes throughout Covid and continuing now, is a bit like the Wild West.
It’s somewhat difficult to write about the state of the housing market in Central Massachusetts without being redundant, but as the old W.C. Fields’ joke went, which he repeated over and over, “you’ll have to pardon my redundancy”.
For those not familiar with the comedian W.C. Fields, who’s heyday was during prohibition and the great stock market crash, Jay’s favorite joke of his, paraphrased, was him going into a speakeasy and asking the bartender if he’d spent $10 drinking the previous night (a lot of money in those days). The bartender replied, “you sure did”. Fields then replied, “Whew, What a relief. I thought I’d lost it”.
So, pardoning my redundancy, the local real estate market is, in many ways, pretty much the same as it’s been for the last five or six months. Yes, the rates are high, but the inventory is low and I’m still seeing dozens of people coming through open houses, and the houses selling quickly.
There are a few main factors driving the current market. The most important factor is a lack of homes for sale. This scarcity of homes here in Central Massachusetts continues to drive up prices, despite the fact prices are already high, as are interest rates.
Houses just aren’t coming on the market, for a number of reasons, but the two big ones are that a huge number of current homeowners have mortgages at extremely low rates (in the 2.75% – 3% range), so they don’t want to sell, or can’t afford to sell, and move, and that there is a lack of land on which to build more homes. In other words, the supply of homes is quite constricted, while demand for homes is high.
Since last month’s newsletter, I’ve had some pretty notable listings and transactions. For starters, like an odd separated-at-birth experience, I had two condo listings…both in Worcester, both estates of women where the estate paperwork wasn’t quite finished and properties not quite ready to be listed, until they both were ready on the same day, both streets start with W, and both street numbers start with 7. It was all I could do to keep them straight.
I spent literally the entire weekend between the two places, processed a total of 36 offers between the two, and both are selling for significantly higher than the listing price, despite one being completely move-in-ready and the other having three bathrooms, but only one bathroom has a toilet.
Then there was a house at 124 Worcester Road in Westminster that I listed and sold a little over a year ago and the seller (who was the buyer a year ago) called me and asked me to help him sell it. They had done some significant improvements in the past year, and we had 40+ sets of people through the open houses (another weekend where I lived at someone else’s house), and this property sold for $25,000 over our listing price, with no inspections, appraisal, etc.
New construction is slightly slower since land opportunities are limited, but we had a lot of activity and interest in a new listing at 342 Hubbardston Road, which sold a few weeks ago for $766K. I read an article today that talked about new construction being where there will be opportunities because although existing home sellers might be staying put with their low rates, builders aren’t sitting on low rates, so they are building to sell regardless of the rates. I’ll soon have 2 new construction homes in Fitchburg listed, so we’ll test that theory on the local level.
I listed a ranch home at 112 Dunn Road in Ashburnham for $475,000 and again spent days on end at someone else’s house, and it sold for $550,000 just this week.
My oldest stepson bought a house in Westminster during this month, too! Helping a family member buy a home is proof that I think it’s still a good time to buy! We were fortunate that I found him an off-market opportunity. He wasn’t keen on 7.5%+, so he worked with one of my favorite lenders, Denise Peach at Total Mortgage, to buy down his rate. He had to lay some cash down, but is locked in with a 30 year mortgage at a very favorable rate. We ran a lot of numbers on it, his payback will be 2 years, and he’s bought that lower rate for 30 years. I’m kind of excited about that.
As of October 2, the average rate on a 30 year conventional mortgage is 7.74%. This has less of an effect on the market than would be expected, because the supply problem is more acute, and people have to live somewhere, and many buyers plan to refinance at a later date.
An important point for anyone thinking of selling or buying a home is to be aware that the housing market is varying radically based on where you want to live. In other words, don’t pay too much attention to national housing sales data and trends, because what’s happening in California, for instance, has virtually nothing to do with our local market here in Central Massachusetts. The state of the local real estate market is what is important to buyers and sellers.
So is this a good time to buy or sell? The answer is yes if you are buying, because buying a home is a long term investment that’s safe and has an excellent rate of return, and unlike something like Tesla stock, which also has paid well, you can live in it. Even the best stock market pick can’t match that. And as said many times, it beats paying rent.
And if you are considering selling, it’s a great time to sell because prices are high, but you must consider where you will live next, as those prices might very well be high too.
If you’re thinking about buying or selling in Central Massachusetts, I am always happy to confidentially discuss your specific situation. Call or text 978 870 9260, email me at jennifershenk@kw.com or live chat through my website.