Sellers Still Dominate Western Massachusetts Real Estate Market: Outlook 2022
To quote the ionic opening line from Charles Dickens’ “A Tale of Two Cities,” “It was the best of times, it was the worst of times.”
That’s how some might describe the past year in the real estate world, but it depends on where you fit in that equation.
Lawrence Yun, chief economist of the National Association of Realtors, recently said in a year-end press release from the association that housing demand continues to be high, noting that homes put on the market for the sale goes from “listed status” to “under contract” in about 18 days.
“Competition from buyers alone is relentless, but hospitality seekers have also had to deal with the negative impacts of supply chain disruptions and labor shortages this year. These aspects, as well as exorbitant prices and a lack of available homes have created a much more difficult buying season,” Yun said.
“While I don’t expect a price cut or another year of record price increases, the market will see more inventory in 2022 and that will help some consumers stay affordable,” he added. .
According to the National Association of Realtors, the median home sale price was $346,900 in 2021, up 16.9% from 2020, the highest on record since 1999.
Here in western Massachusetts, the Realtor Association of Pioneer Valley reported the median home price in the area was $285,000 in 2021, up 14% from $250,000 in 2020.
Area real estate agents agree that the past year has continued to be a seller’s market.
“We continue to struggle to have enough inventory to meet demand,” said Cheryl C. Malandrinos, president of the regional association. “There are tons of buyers looking to buy a home, and millennials are reaching the age where they are looking to buy what is often their first home. Entry-level homes are in high demand, and with this, buyers are also looking for more outdoor space.
To quote CNN, the U.S. real estate market had “a blank year,” with sales nearing a 15-year high, with around 6 million homes sold in 2021.
“I’m busy every year, people need a place to live. I made $20 million in sales with about 62 deals, compared to 2020 with $16 million and about 52 deals,” said Lisa Oleksak Sullivan, of Coldwell Banker Realty in Westfield.
Pat Wheway, of the Wheway Group in Longmeadow, said his agency had sales of $30 million, including $5 million brought in by partner Dave Mulak.
Because it’s a seller’s market, Sullivan said buyers now tend to be “less picky.”
“Two years ago, buyers might have waited to get all the amenities they were looking for in a home, or waited for another home that needed less work, but that’s not the case today” , Sullivan said.
“Also, what we’re seeing during the pandemic is that with more people working from home, they don’t need to be as close to their place of work when buying a new car. House.”
A single-level ranch, for example, is “a hot commodity right now,” especially for older buyers who don’t want to climb the stairs to the bedroom, according to Sullivan, who noted that he doesn’t There weren’t many on the market. .
“I see a mix. Older buyers might want a ranch, but I sell a ton of colonials and capes,” Wheway added.
While most mortgage rates have hovered around 3% for most of 2021, Fannie Mae, one of the top sources of mortgage funding in the United States, said in a recent economic forecast that it expects expect the 30-year fixed rate mortgage to average 3.4% in 2022, while other industry source claim rates could hit the low 4% range.
“It’s still cheap considering that interest rates were 15% and higher in the 1980s. I expect a lot of buyers in the coming months to take advantage of lower rates while they can. You can’t expect them to stay low forever,” said Beth Brogle of Real Living Realty Professionals in Holyoke.
The Federal Housing Administration (FHA) on July 30 announced an extension of its eviction moratorium for foreclosed borrowers and their occupants through September 30, and noted the expiration of the foreclosure moratorium on July 31.
Wheway noted that she expects to see a number of foreclosures this year, adding that investors will be “surprised and disappointed”.
“Fannie Mae and Freddie Mac are no longer putting these foreclosures on the market in their current state. will be able to afford that house instead of paying higher prices for investors,” Wheway said, “and that’s a wonderful thing for them.”
While some real estate agents abandoned the use of virtual tours in 2021, which became a popular way to show homes during the outbreak of COVID-19 in 2020, many are now promoting them as a primary tool for real estate transactions. .
“Virtual property tours are here to stay. You have to embrace the technology. A buyer can tell a lot about a home and property with a 3D tour,” Wheway said.
In today’s seller’s market, real estate agents can provide helpful and encouraging advice to buyers.
“I encourage them to be patient and take their time and try not to settle,” Sullivan added. “It’s a big investment. An experienced real estate agent can help a buyer with a number of strategies and offer them tools, such as clauses to put in their offer, that will help them stand out in a market where we see multiple offers.
Wheway advises its buyers to “not go wild” with their offers.
“Some buyers today go way over the asking price just to get their offer accepted over others. I don’t want my buyers to overpay and tell them financially that it will end up haunting them. Some buyers also forgo inspections , which puts them in a better light with the sellers. But it’s not a good idea because you could end up with multiple problems that you did not expect and which will be very expensive to fix,” he said. she declared.
Brogle noted that the most important advice she can offer is to “be organized” and know your financial strengths.
“You can’t accumulate debt and have bad credit. Also, you should be aware that when you own a house, it’s not like calling your apartment owner to fix something. It’s called the joys of home ownership,” she said.
Looking to the year ahead, Brogle said she expects to see continued tight inventory, but noted that once the pool of buyers dries up, prices will begin to adjust a little. little.
“But I don’t see that happening right away. For now, my advice is for buyers to get organized and line up their ducks,” she said.