Home sales in Western Massachusetts fell during the first quarter of 2003 but prices continued to climb. This eight-room home on River Street in Belchertown features a two-stall barn, exposed post-and-beam construction and wide pine floors with hand-cut nails. The home is being offered for sale at $399,000.
As in most parts of the state, Western Massachusetts struggled through the first quarter of 2003 with fewer home sales and sluggish buyer and seller activity. But like other regions of the state, prices continued to climb – in some communities by more than 10 percent.
While the harsh winter weather and uncertainty over the nation’s conflict with Iraq played a considerable role in hurting home sales volume during the first quarter, according to Greater Springfield Realtors, Western Massachusetts also faced another obstacle – a dearth of homes available on the sales market.
“We have nothing to sell. There is nothing to sell,” said Karen L. Wallace of Sullivan & Wallace Real Estate in Brimfield, which services the Greater Springfield market.
With a limited number of homes for sale and solid demand from buyers encouraged by historically low mortgage interest rates and home prices that typically remain much more affordable than their counterparts in Eastern Massachusetts, buyers have been competing to present winning offers, according to Wallace. Multiple-offer situations were still occurring in Western Massachusetts during the first few months of the year, said Wallace, even as consumer confidence tumbled and the overall economy suffered.
Sales of single-family homes fell 17.5 percent in Hampshire County, which includes Amherst and Northampton, during the first quarter. Some 193 single-family homes were sold during the first three months of the year, down from 234 during the same months in 2002, according to The Warren Group. The Warren Group, parent company of Banker & Tradesman, collects all sales information from the registries of deeds throughout the state, which includes homes that are not sold through a multiple listing service.
Franklin County, which includes Greenfield, experienced an even steeper decline in home sales volume. Sales plummeted 31 percent, from 129 single-family homes sold during last year’s first quarter to 89 in 2003. And in Hampden County, which includes the Greater Springfield market, single-family home sales in January and February were down 9.5 percent, from 546 units sold a year ago to 494, according to The Warren Group. The company does not yet have March statistics available for Hampden County.
But while sales volume was down, home prices are still headed in the opposite direction. In Hampshire County, the single-family median home price escalated 12 percent to $165,000 during the first quarter from $147,250, according to The Warren Group. In Franklin County, the median price rose to $126,000 – a 14.5 percent increase from the $110,000 median of a year ago.
The rising prices are the result of a limited supply of homes for sale, according to some Realtors.
Last week, for example, Wallace searched for waterfront properties priced under $250,000 in 10 towns and found only two homes for sale that fit the category, being situated near lakes, ponds or rivers.
“If it’s one or two homes in 10 towns – how do you put a price on that?” said Wallace.
Amherst, a popular college town, saw its median single-family home price rise 13.7 percent to $211,500 from $186,000 a year ago. In Northampton, also a nexus community in the Pioneer Valley’s Five College Area, the median price jumped even more – 15.6 percent – to $185,000 from $160,000.
In Greenfield, where single-family home sales were down 33 percent during the first quarter compared to the prior year, the median price rose 9.5 percent to $121,500 from $111,000. The median price for homes sold in Springfield during the first two months of 2003 rose 7.7 percent to $89,900.
Greener Pastures
In Western Massachusetts, sales activity and the number of listings have started to creep up in recent weeks as more spring-like weather has arrived. Winter months are generally slower for the residential real estate industry. Sales activity historically is the briskest during the spring market – which usually begins in March and sometimes as early as February. Local Realtors said that this year’s spring market started much later because of the inclement weather.
“The inventory was very light in the first three months, said Realtor Linda Rotti Walker, who blamed the harsh weather for keeping both buyers and sellers indoors.
“As soon as the weather got better we started to see more activity,” said Walker, general manager of Jones Town & Country Realty Services in Amherst.
As of last week, there were 451 single-family homes and 52 condominiums listed for sale on multiple listing services in Hampshire County; 928 single-family homes and 90 condos in Hampden County; and 230 single-family homes and five condos in Franklin County.
Bay State Realtors are predicting sales to continue at a healthy pace, but they don’t expect the record numbers they’ve seen in the previous two to three years. In addition, real estate experts predict that home prices in Massachusetts and nationwide will increase more moderately.
“I think we’ve been expecting, and we’re looking at the possibility, that with sales stabilizing it would start to stabilize the pricing in our market area,” said Robert Molta, president of the Realtor Association of the Pioneer Valley.
Given the economic climate and the uncertainty over the conflict in Iraq, Molta said it’s “fortunate” that sales didn’t decrease even more than they did during the first two to three months of the year.
“Consumer confidence at that point in time was probably slipping,” he said.
The drop in sales volume and increase in home prices in Western Massachusetts mirrors what is happening throughout the Bay State.
Statewide, sales of detached single-family homes slipped 9.3 percent from January through March compared to a year ago, according to preliminary statistics provided by the Massachusetts Association of Realtors. MAR is scheduled to release first-quarter results this week. In contrast, the average selling price for single-family homes sold in the first quarter of 2003 escalated 15.2 percent to $353,711 from $307,073 a year ago, according to MAR.
Aglaia Pikounis may be reached at apikounis@thewarrengroup.com.
