HELEN BABCOCK – ‘Leveling off’
After experiencing a red-hot real estate market for most of the late 1990s with annual surges in the number of homes sold in the state – followed by only a slight increase in 1999’s volume – Massachusetts finally saw its sales volume take a downward turn in 2000.
Despite the downturn, however, real estate agents statewide still look back on 2000 as being a strong year for the market. As was the case in 1999, they point to a lack of inventory as the main cause of flattened volume numbers, and cite the continued rise in the median home sale price as an indicator that the market is still strong and showing little signs of weakening.
The total number of condominium and non-condominium housing unit sales in Massachusetts last year was 107,965, according to statistics provided by Warren Information Services, a sister company of Banker & Tradesman. That total was off by 14 percent from housing unit sales totals in 1999, when 125,773 transactions were recorded.
Non-condominium sales fell by 15.2 percent, with 86,226 transactions recorded in 2000 compared to 101,774 in 1999. The number of condominium sales fell at a slower pace, off just 9.4 percent. In 2000, 21,738 sales were recorded statewide, compared to 23,999 in 1999.
Sales statistics include all residential transactions recorded at the state registries of deeds, including non-multiple listing service sales and properties that were for sale by owners. Statistics do not include figures from Essex County for the month of December, which were not available by Banker & Tradesman’s press deadline.
As has been the case for the past several years, median home sale prices continued to rise. The median price for non-condominium residential units statewide rose by 12.5 percent in 2000. The median in 2000 was $180,000, compared to a statewide median of $160,000 in 1999.
The median condo price in 2000 was $149,900, up 12.8 percent from the $132,000 median in 1999. The non-condo median went from $167,000 in 1999 to $190,000 in 2000, a 13.7 percent jump.
“It was a robust market last year,” said David M. Walsh of David Walsh Realtors in Weymouth and current president of the Massachusetts Association of Realtors. “We saw a lot of activity last year, but [fewer] homes were available. We were struggling for inventory.”
Walsh said the drop in inventory could be attributed to a number of factors, including lower interest rates.
“With the Fed dropping the rates like they did, some people decided to refinance their homes,” Walsh said. “Instead of looking to get a new house, they would use the money to just add on an extra room … There wasn’t that push to sell their house.”
“Around here, the [number of] units went down when the price went up,” said Helen Babcock of Carlson GMAC Real Estate in Winchester and 2001 president of the Greater Boston Association of Realtors, a division of the Greater Boston Real Estate Board. “We saw a significant jump in the $500,000-and-up category.
Total residential sales in Suffolk County fell from 11,004 in 1999 to 9,628 in 2000, while the median sales price soared from $180,000 in 1999 to $225,000 in 2000, a 25 percent jump.
“A lot of people took money out of the stock market, or they got enormous bonuses,” Babcock said. “With the lack of inventory, there was a real demand for the higher end, and there was tremendous competition.”
Jeanette Tighe of Carlson GMAC Real Estate in Tewksbury and 2001 president of the Eastern Middlesex Association of Realtors saw a similar trend in her area, and added that the condominium market was remarkable.
“Prices were way up for condos,” she said. “There are some areas where they were selling for $30,000 to $40,000 over the asking price …You have to be careful now giving out prices to sellers. You never know what the right price is, but you know what the wrong price is.”
Total residential volume in Middlesex County dropped from 26,063 in 1999 to 21,856 in 2000, while the median price rose from $221,000 to $250,000. The median condo price rose from $147,000 to $163,000 while the condo sales volume dropped from 6,252 to 5,560.
Positive Outlook
The Cape Cod & Islands region’s statistics mirrored those of the state as a whole. Total residential sales dropped 13.7 percent in Barnstable County, 27.2 percent on Martha’s Vineyard and 17.5 percent on Nantucket. Condo sales in Barnstable County were up slightly, however, just over 1 percent. Median residential sales prices rose as well: 18.9 percent in Barnstable County, 32 percent on Martha’s Vineyard and 31 percent on Nantucket.
In Southeastern Massachusetts, the drop in total residential volume was less severe than the state average, while the median price increases were on mostly on par with the state average. Sales volume fell by 7.2 percent in Norfolk County between 1999 and 2000, while Bristol County’s totals dropped 5.5 percent. Plymouth County’s totals fell by just 1.1 percent. Condo sales in Bristol and Plymouth counties slightly increased between 1999 and 2000.
In Essex County, statistics through November show an 11 percent decrease in total residential sales volume, along with a 17 percent increase in the median price from $170,676 in 1999 to $200,000 last year.
Though condo sales in Worcester County were up 10 percent, overall sales dropped by 3 percent, while the overall residential median price jumped 8.5 percent from $129,000 in 1999 to $140,000 in 2000.
As was the case last year, Western Massachusetts seemed to buck the trend that was affecting the rest of the state. The westernmost county, Berkshire, posted an overall sales volume increase of 1.1 percent, while Franklin County, which lies just east of the Berkshires along the state’s northern border, posted a 0.8 percent overall residential volume increase. Median sales prices in Berkshire and Franklin counties grew by 3.1 percent and 3.5 percent respectively.
Condo sales grew in Berkshire County as well as Hampden County, where overall sales fell by 5 percent while the median price rose 6.3 percent. Hampshire County’s residential sales dropped by 6 percent in 2000 while the median price rose 7.9 percent.
“Condominiums are less expensive and are very popular,” said Cynthia Ayre of Ayre Real Estate in Agawam and president of the Greater Springfield Association of Realtors.
“[Last year] was a record-breaker for Berkshire County,” said Sherry Street of Dayspring Realty and 2001 president of the Berkshire County Board of Realtors. Part of the reason for the Berkshires’ success, Street said, was the active second-home buying segment of the market, especially in the tourist-laden Southern Berkshires. “It’s been very active. We’ve had properties that have been on the market for a day,” she said. “There’s so little inventory.”
Speculating why the downward trend in sales volume hasn’t made its way to the New York border yet, Street said, “Western Mass. is a whole different area. We’re more laid-back. We always seem to be a little behind the rest of the state, but we’ll take it when it comes.”
Statistics for Franklin and Hampden counties were also noteworthy, because the median overall residential sales prices there broke the $100,000 mark in 2000. Franklin’s median rose from $97,500 in 1999 to $101,000 in 2000, while Hampden’s median increased from $94,000 to $100,000. Those were the only two counties in 1999 where the median price was below $100,000, leaving none in 2000.
For 2001, most of the Realtors interviewed said despite bad forecasts for the economy in general, they expect the real estate market to stabilize rather than have a severe downward turn.
“With the lack of inventory, I think we will continue to see a rise in prices, but I don’t know if the prices will go up as much,” Ayre said. “The outlook is pretty positive. We’re not seeing any gloom and doom yet.”
“I don’t see [a downturn] happening,” Babcock said. “I see it leveling off. Last year was wonderful for sellers, but I think this year will be more of a balanced year. Most of the other offices are saying the same thing.”
“Stabilization would be good at this point,” Walsh said. “The economy is still there. If there are more massive layoffs, it might trickle down at some point to the real estate market, but I’m [not sure] of that.”
