Springfield, as seen from the air, with downtown Springfield in the distance. Numbers of new listings are only up moderately in the Pioneer Valley, even as the rest of the state sees bigger gains. iStock photo

The Pioneer Valley’s real estate market is seeing slow but steady gains in closed single-family home sales and new listings this spring.

Yet, the supply improvements compared to last year are not nearly enough to meet strong demand nor tamp down rising home prices, according to market data and industry leaders.

As for data, the Pioneer Valley – basically defined as Franklin, Hampden and Hampshire counties – saw year-to-date single-family closings shrink by 2.76 percent through April, to 1,124 homes, according to data from The Warren Group, publisher of Banker & Tradesman.

Meanwhile, year-to-date new single-family listings through April were up 2.3 percent, to 1,473 homes, in the Pioneer Valley, according to the Pioneer Valley Association of Realtors via the Massachusetts Association of Realtors.

Those are more modest supply numbers compared to stats in other parts of the state, such as Greater Boston’s year-to-date increase in single-family closings of 8.8 percent according to The Warren Group, to 4,730 sales, compared to the same period last year. Greater Boston’s year-to-date new listings through April were up 8.9 percent, to 3,883 homes, during the same time period, according to MAR.

Worcester County’s year-to-date closed sales of single-family home were down a tiny 0.6 percent – essentially flat – though April 30, The Warren Group said, but closed sales in April alone were up 7.8 percent to 431. Year-to-date new listings were up 11.3 percent, according to MAR.

Though they’re coming off last spring’s historically low numbers, the Pioneer Valley’s increases in closed sales and new listings are still welcome.

“We’re starting to see more listings, yes,” said Lori Beth Betterton, a Realtor and team leader in the Springfield office of Lamacchia Realty. “But you have to put [the increases] into perspective. There are still not enough listings to meet demand.”

Acute Supply-Demand Imbalance

That perspective includes a look at the total inventory of homes for sale, which was down year-to-date by 24 percent in the Pioneer Valley through April, indicating that homes put on the market were getting snapped up fast by eager buyers.

Another way to measure perspective: Median prices for single-family homes in the Pioneer Valley continue to rise, as they have across the state, due to an acute housing supply-and-demand imbalance. Through April, the year-to-date median price of a single-family home in the Pioneer Valley stood at $330,000, up 10 percent compared to the same period in 2023.

Sue Drumm, a Realtor in the Longmeadow office of Coldwell Banker Realty, said the “slight ticking up” of listings is helping ease the frenzy to buy a home – but not by much, according to MAR data.

“Instead of 30 people fighting for a property, it’s 10,” said Drumm, the president-elect of the Realtors Association of the Pioneer Valley. “There’s still fighting.”

And that ongoing high competition to buy homes is keeping day-to-day inventory in the Pioneer Valley, as well as across the state.

‘It’s Not Really Improving’

Peter Ruffini, a broker/owner of RE/MAX Connections in Wilbraham and current president of the Realtors Association of the Pioneer Valley, said the region may have indeed seen a bump in closed sales during early spring.

But he said things have slowed in recent weeks, with his numbers showing year-to-date single-family closings actually down by 1.3 percent, to 1,583 sales, through early June, compared to the same period last year in the Pioneer Valley.

The net result: The supply-and-demand imbalance isn’t really changing much, up or down, compared to last year.

“It’s not really improving,” he said.

The main problem continues to be the lack of new housing in the region, as well as across the state, due to strict local zoning restrictions, Ruffini said.

Despite the challenges facing the market, Ruffini said he’s “actually optimistic” about how things are playing out.

“It’s been steady,” he said. “We still have a functioning real estate market. There’s not a lot of excitement, but, if you’re patient, the [deals] are there. It’s been stable.”

Betterton, of Lamacchia Realty’s Springfield office, said much moving forward depends on potential sellers – and whether they’ll start putting their homes up for sale in increasing numbers.

Sellers Mostly Driven By Necessity

Since interest rates began to rise in early 2023, many homeowners who might otherwise sell their houses, such as empty nesters looking to downsize, have balked at putting their homes on the market if it means taking on higher mortgage rates when buying alternative units.

They’re also worried about finding an affordable alternative home in today’s uber-competitive, high-priced buyer’s market.

“People are still selling, just not as many [as in years past],” said Betteron, a past president of the RAPV.

“There will always be reasons to sell,” she said, noting the classic reasons why people put homes up for sale: death, divorce and news job. “But if they don’t have a reason to sell, they won’t.”

The overall market may well improve later this year if the Federal Reserve decides to lower short-term interest rates, though it’s up in the air what the Fed might do in the second half of 2024, said Betterton. Senior central bankers’ projections released last week suggest only one cut in the Fed’s benchmark interest rate is likely this year.

“If interest rates stay the same, it’s kind of going to look the rest of the year like it does today,” she said.

Drumm agreed that interest rates are the big unknown heading into the second half of 2024.

If rates don’t come down, current conditions will prevail. And Drumm said that’s probably the most likely end-of-year scenario for the market.

“We’re thinking we’ll end the year steady, roughly the same as now,” she said.