Sir Edmund Hillary, conqueror of Everest, may not have much in common with your average Massachusetts real estate agent. But some of them may now be experiencing the same sort of tingle Hillary got staring down from the roof of the world: After more than a year of price recovery, median home prices in some of the hottest markets in the Bay State have now risen above their pre-real estate crash peaks.
Real estate prices in Massachusetts peaked in 2005, with the median price for a single-family home in the Bay State reaching $355,000 for the year (with a seasonal monthly peak of $370,000 that June). Today, statewide prices are nowhere near those highs – through May, the median price for a single-family home was $300,000, with a seasonal peak of $324,500 that month.
But zoom in a little closer, and a different picture emerges. In more than 40 Massachusetts towns, prices are already exceeding their pre-crash peaks, as the unleashing of three years of pent-up demand is turning buyers desperate, while hesitant sellers are keeping inventory levels low.
In some places, the differences are quite substantial: In Cohasset, the median single-family price through the first five months of 2005 was $675,000. This year, it’s $832,500 – a $157,500 increase. In Wellesley, the median single family price was $869,000 in 2005. This spring, it’s $968,000, an increase of $99,000. And in Brookline, the spring 2013 median price for a single-family home was $1.2 million, up a whopping $259,000 from 2005’s $979,500.
“Properties that are coming on in good locations are selling with multiple offers. It certainly feels like a seller’s market,” said Marc Decker, sales manager for Coldwell Banker’s Brookline office. “If the property next door sold for $1 million, [some agents will say,] ‘I think we should try for $1.1 million.’”
Hot In The ’Burbs
Certain hotspots throughout the state are obviously leading the price recovery. Radiating out from Boston itself to the 128 corridor, towns like Cambridge, Somerville, Arlington, Concord, Newton and Lexington are among those exceeding their pre-crash highs.
“Homeowners in these markets are beginning to grasp that we may be at another market peak, or at least the best time to sell in the past five years,” said Mark Lippolt, senior vice president of operations for Chestnut Hill-based luxury brokerage Hammond Residential Real Estate.
But they’re not the only hotspots: Orleans and Edgartown, Marion and Norwell, Manchester-by-the-Sea and Newburyport are also beating their past highs. And the Berkshires has its own cluster of recovered towns: North Adams, Lenox and Pittsfield are also exceeding their 2005 highs.
“I don’t think it feels like it’s back to where it was when it was a really, really, hot market, but we certainly have improved,” said Barbara Osborne, broker/owner of Ashmere Realty in Hinsdale and 2013 president of the Berkshire County Board of Realtors. “We’re still not back to where we should be, but it’s coming along. I think everybody’s a little bit more excited now.”
Osborne’s caution was echoed by other brokers and agents. Even in markets where prices have fully recovered, low inventory is leaving plenty of agents scrambling to deal with disappointed buyers.
“My agents still have a spring in their step. They’re still very positive about the market. But it’s very competitive,” said Decker. “The average sale-to-original list price ratio right now in the town of Brookline is 101 percent. That’s the original list price. Forget any price reduction. It was only 96 percent last year. I’ve been in the business 12 years and I’ve never seen that,” he explained.
With a tough market out there for buyers, many potential move-up sellers are still on the sidelines. But sellers who aren’t looking to buy another house in the same area are beginning to move, said Lippolt.
“Those who do not need to worry about making a purchase in this inventory-challenged market – because they’re moving to the Cape, because they’re moving out of the area, because this is a former primary residence and they bought a new home two years ago and have been renting this one – are starting to put their properties on the market,” he said. “Not enough to resolve listing shortages, but enough to give many markets more energy through the summer months.”
Email: csullivan@thewarrengroup.com
