After what feels like endless springs of moribund sales and industry retrenchment, the real estate market is finally showing signs of life.
Nationally, the median existing single-family home price in January showed the strongest yearly increase in seven years, according to the National Association of Realtors.
In Massachusetts, median home prices last month rose by double digits in the Barnstable and the greater Boston areas, with declines of less than 2 percent in the Springfield and Worcester areas.
Sales are up, too. Last year, single-family home sales in Massachusetts rose 18 percent, marking 12 consecutive months of year-over-year sales gains and the best year on record since 2006, according to The Warren Group, publisher of Banker & Tradesman.
In January, statewide pending home sales – typically a harbinger of actual housing sales for the next several months – for both single-family houses and condominiums went up for the 21st month.
Buyers eager to jump into the market, however, may find themselves stymied by a limited inventory.
Nationwide, the total number of single-family homes, condos, townhomes and co-ops for sale decreased in January to its lowest point since 2007. While the tight inventory is good news for sellers – fueling a rise in prices – it’s already creating buyer frenzy in some markets.
In Cambridge, for example, the tight multifamily market has pushed up prices to five-year highs, with the median price of a two-family home topping $713,000 in 2012, according to The Warren Group.
Bidding wars have broken out on the cobbled streets of Cambridge, with some buyers going door-to-door waving cash at owners of double- and triple-decker homes.
While the frenzy may be confined to the multifamily housing market in the Cambridge area, it demonstrates the powerful effects that pent-up demand and limited inventory can wreak on cash-rich buyers.
It would be a tragedy if the inflated prices that fueled the housing market meltdown six years ago rekindled a similar debacle in the single-family home market just as the industry is recovering.
Keeping homes off the market in the hopes of boosting prices may have been a reasonable strategy in the depths of the downturn.
But it’s time for agents and other real estate and finance professionals who have suffered through the recent lean times to encourage buyers to price responsibly.
With mortgage interest rates at near record lows and buyers eager to own their own homes, all signs point to a strong season this spring.
And for everyone in the industry, a healthy real estate market in Massachusetts would be as welcome as a breath of fresh air in April.
New Editorial Director
David Harris has joined The Warren Group as editorial director, replacing Cory Hopkins, who left last fall to take a position at the Seattle headquarters of Zillow, the web-based real estate portal.
Harris will be responsible for the editorial content and direction of all Warren Group publications, including its flagship publications, Banker & Tradesman and The Commercial Record, and 19 custom publications and magazines.
He joined The Warren Group from Gatehouse Media New England, where he was a managing editor for urban and suburban newspapers and websites in the greater Boston area, including the Cambridge Chronicle, Somerville Journal, Waltham News Tribune, Newton TAB, Brookline TAB, Wellesley Townsman and Needham TAB.
Harris has a bachelor’s degree from Franklin & Marshall College and a master’s degree in journalism from Boston University, where he is an adjunct journalism professor.
