KEVIN M. SEARS
Few buyers concerned

It’s no secret that the city of Springfield has struggled through a spate of bad news this year. A $20 million gap in the city’s annual budget left the community on the verge of bankruptcy, which pushed the state to swoop in with a $22 million bailout this summer. Months later the city was thrown for another loop when local leaders were arrested and charged with using federal housing dollars for home improvements and other personal expenditures.

But the fiscal crisis and the corruption charges haven’t had too much of an effect on the local real estate market – at least not yet, according to local Realtors. In fact, home prices in Springfield, where the cost of purchasing property is a bargain compared to Boston, Worcester and most other cities in the Bay State, have been steadily rising, and sales have been higher this year.

“There have been a few experiences where there has been concern by buyers,” said Kevin M. Sears, a Realtor and property manager with Sears Real Estate in Springfield. But Sears said as far as he can tell there has been “surprisingly little” impact on the real estate market.

The median price for a single-family home surpassed the $100,000 mark for the first time last year – a sharp contrast to most Boston suburbs where a modest ranch or Cape Cod-style home can easily sell for $500,000 or more. This year, the median price for single-family homes sold in Springfield through August has reached $117,638, or 15 percent higher than the $102,000 median price recorded during the same months in 2003.

Springfield’s condo prices have also edged upward, from a median price of $79,000 to $89,414 – a 13 percent increase. A total of 1,213 condos and single-family homes were sold from January through August in the city, up from 1,168 during the same months a year ago.

Realtors say they are seeing a lot of interest from out-of-town investors who are attracted to Springfield’s low prices. That has helped to prop up multifamily home sales and prices. The sale of two-family and three-family homes jumped 32 percent during the first eight months of the year compared to a year ago – from 499 unit sales to 660.

“A lot of our demand is coming from out of the area,” said Thomas Avezzie, a longtime Realtor in Springfield. Buyers are coming from eastern Massachusetts and New York because Springfield is “a pretty good value” compared to other parts of New England, he said.

A Realtor with Dot Lortie Realty/Landmark Realtors, Avezzie said he doesn’t think negative news about the city has had any impact on the real estate market.

“Most people come to Springfield because they can’t afford Longmeadow or the other [nearby] towns,” he said. “It’s not because it’s their first choice. It’s because it’s the most affordable choice.”

The median price for three-family homes sold through August of this year escalated to $135,000 – a 29 percent increase from the $104,500 median price last year. Price appreciation for two-family homes sold during those months has also been impressive. The median price for two-family homes was $125,000, up 24 percent from the same period in 2003 when the median price was just $95,000.

Those prices are considered a steal compared to the prices of multifamily properties in Boston and Worcester. Asking prices for multifamily homes in some Boston neighborhoods are about three times higher. In Boston’s Jamaica Plain neighborhood, one two-family home is currently listed for sale for $439,000. Meanwhile, the median selling price for a three-family home in Worcester is $260,000 and two-family homes command a median price of $198,000.

While home prices have been climbing in the city, Springfield has struggled with a weak job market and residential tax base. Tax collections have dropped, and some parts of the city are marked by abandoned homes and apartment buildings. Nearly 7 percent of the city’s 61,172 housing units are vacant, according to the 2000 U.S. Census. Last year, more than 60 percent of the city’s budget was funded with state money.

In July, the politically connected Asselin family was indicted for stealing about $1 million from the Springfield Housing Authority to finance home improvements. Among those charged was state Rep. Christopher Asselin, who was ousted from office during the Sept. 14 primary election. Asselin’s father, Raymond Asselin Sr., who ran the Housing Authority for more than 30 years, was the ringleader in the scam, according to authorities.

No Worries?

Still, some investors are pouring big dollars into the state’s third-largest city. A pair of Boston-based developers recently committed to constructing new homes in East Springfield and the city’s Pine Point neighborhood.

“Demand for new construction still seems pretty high,” said Sears.

According to Sears, there are two development projects under way in the Pine Point neighborhood, one that will feature over 20 homes and another that will include more than 50. The new homes will range in price from $150,000 up to $250,000.

Sears’ firm sold a newly constructed three-bedroom Colonial on Morningside Drive last month for $184,900. Last year, a similar house next door sold for $150,000.

Some homes in Forest Park, Springfield’s historic district, have fetched much more this year. A restored Tudor/Victorian with more than 4,000 square feet of living space in the neighborhood sold for $300,000 in April, according to records from the Hampden County Registry of Deeds.

In July, an 11-room Colonial built in 1898 on Sumner Avenue in the same neighborhood sold for $300,000.

The highest-priced home to sell so far this year was a three-bedroom ranch on Shelby Street in Pine Point that went for $350,000 in February, according to registry records collected by The Warren Group, parent company of Banker & Tradesman. The purchaser was listed as Investment Property Group, which bought the property from the Paul T. Cummings Trust.

Sears said high-end homes with price tags of $300,000 and above typically found in Forest Park are taking longer to sell.

But Springfield remains one of the most affordable communities in the Bay State, said Sears, and that draws buyers to the city.

Sears, who ran for City Council last year and is the nephew of Springfield Mayor Charles V. Ryan Jr., said he has been closely following the negative news about the city in recent months. Real estate agents that Sears has talked with in his office said they’ve encountered some homebuyers who have expressed concern.

An agent in Sears’ office even encountered a Realtor from another firm who tried to convince a buyer who had signed an agreement to purchase a home in Springfield to pull out of the deal. Despite such concerns, homes are still selling.

“The feeling is that it’s something that’s not talked about. It’s known but it’s not addressed,” said Sears.

Last week, when talking to Banker & Tradesman, Avezzie expressed optimism, noting that home selling prices and sales have not slipped.

“Give me this [type of real estate market] in the next 20 years and we’ll all be happy,” said Avezzie.

Aglaia Pikounis can be reached at apikounis@thewarrengroup.com.