Hampshire County real estate market turning around, experts say
27 Vernon Street Northampton. Purchase photo reprints »
The Hampshire County residential real estate market is turning around after five years in a worrisome downturn, according to local experts.
“People feel we have turned a corner,” said David Murphy of The Murphys Realtors of Northampton. “We’re not back to the levels of 2005-06, but values have leveled off and are starting to go the other way.”
Murphy said numerous houses in Northampton received multiple offers before selling in 2012, and 22 sold for more than their asking prices — and he predicts the market will continue to pick up.
“We got clobbered in 2008 and ’09 and are still rebuilding,” he said. “We were in the doldrums in ’09 and ’10. It’s nice to see growth. To see it continue in ’13 would be reassuring.”
Statistical indications of the turnaround, provided by the MLS Property Information Network, include:
∎ There were 1,032 closed sales of single-family houses in Hampshire County in 2012, compared to 909 in 2011, an increase of 13.5 percent. In Franklin County, sales rose from 418 in 2011 to 485 in 2012.
∎ There was a 26.3 percent decline in the number of months it would take to sell all houses on the market in Hampshire County in the third quarter of 2012, compared to the same period of 2011, indicating that the market no longer favor buyers and has become more balanced.
∎ Houses in Hampshire County sold in the third quarter of 2012 for an average of 93.8 percent of the original asking prices, an increase of 2.4 percent over the same period of 2011.
In Northampton in 2012, several houses sold quickly for more than the sellers were asking, Murphy said. The house at 27 Vernon St., listed at $349,000, sold in just 10 days for $360,000, he said. The house at 61 Liberty St., listed at $264,900, sold in just 11 days for $275,000, and the house at 49 Columbus Ave., listed for $699,000, sold in nine days for $704,000, Murphy said.
Houses in the $600,000 to $800,000 range, which have been slow to sell in recent years, are starting to move, said Linda Rotti, sales manager of Jones Group Realtors in Amherst. More property owners are asking Jones Group to do analyses of comparable properties and recommend listing prices, she said.
“We’re seeing land selling, and we haven’t seen much of that,” Rotti said. “We had a spec house listed, which wouldn’t happen in a bad market.”
Buyers are more savvy, in part because the Internet provides them with easy access to information about what’s for sale and what sale prices have been, she said.
“Many people have tried to sell at higher prices and had to reduce them,” Rotti said. “Buyers are not going to pay more than what something is worth.”
Murphy agreed that sellers no longer have unrealistic expectations based on what the market was like seven years ago.
“They expected that houses maintained their value,” he said. “In this market, if a house is priced competitively, you’ll probably be able to move it.”
Often, sellers ask real estate agents for opinions on asking prices, then say, “We’ll try this number first, let the market prove me wrong,” Murphy said. For example, a house on Beacon Street in Northampton went on the market in September for $950,000 and has now been reduced to $850,000, he said.
But there are fewer properties for buyers to choose from. In the third quarter of 2012, there were 732 houses on the market in Hampshire County, a decline of 15.7 percent from the same period of 2011, according to MLS.
December has typically been a quiet month for real estate, but there was a lot of activity last month, said Tini Sawicki, owner of Sawicki Real Estate in Amherst.
“People are feeling a bit more comfortable, and interest rates have never been so low,” she said. As of Jan. 3, 30-year fixed-rate mortages averaged 3.34 percent with an average of 0.7 points, according to FreddieMac.com.
“It’s still a beauty contest, and there’s still no sense in putting prices too high,” Sawicki said. “There are buyers out there, though financing is still a little hard and you need good credit, but things are moving in the direction of favoring sellers.”
Sale prices lag
Sale prices have been lagging behind the increases in the number of sales. In the third quarter of 2012, the average sale price of a single-family house in Amherst and Easthampton was lower than in the same period of 2011, though it was slightly up in Northampton. In all of Hampshire County, the average sale price declined from $278,612 in 2011 to $263,994 in 2012, while the median price went from $245,000 in 2011 to $239,900 in 2012.
Sale prices could start increasing everywhere in 2013, the local real estate professionals said.
Most sellers have given up on getting the sky-high prices of 2006-07, and many buyers feel like they’ve waited long enough, Murphy said.
“You can only put off life for so long,” he said. “People still die and get divorced and have a third kid. Life moves on. They can hold out for a while but not forever. Sooner or later they will take what the market will bear.”
This month is a good time to buy a house, Murphy said.
“If we’re starting to see changes in value and volume is going up, this is a good time to catch it,” he said. “If by June we’re going to see that prices have gone up substantially, it would probably behoove people to buy before that. It’s nice to think you got in just as things turned around.”
Rotti is more cautious in her predictions for 2013. The inventory of houses for sale in Amherst is low right now, but sellers often take their houses off the market during the holidays, she said.
“We’re moving to a stable, more balanced market,” Rotti said, one that doesn’t favor either sellers or buyers. “All the indications are it’s a turnaround market. If demand stays higher than supply, then we’ll see prices go up, but it’s too early to tell.”