Following statewide trend, area home prices surge

  • Kathy Borawski of Borawski Real Estate stands on the corner of Vernon and Elm streets in Northampton on Thursday. STAFF PHOTO/KEVIN GUTTING

  • Kathy Borawski of Borawski Real Estate, photographed on Vernon Street in Northampton on Thursday. STAFF PHOTO/KEVIN GUTTING

  • The corner of Elm and Vernon streets in Northampton on Thursday. STAFF PHOTO/KEVIN GUTTING

  • Greg Stutsman, with Brick & Mortar Realty in Amherst, shows a house listed with Kimberly Raczka and 5 College Realtors in Shutesbury to Lauren Desharnais and Rob Bianchi. STAFF PHOTO/CAROL LOLLIS

  • Lauren Desharnais and Rob Bianchi look out the kitchen window of a house they are looking at in Shutesbury. STAFF PHOTO/CAROL LOLLIS

  • Greg Stutsman, with Brick & Mortar Realty, shows a house listed with Kimberly Raczka and Five College Realtors in Shutesbury to Lauren Desharnais and Rob Bianchi. STAFF PHOTO/CAROL LOLLIS

  • Greg Stutsman, with Brick & Mortar Realty, shows a house listed with Kimberly Raczka and Five College Realtors in Shutesbury to Lauren Desharnais and Rob Bianchi. STAFF PHOTO/CAROL LOLLIS

  • Greg Stutsman, with Brick & Mortar Realty, shows a house listed with Kimberly Raczka and 5 College Realtors in Shutesbury to Lauren Desharnais and Rob Bianchi. STAFF PHOTO/CAROL LOLLIS

Staff writer
Published: 6/25/2021 7:43:29 PM

NORTHAMPTON — The cost of a single-family home continues to climb statewide, and the Northampton area is no exception to the trend of buyers rushing to pay high prices in cash.

In May 2021, the median sale price for a single-family home in Massachusetts “spiked 23.5 percent on a year-over-year basis to $525,000, up from $425,000 in May 2020,” according to The Warren Group, a Peabody-based firm that provides New England real estate data.

According to the data, the median price has jumped 28% in two years, since before COVID-19 lockdowns shuttered businesses for months from coast to coast and took spending power away from millions of families. The median sale price in May 2019 was $410,000.

“The market is crazy,” said Kathy Borawski, a Realtor with Borawski Real Estate in Northampton with nearly 40 years of experience in the local market. “We are seeing an awful lot of buyers from out of the area, and an awful lot of buyers with cash.”

The housing figures show that, from January through May 2021, Northampton saw an increase in median prices and a drop in sales compared to the same period in 2020.

The city had 17 single-family home sales in May 2021, with a median price of $510,000, according to The Warren Group. From January through May, 58 homes were sold with a median price of $418,625, while the previous year-to-date total was 72 sales with a median price of $305,125.

Borawski said four houses went up for sale in Northampton on June 22, an unusually high number for a single day. Houses in Northampton and the surrounding area are selling in a matter of days, and many listings end up in bidding wars.

“In a more stable market, we don’t have bidding wars,” Borawski said. “Anything that’s listed for more than 30 days, the price is too high.”

Out-of-state buyers are attracted to Northampton for a number of reasons, Borawski said, including its proximity to major cities and airports, but also because there are “no earthquakes, fires or floods.” Many people who started working from home during the COVID-19 pandemic continue to do so, making it easier for them to move away from the workplace.

This influx of demand has priced some local buyers out of the market, she said.

April 2021 was the first time ever that the statewide median price for a single-family home rose above $500,000, according to Tim Warren, CEO of The Warren Group, and the statewide data show that demand is starting to outpace supply.

“As inventory continues to dwindle, we’ll continue to see declining sales and inflated prices in the coming months,” Warren said.

Greg Stutsman, a real estate agent with Brick & Mortar Realty in Amherst, said the market is experiencing “an unprecedented situation.”

Stutsman said some buyers are opting to forgo inspections, or limiting the scope of inspections, and even offering to cover the sellers’ closing costs to ink a deal.

“That’s something we had heard of in urban markets,” said Stutsman, but not in Hampshire County.

With COVID-19 vaccinations up, and the effects of the pandemic on daily life starting to wane, sellers are more willing to meet with buyers and offer in-person showings. Remote showings, however, have “become a huge trend over the past year,” Stutsman said.

Brick & Mortar Realty also has seen the trends described by Borawski, including bidding wars and houses selling in a matter of days.

Stutsman is working with Lauren Desharnais, 25, and Rob Bianchi, 27, two members of the Massachusetts Army National Guard who sold their house in Sharon, New Hampshire, in March. Desharnais said they asked for $315,000, but a buyer offered $340,000 in cash and the house sold in a week.

The couple has lived in Desharnais’ childhood home in Chelmsford since the sale, and they are not in a rush to buy yet. Still, there is uncertainty about the quality of any offer the couple will be able to make in such a competitive market.

“We’re figuring that we might be stuck at home for a lot longer than expected,” Desharnais said.

The first house they viewed was in Shutesbury on Thursday. The couple wants a lot of land to practice shooting, and even though they don’t have children yet, Desharnais said they would like to live somewhere with a good school system.

“You can’t even be picky about that right now,” she said. “You just have to be happy with the house and then deal with everything else.”

Stutsman said industry data on the local multiple listings service show that, in May 2020, an average single-family house in Hampshire County sold for $330,000. One year later, the average price was $397,000.

Condo sales, meanwhile, are up 95% over last year, returning to their pre-COVID numbers. There were 2,723 condominium sales statewide in May 2021, compared to 1,399 sales in May 2020. May 2019 saw 2,556 transactions, so the most recent numbers show a 6% increase on a two-year basis.

As condo sales rebound, the median price has held steady at more than $400,000 for 10 consecutive months. The median price increased 20.8% on a year-over-year basis to $490,000 this May — a new all-time high. Compared to May 2019, the price is up 22%.

Brian Steele can be reached at bsteele@gazettenet.com.

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