Wanted: A house to buy in a red-hot market

  • Alix Sorrell looks out the window of the sun room into the yard of the house she is in the process of buying in Greenfield as her mother, Jennell Sorrell, watches. STAFF PHOTO/CAROL LOLLIS

  • Alix Sorrell looks out the window into the yard of the house she is in the process of buying in Greenfield. STAFF PHOTO/CAROL LOLLIS

  • Alix Sorrell looks at the house she is in the process of buying in Greenfield. STAFF PHOTO/CAROL LOLLIS

  • Alix Sorrell, middle, listens to her lawyer on the phone with her Realtor David Murphy and mother, Jennell Sorrell in the house Alix is in the process of buying in Greenfield. STAFF PHOTO/CAROL LOLLIS

  • Alix Sorrell looks over paperwork with her Realtor, David Murphy, in front of the house she is in the process of buying in Greenfield. STAFF PHOTO/CAROL LOLLIS

Staff Writer
Published: 11/9/2020 5:00:13 PM

NORTHAMPTON — After being outbid for her first choice in Easthampton during a two-month housing search, Alix Sorrell located and purchased a home in Greenfield this fall.

“I think I just got really lucky because there are no houses to buy,” says Sorrell. “It feels like a total fluke.”

Employed in graphic design for a San Francisco company and having returned to the East Coast a while ago, after growing up in the Springfield area, Sorrell said the process that led to buying the home in the Valley was “very challenging.”

“I didn’t think it was going to happen,” she said.

This experience is not unusual, and illustrates the shortage of listings in the region and the pressure the area continues to face from people who are deurbanizing — moving out of cities, often from New York or Boston, according to David A. Murphy, managing broker at The Murphy Realtors in Northampton.

“As a result of supply and demand, the dollar values are going up,” said Murphy, who assisted Sorrell in her search. “There’s much more competition.”

He points to a family from Brooklyn recently purchasing, with cash, a two-family home in Northampton that will be converted back to a single-family dwelling.

The local situation reflects what is captured in a recently released report from a Peabody company that tracks national real estate and mortgage data. The report has single-family home sales surging statewide, along with a corresponding increase in the median sale price, and that the supply of housing stock on the market is insufficient to meet this demand.

The Warren Group’s report for September shows 6,393 single-family home sales in Massachusetts, a 27.1% increase from the 5,013 transactions in September 2019. The median single-family home price increased 18% on a year-over-year basis to $472,000, which marked an all-time high for single-family homes in the month of September. That followed July and August as months during which single-family transactions and the median sale price experienced big gains, even after the slower-than-normal start to the spring and summer housing market caused by COVID-19.

“We’re in a period of very low supply, but I find surprisingly high demand,” Tim Warren, CEO of The Warren Group, said.

Closer to home in Hampshire County, the median sales price of homes in 2020 through September jumped 6.3%, to $300,000 from $282,250. In September alone, the median sale price jumped 13.4% from September 2019, to $329,000 from $290,000. Total sales, meanwhile, jumped in September to 151 from 133, an increase of 13.5%, though sales were down 4.3% through the first nine months of the year, dropping from 1,024 to 980.

Not enough properties

Julie Held, an owner/manager at Maple and Main Realtors in Northampton, said one of her properties had 40 showings in three days, and another, assessed at $399,000, had 60 showings and then 19 offers.

“There’s not enough properties for how many buyers are looking at this time of year,” Held said. “It’s phenomenal.”

The COVID-19 impacts on the economy has seemingly increased demand for residential properties.

“The importance of home, safety and nest is amplified,” Held said. “There’s a real psychological need for escaping from urban areas, and a lot of local people are working from home.”

Statistics for Northampton provided by Multiple Listing Service, or MLS, bear this out. The 174 listings that have sold this year in Northampton show the median days on market at 24, and the days to an offer at 15, with the median sale price at $370,000. Ten of the homes sold for $750,000 or more, with the most expensive a $1.37 million property on Round Hill Road.

Through a comparable period in 2019, 147 listings sold, but the median days on market was two weeks longer, or 38 days, and the days to offer was nine additional days, or 24. The median sales price was actually higher at $375,000, though just six properties sold for $750,000 or more.

Murphy said he has nine homes currently for sale, but three times that are ready to close. Another part of the problem with the supply chain is that downsizing seniors, who regularly move to smaller homes or to apartments, have concerns about bringing realtors in for showings.

“A lot of seniors are just hunkering down, they’re waiting and not downsizing now, and that’s backing up the market,” Murphy said.

Having the demand from buyers is good, but Murphy said it puts stress on the pipeline. Realtors helping a buyer find a home are discovering that appraisers have heavy workloads and home inspectors and lawyers are also busy.

Murphy said interest rates are considerably low right now — 2.78% for a 30-year fixed-rate mortgage, according to Freddie Mac — while there is also more cash on the market, meaning that people who have to depend on the banks might be easily outbid. The negative side, he added, is not every home sells to someone from Brooklyn with the cash.

Statewide, the Warren Group reports that demand is most pronounced in what Tim Warren said are the hottest markets, Barnstable and Berkshire counties, with second dwellings and “safe houses” from the pandemic being bought.

Warren said the low inventory of houses is not dissimilar to the store shelves that were bare of toilet paper in April. And while the pandemic has affected the economy, Warren said there are two main reasons home sales have not plunged. First, people hurting the most from layoffs are service workers at restaurants, hotels and entertainment venues, generally not the people who are buying homes. Second, a robust stock market and low cost of mortgages, has given people confidence that purchasing homes is sensible.

Held agrees that the level of stress working on behalf of buyers is going up. Many of her clients may also be left disappointed if they can’t get what they want due to the continued lack of inventory.

“We don’t know what will happen, but I just listed four properties and three have in a deposit already,” Held said.

Scott Merzbach can be reached at smerzbach@gazettenet.com.

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