Buyers, don’t get your hopes too high about a less competitive housing market this spring.
Despite rising prices and bidding wars, homeowners remain reluctant to put up for-sale signs, creating a shortage of available properties that is frustrating buyers and real estate agents across Eastern Massachusetts. Many are crossing their fingers that a flood of new listings will materialize to ease the pressure on the market and prices as the crucial spring selling season gets underway.
But don’t count on it.
“The recent stunning lack of inventory of homes for sale is still stunning — and it’s even getting worse,” said Mary Gillach, a real estate agent at Brookline’s Gillach Group, affiliated with William Raveis Real Estate. “It’s not just in Brookline and Newton and other areas we cover. I’m hearing it from others all over.”
Tight inventories have been the story of the region’s housing market for more than a year, tamping down sales, driving up prices, and showing few signs of easing. Listings of single-family homes statewide have declined for 24 consecutive months — including a 19 percent plunge in February — while median sale prices have increased for 28 straight months, according to the Massachusetts Association of Realtors and Warren Group, a Boston real estate tracking firm.
Sales, meanwhile, have declined in each of the past three months — not for want of buyers, but of sellers, according to industry analysts.
The tight supplies have been felt most acutely in Boston neighborhoods and close-in communities, where median prices, or midpoint prices, have climbed significantly above the prerecession peak in 2005. Gillach said she recently represented a client who bid $1.4 million in cash — $300,000 over the asking price — for a four-bedroom home in Newton and waived the home inspection.
“And we still lost,” she said. “There were 15 other offers — 15 offers.”
Industry officials say a number of factors could be contributing to the supply shortage. First, construction of new homes has lagged in recent years even as the population has grown. In addition, home values have yet to regain their prerecession peak in many communities, leaving homeowners wary of selling at a loss.
Tom Grimshaw, a realtor at Gibson Sotheby’s International Realty in Boston, cited another factor exacerbating inventory woes: homeowners worried they won’t be able to find a new home at an affordable price if they sell.
One of his clients wants to sell her South End condo and move, he said, “but she’s afraid there’s no place else for her to go in the area. She’s really balking at selling. This is a very intense market right now.”