Demand outpacing supply in Franklin County housing market

  • Laura Sandvik of Delap Real Estate in a newly built house for sale on Champney Road in Greenfield. Of the Franklin County housing market, Sandvik says “there has been a lack of inventory the past few years and now, with the pandemic, so many people are trying to move here.” STAFF PHOTO/PAUL FRANZ

  • A newly built house for sale on Champney Road in Greenfield. STAFF PHOTO/PAUL FRANZ

  • Joseph Ruggeri of Ruggeri Real Estate outside a newly built house on Champney Road in Greenfield. STAFF PHOTO/PAUL FRANZ

  • A house in Turners Falls being sold by Cohn & Company Real Estate. Supply and demand is playing out in sellers’ favor in Franklin County, with recent data showing the median sales price of single-family homes has jumped by more than 40 percent in the first two months of 2021, compared to the same time period last year. STAFF PHOTO/PAUL FRANZ

  • A house in Shutesbury being sold by Jones Group Realtors. Supply and demand is playing out in sellers’ favor in Franklin County, with the median cost of single-family homes way up. STAFF PHOTO/PAUL FRANZ

Staff Writer
Published: 4/5/2021 5:09:48 PM

Supply and demand is playing out in sellers’ favor in Franklin County, with recent data showing the median sales price of single-family homes has jumped by more than 40 percent in the first two months of 2021, compared to the same time period last year.

In the first two months of 2021, the median sales price for single-family homes was roughly $275,000, compared to last year’s median sales price of $192,000 for the same time period, according to the February market update provided by Massachusetts Association of Realtors.

In Greenfield, for example, although there were slightly fewer sales in the first two months of this year compared to last year, the median sales price increased 8 percent — from $192,000 to $208,000.

“Mostly, it’s lack of inventory,” said Laura Sandvik, who works with the Northampton-based Delap Real Estate, which serves Franklin County and much of Western Massachusetts. “There has been a lack of inventory the past few years and now, with the pandemic, so many people are trying to move here.”

In fact, Corinne Fitzgerald of Fitzgerald Real Estate in Greenfield said inventory is down by about 65 percent across the Pioneer Valley.

“We went from 1,117 (properties) in February 2020, to 386 (in February 2021) in all three counties,” she said. “We typically see more than that in just Franklin County.”

“Typical,” she clarified, refers to a time before the major housing shortage, when the market was more balanced.

“The low inventory continues to get lower and lower,” Fitzgerald said, noting that decreasing inventory was a trend even before it was exacerbated by the COVID-19 pandemic. “We’re seeing people coming from out of the area, some people coming in from the cities — more so now since the pandemic — so we have that adding to the competition for people locally.”

She also said interest rates are still at “record lows.”

“With lower interest rates, people are able to afford higher prices,” she said. “That also helps the fact the higher-end home sales are active.”

As was the case last year, houses are receiving multiple offers, according to Sandvik. Last week, she put offers in on two houses, she said — one for a house in Montague that received nine offers.

“It’s very, very hard for buyers now,” she said.

Sandvik said there are several reasons people are interested in moving to the area.

“A lot of people have family here or kids who are going to college, or they just want to get away from cities because it’s too crazy,” she said. “They want to be in a place that it’s safe in case they have to socially distance again.”

Sandvik noted that one of the biggest group of homebuyers is the millennial generation (those ages 25 to 40, according to the Pew Research Center). In fact, according to the National Association of Realtors, older millennials make up 23 percent of buyers.

“I was really surprised,” she said. “I have a lot of millennial homebuyers. I would have thought it would be older people, with deeper pockets.”

Sandvik said the competitive market has resulted in people bidding well over the asking price and often putting in cash overs.

“If you pay cash … no bank has to agree with you on the price — you don’t have to have the house appraised — but if you get a bank loan, the appraiser has to agree that the bank should make this investment,” she said. “There’s no risk with taking a cash offer.”

Jennifer Gross, a real estate agent with Coldwell Banker Community Realtors, which has branches in South Deerfield, Shelburne Falls, Amherst and Northampton, said she believes the inventory will remain low until the new housing market opens up.

“I believe that until we see a significant amount of new construction, our inventory is going to remain challenging,” she said. “Right now, we’re dealing with very high construction costs.”

With the exception of a few local projects, Gross said “very little” has happened lately in terms of adding subdivisions in Franklin County.

“I think … builders who were considering possibly new construction or new construction projects are being faced with a spike in building costs,” she explained.

Still, the need for legislation that supports housing growth is “very important,” Fitzgerald said.

“We need all different levels of housing,” she said, from affordable and entry-level housing to move-up housing or downsizing. “With the cost of new construction, it’s really hard, I think, to be able to make the numbers work where we live.”

Mary Byrne can be reached at mbyrne@recorder.com or 413-930-4429. Twitter: @MaryEByrne.




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