The Massachusetts real estate market is poised for another seller’s market across large swaths of the state this spring – as long as sellers keep their expectations in check and don’t ask for overly high prices, market-watchers say. 

Based on early 2019 data, all the signs are there again for a high demand/low supply market that should give sellers an edge, though that’s not necessarily the case in every submarket around the state. 

Interest Rates Attract Buyers 

The inventory of single-family homes for sale across the state was down in February by 9.5 percent compared to last year, according to the Massachusetts Association of Realtors, roughly matching the January numbers and suggesting another tight single-family market this spring. Inventory is slightly better for the smaller condo market, having increased by 5.6 percent during the winter, data shows. 

Not surprisingly, buyers were paying more for homes in February amid the latest falloff in supplies, with single-family prices rising year-over-year by 7.4 percent to $365,000, according to The Warren Group, publisher of Banker & Tradesman. Sale prices for condos were up a more modest 2 percent to $343,000.  

“Every year seems to outpace the prior year,” said Amy King of Keller Williams Realty in Newburyport. “It’s a very strong market.” 

Bob Driscoll, senior vice president of residential lending at Rockland Trust, said his data signals a strong regional market this spring, based on the mortgage and refinancing activity he’s seeing at his 95-branch bank. The fall in interest rates since last summer has helped enormously, with more buyers returning to the market to take advantage of rates now hovering in the 4 percent range, he said. 

“We’re seeing applications exceed last year’s levels,” Driscoll said, noting Rockland Trust’s business should increase even more this year with its recent purchase of Blue Hills Bank.  

Priced Out of Boston? Try Lynn 

Colleen Tonner, owner of Tonner Real Estate in Lynn, said this past winter’s mild weather clearly helped the market, driving up sales activity. Indeed, statewide single-family sales spiked year-over-year in February, rising by 8.7 percent to 2,810, according to The Warren Group. 

But Tonner said it all comes back to fundamentals – and the fact is that there’s simply more buyers than sellers in the region. 

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Sales in Lynn are being helped by the overheated market in the immediate Boston market, driving out people looking for more affordable homes and rents elsewhere, she said.  

“Proximity to Boston and affordability is what’s driving sales here,” Tonner said of Lynn. “I see a good tailwind going into spring.” 

It’s not just young professionals eyeing Lynn, said Al DiVirgilio, owner of RE/MAX 360 DiVirgilio Homes in Lynn. 

It’s also blue-collar workers who are increasingly priced out of quickly changing neighborhoods in Boston, such as East Boston. In particular, Latino immigrants working in the building trades are starting to flex their financial muscle by buying in places like Lynn, rather than putting up with ever–increasing rents in Boston, he said. 

Another community benefiting from the pushout from Boston: Melrose. 

Jim Major, an associate broker and agent at Century 21 North East, said demand is very high in Melrose, which has commuter rail access to Boston and is known for its solid schools. However, as is the case in other towns, inventory in Melrose is “pretty darn low,” with only nine homes listed for sale during the last week of March, he said. 

‘Tale of Two Markets’ West of Boston

Anthony Lamacchia, owner of Lamacchia Real Estate in Waltham, is noticing what he calls a “tale of two markets” west of Boston. 

In Waltham, the market is still strong but calming down a bit, he said, echoing the sentiments of others noticing similar slowdowns in places such as Lexington.  

But Lamacchia, whose agency also has an office in Worcester, said things are really starting to heat up in Worcester and Central Massachusetts in general. 

It’s normal for Central Massachusetts to lag Eastern Massachusetts by a few years after a recession, he said. But this cycle seems to be different, as people fed up with high prices in the immediate Boston market are increasingly open to the idea of living further west in Worcester and Middlesex counties and along Interstate 495, he said. 

Indeed, Worcester County last year saw the second–highest spike in single-family home prices, at 6 percent, after Middlesex County, according to The Warren Group. Last year’s momentum should carry into the spring market, Lamacchia said. 

“I’m more bullish on Worcester than I am around here [in Waltham],” he said. “I think, for the first time, we’re going to see a stronger market in Central Massachusetts this year. It’s the opposite of what I’ve always said in the past.” 

Sellers May Want to Shoot for the Moon 

But Lamacchia does have one concern in general: Sellers thinking they’re in total charge, something he said he noticed last year.  

“Frankly, sellers can get freaky,” he said. “Some thought they could just name what they wanted and that’s that. Sellers have to be more realistic everywhere. It’s still a strong market, but not a hyper market.” 

On the Cape, the market for all types of homes is “awesome,” said Joan Witter, an agent at Compass Massachusetts. 

“We’re definitely a jump ahead of last year,” she said of the strong winter season and lower interest rates. 

As a result, she said she’s “very optimistic” about the spring market, though she shares the same concern as Lamacchia: Sellers expecting the moon and possibly hurting the market by asking for too much.  

“They can have overly high expectations,” she said of sellers. “It’s an education process for some of them.” 

Email: jayfitzmedia@gmail.com