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It’s the biggest question in Massachusetts real estate today: Will we ever get enough single-family inventory on the market to slow down massive price increases?
A panel of 110 housing industry experts and economists across the country surveyed by Zillow in recent days is closely divided on the question. Fifty-three percent indicated they believe inventory will grow this year, likely in the second half. The key, most of the optimists in the group say, will be a smaller increase in homes being listed for sale that will hopefully convince more sellers – in particular, move-up buyers – to jump in as their ability to find a new home to buy increases.
Previous Zillow research suggests there is a large body of homeowners, perhaps up to 14 million nation-wide, who are waiting to sell once the COVID-19 pandemic subsides enough to make them more comfortable allowing strangers into their homes or entering strangers’ homes. However, it’s unclear how evenly these missing sellers are distributed across the country.
“As the pandemic subsides and the economy begins to recover, lowered health risks and renewed homeowner financial confidence should bring more sellers to the market,” Zillow economist Arpita Chakravorty said in a statement. “That increased inventory would ease buyer competition that has driven prices higher during the pandemic, but expect a steady pace of home value growth to persist into the near future. Mortgage rates have risen some but are still low by historical standards, adding to people’s purchasing power and helping to keep competition for homes revved up.”
Inventory in Massachusetts’ major submarkets has hit record lows this year, with the Massachusetts Association of Realtors reporting a 61.9 percent year-over-year drop in for-sale single-family inventory in the Greater Boston Association of Realtors’ territory in March, a 68.5 percent drop in the Realtor Association of the Pioneer Valley’s territory and a 77.7 percent drop in the Cape Cod & Islands Association of Realtors’ territory.
The number of new single-family listings coming online in those areas so far this year does not indicate an easing of tight supply, either, with a 33.8 percent year-over-year drop in new houses listed on Cape Cod and the islands in the first three months of 2021, an 8.8 percent drop in the same figure in Greater Boston and an 18.9 percent drop in Franklin, Hampshire and Hampden counties.
Zillow’s expert panel believes 2020’s record demand will continue to be a factor in the nation’s housing markets, however.
