Everything seemed primed and set for a strong spring real estate market in Massachusetts.
The economy was humming along. The market had the wind at its back after a record-breaking 2019 and a positive start to 2020 in January. Even the fickle New England weather was cooperating, as the region experienced one of the warmest winters in memory and as meteorologists predicted an early spring was on the way.
And then the coronavirus outbreak hit.
With the economy reeling and “social distancing” now the norm, real estate agents are becoming increasingly convinced that the once–promising spring market may have to wait until early summer, late summer, or perhaps even next fall, depending on how the outbreak plays out in coming weeks and months.
“Our spring market might be pushed ahead,” said Ryan Wilson, owner of Wilson Group-Keller Williams in Newton. “Things are already starting to slow down. Yet there’s still a lot of serious buyers out there. We’ll have to see.”
The slowdown can be seen in recent cancelled open houses, as owners balk at letting potentially infected people into their homes for viewings. Meanwhile, attendance is down at some of the open houses that have proceeded as planned, agents say.
“People are starting to hit the pause button,” said Amy Mizner, senior vice president at Gibson Sotheby’s International Realty in Needham. “I’m starting to see the effects. I just had one client cancel an open house. You’re having the public coming into your house – and that makes people nervous.”’
Sue Hawkes, managing director of The Collaborative Cos. in Boston, said agents are now “trying to control” the number of buyers arriving at the same time to view new condominium opportunities at the luxury EchelonSeaport. The reason? To comply with new state gathering restrictions and to reassure buyers nervous about catching the virus.
At Collaborative’s sales offices, new protocols have also been established to reassure potential buyers that precautions are being taken, from using face masks and gloves to having hand sanitizer at the ready, Hawkes said.
Meanwhile, Collaborative has postponed venue “special events,” such as wine tastings and tea gatherings she said.
Market Not Frozen, Despite Virus
To make clear: The coronavirus crisis hasn’t brought the real estate market to a standstill. Agents say they’re resorting to more private showings of homes, in order to cut down on crowds, while planning to expand use of “virtual tours” using streaming video to show properties.
The one thing still going in the market’s favor, at least from a seller’s standpoint: The demand for housing remains extremely strong in Massachusetts, agents say.
Meanwhile, the total inventory of single-family homes for sale in Massachusetts stood at only 7,939 in January, down from 12,165 in January 2019, a decline of 34.7 percent. Available condos for sale were down 26.2 percent during the same time period, according to data from the Massachusetts Association of Realtors.
“We may see things tamp down a bit over the next 45 to 60 days. But prices should be generally stable. The demand for housing is still incredibly strong. I don’t see us going into a correction.”
— Kurt Thompson, 2020 president, Massachusetts Association of Realtors
Because of those supply-and-demand factors, MAR 2020 President Kurt Thompson, a broker associate at Keller Williams Realty North Central in Leominster, said he doesn’t see prices falling much, if any, due to the coronavirus challenges and probable economic setbacks.
“We may see things tamp down a bit over the next 45 to 60 days,” he said. “But prices should be generally stable. The demand for housing is still incredibly strong. I don’t see us going into a correction.”
Empty Nesters Priced Out
The price number a lot of people will be eyeing in coming months: $400,000. That’s last year’s record-breaking median price for a single-family home in Massachusetts, according to Warren Group data, and some agents say they’ll be watching closely if prices veer much, if any, from that level. The median price for condominiums in Massachusetts last year was $380,000, according to Warren Group data.
As for what to expect when the coronavirus emergency eases, real estate agents say they anticipate a continuation of young Millennial families moving from the city to the suburbs as they seek more affordable and larger homes, as well as better-quality schools for their children.
That trend has been ongoing for a few years now – and is expected to intensify as Millennials age and more start having children.
But they may find an already tight suburban market is becoming even tighter, due to fewer empty nesters deciding to downsize, sell their suburban homes and head into the city.
“More of them are staying put,” said Mizner.
The reason: Many can no longer afford the escalating prices in desirable urban places such as Boston, Brookline and Cambridge.
Last year, the median condo price in Boston’s core area was $955,000, up 7.4 percent over the previous year, according to Warren Group data. The median condo price last year in Brookline was $849,500, up 4.2 percent, while the price for a Cambridge condo was $780,000, up 1.3 percent.
Those selling their suburban homes in Wellesley and Weston (with median single-family sale prices of $1.4 million in 2019) and in Lincoln and Concord ($1.1 million) can afford a lateral move into desirable urban areas.
Selling, Then Buying Tough
But the story is different for empty nesters in towns such as Acton and Andover (median single-family home prices of $600,000 in 2019) and those in most other suburban towns. They’d be buying up, not down, in terms of prices when moving from the suburbs to popular urban areas.
Even empty nesters hoping to downsize from one suburban home to another suburban home are finding it hard, due to the lack of suitable inventory on the market.
Jacquelyn Santini, a sales agent at RE/MAX Encore in Wilmington, said many empty nesters want to live closer to their grown children and their families in the suburbs. But the challenge of selling a home and then buying another one is daunting in the current market.
“There’s not that much product out there,” Santini said.
The default position for such people is often to just stay put, she said.
But the Millennial-empty nester challenges are minor compared to what the market is now going through as a result of the coronavirus crisis.
Santini and others say they hope the market doesn’t deteriorate too much and for too long because of pandemic fears.
“There’s a lot of uncertainty,” said Santini. “People just want to see the dust settle.”