The Massachusetts Real Estate Market Is Down — But Maybe Not Out
If this were a normal May, every weekend would be filled with potential buyers traipsing through homes, pulling open closet doors, peeking behind shower curtains and inspecting boilers. But this is not a normal May.
This year’s real estate market is in a pandemic-induced funk. The Massachusetts Association of Realtors reported that the state had the lowest number of homes for sale in the month of March since the organization started counting 16 years ago. April numbers aren’t out yet. And with the coronavirus pandemic not yet over, there are questions about what the future holds for Massachusetts real estate
It’s not that houses for sale aren’t being bought. It’s just that there aren’t many of them on the market.
Doriane Daniels, of the Vesta Real Estate Group in Holliston, said she expects some Bay State residents won’t be able to buy a house this year because of the economic impact of the shutdown.
But she said she’s optimistic the housing market will race back by the end of the year, because there is still so much more demand than supply in Massachusetts.
She expects to cram the spring, summer and possibly fall home-buying seasons into whatever part of the year is left before the snow starts falling next winter.
“We were in the business full-time back in 2008 when we had the banking and mortgage crisis, linking real estate, housing, mortgage and lending and banking all together. But that was a crisis of those industries. In this case this is a global crisis of health, it’s not the health of real estate that is provoking this crisis,” Daniels said.
The one bright spot for realtors — so far — is that even with the coronavirus pandemic and fewer homes on the market, the median price for homes in Massachusetts was still 6 percent higher in March than it was a year ago.
But it’s anybody’s guess what will happen in the coming months, and some people are not as optimistic as Daniels.
Anthony Thomas is a real estate instructor at the Workforce Development Center at Springfield Technical Community College. He was a home appraiser for decades before becoming a teacher. He said in the best-case scenario, where there is still consumer confidence and salaries haven’t dipped too much, the market should pick up where it left off. But with the way things have been going, he said, a “best case scenario” is far from certain.
“With the large unemployment, people worrying about their jobs, this creates a kind of a scary market, because buyers just don’t know. I’m not going to invest all that money for 30 years if I’m not sure my job is secure tomorrow,” Thomas said.
Another depressing thought for the real estate industry is whether a lull in sales for four to six months might force some realtors out of business.
Tim Warren, CEO of the Warren Group, which compiles data on real estate sales and ownership, said anything could happen, but he doesn’t see catastrophe at the end of this.
“It’s hard to say what will happen with the industry,” he said. “There are many more people with licenses than are practicing at any one time. So typically in bad times when there isn’t much activity, people go into hibernation. They don’t lose their interest in real estate, they have another gig to occupy themselves.”
And “people still need a home,” Daniels said. All kinds of life changes require a new home, like a new job or a divorce, and those events are still taking place. “There are situations where buyers have to buy in this environment, and sellers have to sell, too. Life is still happening, and that is not changing.”
But for now, the way realtors are selling homes has changed dramatically. They are, like all of us, relying on the internet to do business. And — like creating a profile for a dating app — that means people are thinking very seriously about their home’s online reveal.
“Right now, in this moment in time where everything is done virtually, we don’t get a second chance,” said Michelle Dalton, who stages houses for sale. She said pictures or a virtual tour may be the only thing a potential buyer sees, because they’re trying to limit their exposure to other people’s homes.
“So, having that pressure of having online galleries and virtual staging, virtual listings, Facebook Lives, etc., becomes really important to get it right,” Dalton said.
Dalton said there’s one small silver lining to the stay at home orders: People may have more time to pretty-up their houses for sale. People like Rob and Leah Piersiak, who are looking to sell their house in Holliston and move to a bigger house closer to where Rob works.
Leah said she’s been cleaning like mad, and Rob just can’t stop doing projects.
“We have had time at home to de-clutter, more than we would have ahead of time, because we’ve been here so much,” said Leah Piersiak. “So I do think, in some ways, there have been pieces of this that have been helpful.”
“Yeah,” Rob Piersiak added, “and I think there’s an added pressure if you’re going to put your house on the market. Now is the time to wrap up all the projects you’ve started or thought about doing.”
The Piersiaks may never actually meet the buyers who fall in love with Rob’s new patio — at an open house or even at the closing. Greg Vasil, CEO of the Greater Boston Real Estate Board, which represents 64 cities and towns around Boston, said social distancing has meant that buyers, sellers and their representatives are no longer looking each other in the eye as they sign the necessary paperwork.
“The parties are in different rooms,” he said, “and the documents are in one room. So the party will leave one room and potentially go into another room, sign a document and go back to their room. The other party will go in. So the parties are never in the same room at the same time. Everybody has their own pens. I’ve heard stories of closings done in parking lots.”
And those protections could last long beyond the slump in home sales.