The data suggest there ought to be bargains aplenty in many communities in Massachusetts. But the view from the street is much different: huge swaths of Greater Boston are experiencing the kind of hot sellers’ market that is driving buyers further out of the area for affordable homes.
In Medford, for example, single-family homes are still selling at prices just below the market peak level back in 2005, according to the most recent compilation from the Warren Group, which tracks real estate data in Massachusetts. The current median selling price, or midpoint sale price, in that community is $385,000, about 1.7 percent less than in 2005.
Yet when broker Andrew Sarno listed a home there recently, “by Friday I had 22 confirmed showings and by Saturday I had eight offers.” The property ended up selling for about $450,000, nearly 8 percent above the asking price.
“There are a lot of ready, willing, and able buyers out there willing to pull the trigger, but there’s not enough houses,” said Sarno, an agent at Re/Max Andrew Realty Services. “We need more inventory.”
Medford and many other suburban communities a little farther out are just as hot and hard to crack as more expensive communities inside the urban ring. Pressured by rising mortgage rates and facing a limited supply of properties, buyers are swarming the few choices out there, sparking bidding wars and pushing up prices, creating a ripple effect that has more budget-conscious shoppers looking farther out.
Kimberly Allard-Moccia, a broker at Century 21 Professionals in Braintree and president of the Massachusetts Association of Realtors, said refugees from hot urban markets are easy to spot in her territory, which runs from Quincy to Holbrook.
“You can tell because they come out with their Boston agents in tow,” said Allard-Moccia.
And sometimes people who started their search in the suburbs are getting pushed out of Eastern Massachusetts altogether.
Rebecca Nesbitt, 32, and her fiance, Norman Poirier, 37, began shopping for a house at the beginning of the year in the northern suburbs around Chelmsford and Andover. What little there was on the market in their price range seemed too small and overpriced. So they broadened their search, moving across the border to Nashua to buy a single-family home at $286,000, just below the asking price.
“We had wanted to stay in Massachusetts, but just couldn’t find anything at the right price,” said Nesbitt, who works in medical device sales.
Her experience is typical. There were one-third fewer single-family properties in Eastern Massachusetts for sale this summer compared with a year ago, according to the Greater Boston Association of Realtors; the condominium market is shrinking even more, with inventory down by 40 percent from summer 2012.
Jacquelyn Santini, an agent at Re/Max Encore in Wilmington, has seen numerous shoppers frustrated by the market dynamics. In her hometown, for example, the spring season included 54 homes changing hands, with the average property sitting on the market for 85 days before selling. But over the summer, which is typically a slower period in real estate, the pace of sales quickened: on average, houses sold in just 50 days and some 82 properties changed hands.
“When interest rates started going up this year, that was sort of an alarm bell to buyers,” said Santini, who added that nearby Tewksbury and Methuen are under similar pressures.
Single-family home median prices in Tewksbury and Methuen may still be below their prerecession highs and look like relative bargains compared with Boston and Cambridge. Tewksbury’s median sale price was $317,000 this summer, down 16.6 percent from 2005, while Methuen’s was $245,000, down 23.4 percent from eight years ago. But the competition for available units has really heated up, said Santini.
“There are a lot of ready, willing, and able buyers out there willing to pull the trigger, but there’s not enough houses.”Andrew Sarno, a real estate agent in Greater Boston
Bert Beaulieu, a broker at Northrup Associates Realtors in Lynnfield, said house hunters can find good opportunities if they expand their search to outlying areas. But the trick is actually landing a home in a highly competitive market.
“There are a lot of buyers out there who have lost out on deals,” said Beaulieu. “I don’t see this changing for a while.”