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South

High demand, low supply driving up housing prices

The current housing market south of Boston is hot, with large numbers of buyers driving up prices as they compete for limited numbers of homes, realtors and others say.

“There’s unbelievable pent-up demand,” said Melvin A. Vieira Jr. of RE/MAX Landmark Realtors in Milton. “Everybody is out there. It’s a frenzy because there’s not enough inventory.”

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“Properties are selling for full price or above,” said Steve Webster, owner of Success Real Estate in Braintree, which has eight other offices in Southeastern Massachusetts. “We’re getting multiple offers. It’s absolutely insane.”

For example, Webster said a client recently offered $40,000 above the $450,000 asking price for a home in Dedham — and was outbid. The house, he said, was “an average house — nice, but average.”

“It can be discouraging,” he said. “The best advice I can give people is be organized and be ready to make a decision — and bring your checkbook with you.”

In Cohasset, a house on desirable lower Sohier Street came on the market at 8 a.m. on a recent Friday and “we had an offer on it at 10 a.m. for $50,000 over” the asking price of $1.225 million, said Nancy Hamilton of Dean and Hamilton Realtors. The cash sale closed in 30 days, she said.

“Nothing we are bringing on the market that is priced properly is lasting more than a week,” Hamilton said. “They are just flying off the shelf.”

The downside of the heated market, though, is that people who sell their homes can have a hard time finding something to buy.

Suzanne duMont-Perez and her husband, Esten, put their Norwell home on the market recently and want to move to something bigger within their two children’s school district. They have had lots of calls since they stuck a for-sale sign in their Central Street yard, and she said she is confident the house, priced at $459,000, will sell.

“We’re just nervous [about] will there be a place to move to?” she said. “There’s not much inventory in Norwell.”

The local housing market with its high demand driving up prices for a low supply of properties mirrors the national picture: US home prices rose 12.1 percent in April from a year earlier, the biggest gain since February 2006, according to real estate data provider CoreLogic. In the same period, the number of houses for sale fell 14 percent.

In Massachusetts, the median sale price for a single-family home was up almost 14 percent in April — from $275,000 to $313,000 — according to the Warren Group, which tracks the state’s real estate activity. Meanwhile, the number of homes sold in April was down 1 percent from a year ago, for the third month in a row.

“Sellers are in control,” said Jay Donahue, owner of Donahue Real Estate Co. in Dedham and Walpole. “The supply is still not matching the demand, and that’s driving prices and behavior. Anything that’s priced correctly and in decent shape is going within a matter of days.

“I sold a house last week to the first person who showed up, and she overpaid the asking price [of mid-$400,000] by $20,000. She wouldn’t let anyone else in the door.”

Pat Fahy, manager of Jack Conway & Co. in Plymouth, said houses in the $200,000 to $300,000 range that are geared to first-time buyers are going particularly fast as young people gain confidence that the economy is springing back and interest rates remain low. Fahy said she is also seeing more people return to the market after clearing up credit problems caused by foreclosures.

Donahue said he is seeing more people buying their second house — trading up or downsizing.

“We didn’t see that in the last four years, and they’re back in the market,” he said.

Both Fahy and Donahue said more people are paying large down payments or even buying homes outright with cash.

“I think people have been saving money,” Donahue said. “They’ve been out of the stock market, they’ve been out of real estate for the past four years, and they have money in their pockets.”

In Milton, Vieira said he has noticed many more 20-somethings who rented and built up their credit while the economy tanked, and are now ready to buy. He is also seeing homeowners who bought at the peak of the housing market, and are still waiting for prices to come back high enough that they can sell and make a profit.

Linda Vintro, managing partner of Uptown Realtors in Middleborough, said the inventory of homes for sale is low, in part because of fewer foreclosures and people who cannot sell because they owe more than their houses are worth. But she said with the influx of buyers, she has not been this busy in years — and this is her 37th year selling in the region.

Don Minchello, owner of Home Center Sotheby’s International Realty in Hingham, said what jumps out at him is the rise in prices and the decrease in the amount of time it takes for houses to sell.

In May 2012, houses in Hingham stayed on the market an average of 118 days, and the average sale price was $690,000, he said. This May, houses stayed on the market fewer than 60 days and sold for $751,000 on average, he said.

Specific examples also are telling, he said. A house on Central Avenue near Hingham Square was on the market last spring for about three months without selling. The owners tried again this May, with the same asking price of $799,000, and sold within a week, he said.

Minchello said condominium sales also are surging in Hingham.

When Derby Brook, a 20-unit condo development near Derby Street Shoppes, went on the market about a year and a half ago, only two units sold. In the past six months, though, sales have been brisk, with every unit taken as soon as it was listed, he said. The condominiums are priced at $699,000 to $769,000, and are selling in the low $800,000s, he said.

Like other communities, Hingham has fewer homes for sale than in the past. A year ago at this time, there were 244 properties for sale in Hingham; currently there are 174, Minchello said.

Last year at this time, there were 17 houses for sale for between $450,000 and $500,000; two weeks ago, there were two. There were no houses priced at $2.5 to $3 million in Hingham, compared with three a year ago, he said.

However, there are more homes priced between $1.5 and $2 million — 14 now compared with six a year ago, he said.

Johanna Seltz can be reached at seltzjohanna@gmail.com.
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