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SHREWSBURY, Massachusetts – According to a report by the Warren Group, the foreclosure crisis in Massachusetts has come to an end, which is great news on so many levels. Certainly, what I have been seeing in the field would lend credence to that, as we continue to experience the most bizarre spring market I can remember in my 28 years in the business. Buoyed by historically low mortgage rates, and fueled by pent up demand, things have been nothing short of bizarre throughout the region, really ever since the beginning of March and running through August.
Much of this has been due to the continued inventory shortage that I’ve spoken about before, which has been severely felt in certain sub-pockets of the price ranges. Interestingly, that shortage seems to have moved somewhat, underlying the ladder phenomenon that I have written about in many years, whereby the movement in the lower end properties is ultimately reflected a month or more later by the upper end. Suddenly, homes in the 600k range are flying off the market, and in short supply, something we haven’t seen here in Shrewsbury in quite a while. Final figures are hard to ascertain this early in the season, but it would appear that we have had a spike of about 10% from the bottom of the market and that shows no sign of slowing down for the rest of the year. This is not being reflected in the actual number of sales occurring, unfortunately, but rather in the response to new listings hitting the open market.
Suddenly, multiple over full price offers have become the norm, even on homes that were by no means “bargain priced” to begin with, and that even at their original listing price were setting new price records in the area. We aren’t talking about 1 or 2 thousand dollars either, but rather 10, 20, or 30K over asking price. That makes for a crazy scene indeed, and is often more frustrating for the agents than you might imagine.
For some sellers, who had been just barely upside down on their homes, this meant that they actually might be able to get out, without having to do a short sale, which has been a huge relief on so many levels. For other sellers, it simply means being able to drastically increase profit, and have more money to put into their next purchase. For a third group, those who purchased back in time when we were closer to the peak of the market, it simply means being able to at least sell for what they paid, and be able to upgrade, downsize or relocate without having to take a loss.
The question many sellers have been wrestling with is whether recent events make this the best time to sell, or whether we will be continuing to grow over the course of the coming years until we reach the peak levels seen in the past. My instinct tells me that much of it will depend on what interest rates and inflation do in the year to come. We are already hearing rumblings from those in the know that are deeply concerned about the negative impact that the low interest rates are having on other facets of the market. Clearly the Fed made the right decision to force rates to near zero in order to stabilize the economy, but as soon as they are confidant that things are on the mend, they will likely signal the intent to raise them again to stave off inflation, and when they do that, the real estate market may feel the pain. To some extent, we’ve already seen that a bit in the last month, as rates quietly crept up into the 4% range.
That’s why I happen to think that for the Sellers out there, now may be the best time they see for many, many years. As it is, I have Buyers just waiting by the phone for me to call them about a new listing, and that’s why some of them are selling before they ever even hit the market. Oddly enough, that sometimes happens more than people might think. One recent weekend alone I can a relocating client in from out of state, and of the 5 homes we looked at, 3 of them weren’t even for sale yet! Obviously there are always pro’s and con’s to those types of situations, but in the end it’s been working out just fantastic for Buyers and Sellers alike.
Where will we go from here? Well, only time will tell. The markets are nothing if not incredibly fickle. All I can say is that for the moment, things are doing great, and after the last few years when you see light at the end of the tunnel at last, it’s just a very comforting site indeed.
In the meantime, here is a great map that you might want to check out with a layout of the many cool listings we have on the market. Take a look and see what you think.
If you’d like to get together and chat, you can always send me an email at steveshrewsbury.net, and we can set up a time with a confidential meeting
Take a moment and check out the video below to see what some other Shrewsbury homeowners have to say.