SPRINGFIELD — Pat Wheway, a broker associate for Coldwell Banker, listed a home — a 1,500-square-foot split level in Springfield — at 9 p.m. on a Thursday and got her first phone calls before 10:30.
“They wanted to be the first ones in that house in the morning,” she said. “It’s very busy.”
Interest is especially high for homes priced for first-time buyers, Wheway said. The Springfield house garnered 21 offers in three days.
Some potential buyers these days are so anxious and willing to speed the process that they waive the home inspection, real estate professionals say. Some aspiring buyers offer more than their mortgage lender will appraise the house for, promising to make up the difference out of their pockets.
“It’s really hard to express to people how crazy it is,” said Elias Acuna, president of the Realtor Association of Pioneer Valley and a broker associate at Maria Acuna Real Estate in Springfield. ”Are these prices even realistic because of the appraisals?”
Acuna said he’s seen a home in Springfield get 30 offers in a few days, then sell for tens of thousands of dollars over the asking price.
The Realtor Association of Pioneer Valley is out this week with its latest sales and price statistics. The median sale price of single-family homes across all three counties was up 16.7%, from $224,700 in March 2020 to $262,250 in March 2021.
Sales volume rose 3.5%, from 401 homes sold in March 2020 to 415 sold last month.
- Hampden County: The median price was up 23.2%, from $201,750 to $248,500. Sales volume was up 11.1%, from 280 to 311.
- Hampshire County: The median price was up 18.2%, from $283,500 to $335,000. Climbed from 81 to 83.
- Franklin County: The median price was up 13.3%, from $226,000 to $256,000. Volume was down from 37 homes sold in March 2020 to 24 sold in March 2021.
Statewide numbers are not available yet for March. But in February, statewide prices were up 17.1% to a median of $462,500 for a single-family home, according to the Massachusetts Association of Realtors. Volume was up 8.1%.
The Pioneer Valley’s inventory of homes for sale was down 68.5% from last year. There were 1,152 homes for sale in March 2020. Just 363 were on the market last month. At this rate of sale, the local market only has a few weeks of supply, Acuna said.
Acuna said he’s also seeing high demand for two-family homes, with buyers looking to live in one part and rent out the other part.
Neither Acuna nor Wheway is seeing institutional investors like pension funds snapping up Springfield-area housing, a phenomenon that’s been seen elsewhere.
Wheway said it’s difficult for first-time buyers to find a home. Demand has been pent up during the coronavirus pandemic and interest rates are low, leading to lots of people looking for homes in that price bracket. And there are not too many places available, with folks reluctant to open their homes for showings because of the virus.
“A house sells and the other realtor calls saying, ‘My clients are crying. They wanted that house,’” Wheway said. “I wish I had three more to sell. I don’t.”
Angelica and Jevon Burrell of Springfield have been turned down after submitting offers to buy “four or five” times over the last year. Angelica said she’s lost count.
“We are going $20,000 over asking price and it’s still a no,” she said. “It’s very, very discouraging.”
They recently expanded their search beyond Springfield, hoping to increase their chances by looking in Agawam and specifically its Feeding Hills neighborhood.
They are living in Springfield now with a family member. The couple have two children and expect their third in November. The impending happy arrival, Angelica Burrell said, gives the couple a deadline.
Arrha Credit Union president and CEO Michael Ostrowski said he fears buyers are overpaying and setting themselves up for a difficult situation if they lose a job or have to sell.
“I wouldn’t want to be a young person starting out trying to buy a house right now,” he said. “I’d be scared.”
But he also understands what’s driving the market. Working from home during the pandemic means people need more space. The economy is improving. Interest rates are low.
FreddieMac.com said the rate is 3.08% for a 30-year fixed mortgage. Ostrowski said that translates to a family with a $200,000 mortgage paying about $700 a month in principal and interest.
But he said real estate people are telling bankers to expect another 9% in price gains through the rest of the year. That will work out to a 25% gain in 24 months.
“Its OK for prices to go up, but it’s hard to justify the ridiculous percentage gains,” he said. “Housing prices normally go up 2% to 3% a year.”
Lenders, he said, are bound by the appraised value.
And no one should waive the inspection, he said — ever.
“I just think that it is crazy,” Ostrowski said, adding that out-of-town mortgage lenders sometimes allow it. “If you deal locally, you feel so much safer.”
Ostrowski said buyers need to remember that construction and repair costs are going up, too. That’s driven by an estimated 180% spike in building material costs.
Wheway said she won’t allow a buyer she represents to submit an offer if they waive the inspection, unless the buyer consults with an attorney and signs a formal waiver. And she doesn’t advise that either.