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WORCESTER, Mass. - February 14, 2010 - The Massachusetts Association of Realtors® (MAR) put out their monthly “hot topic” question for January 2020. They asked Realtors® to “describe their clients’ current attitudes towards the home buying and selling process as housing inventory continues to plunge”.
As for buyers, over 90 percent of respondents reported that their buyer clients were either somewhat frustrated but still hopeful and aggressively in the market (57%), increasingly frustrated and complaining or weighing other options, (24%), or very frustrated and taking a break from house-hunting right now (12%). “There is always going to be segments of buyers and sellers that are somewhat immune to market conditions due to either their financial health or family situation,” said 2020 MAR President Kurt Thompson, broker at Keller Williams Realty North Central in Leominster. “But for the rest of buyer and seller clients out there, the lack of inventory is a frustrating situation.”
Thompson stated “While football-free weekends and mild temperatures in January helped, it’s truly the demand to live in Massachusetts that has kept prices going up.”
With inventory of single families and condominiums still below 10,000, we are reaching record lows in Massachusetts. As of today, there is a 1.49 months supply of inventory of single family homes available in the state. Months supply of inventory is a calculation that quantifies the relationship between supply and demand within the housing market. A balanced market is considered to be somewhere between a 4 and 6 months supply of inventory. Below 4 months, it is considered a seller’s market, giving the seller's asking price power. If the inventory is above 6 months supply, it is considered a buyer’s market and gives buyers the upper hand in negotiations.
The Worcester market is no exception to the decline of inventory. Months supply of inventory of single family homes is down 43.64% from this time last year. Prices of homes continue to rise as inventory goes down. Worcester’s hot multifamily market has seen record breaking prices to start off 2020. Months supply inventory of multifamilies is down 34.88% as demand continues to grow steadily. Just in the last few weeks, we are seeing offers as high as $90,000 over asking price.
Low inventory is not only in Massachusetts. According to the 2020 National Housing Forecast from Realtor.com, inventory will still struggle to grow throughout 2020 and could instead “reach a historic low level.” With unemployment still near 50-year lows, interest rates predicted to stay below 4% throughout the year, and the stock market at all-time highs, the main concern for home buyers will not be what they can afford to buy. Instead, the concern will be what they can actually find to buy.