Carole Owens: What could a Berkshires 'boom' look like?
This summer there was a sense that Berkshire County was experiencing a boom in real estate sales. Now as summer ends, do the facts support the theory?
Patricia Harris is the Registrar of Deeds for Berkshire Middle District, which includes Becket, Dalton, Hinsdale, Lee, Lenox, Otis, Peru, Pittsfield, Richmond, Stockbridge, Tyringham and Washington. In comparing sales for summer 2019 with summer 2020, Harris found there was an increase.
In 2019, sales deeds numbered 215, 246 and 263 in June, July and August, respectively. Over those same three months this year, those numbers were 269, a 25 percent increase; 271, a 10 percent increase; and 276, a 5 percent increase.
Harris added, "I believe that we would have experienced more transactions if there was more inventory on the market."
With respect to sale prices, Harris noted, "Compared to June of 2019, the excise tax jumped significantly; it rose 48 percent." The excise tax is collected on the sale price at a rate of $4.56 per $1,000, therefore, the total excise tax goes up as the price of the house goes up.
Reflecting on countywide sales, Sandra Carroll, CEO of Berkshire County Board of Realtors and Multiple Listing Service Inc., supported Harris' findings.
The Board of Realtor's Berkshire Market Watch Report found that "closed sales in July [for single family dwellings] are up 11 percent countywide compared to last year."
BMWR also reported that "the dollar volume of home sales has jumped 16 percent year-to-date compared to last year [and] a 68 percent jump in July residential sales to $59 million dollars transacted compared to $35 million last year."
Sales rose, cost of individual sales rose and concomitantly inventory fell. Homes available lagged behind demand. "In July, countywide inventory fell to 511 homes on the market compared to 913 last year; a 44 percent decrease."
The trend continued into August, with a 22 percent increase in home sales. The condo market reflected the single-family home market with Inventory down, sales and sale prices up according to BMWR.
The boom in the Berkshires may be the result of a "flight to safety" amid COVID-19 — a desire to leave more densely populated areas. It might also reflect the increased popularity the Berkshires experienced overall. In the last few years. lodging reservations, event attendance, and the length of the season have all increased. Once the Berkshire "season" was 10 weeks. In recent years it has lengthened and is becoming a year-round destination. Whatever the reason for the increase in sales, the question is: How will it impact the Berkshires?
In 2019, Berkshire County had a year-round population of approximately 124,000 down from 131,000 in 2010. The rise in residential sales during the summer of 2020 may or may not have an impact. However, if the trend continues, at what point will it have an impact?
Reviewing the deeds of new sales, Harris said, "We've also noticed that many of the deeds indicate the purchaser has an address other than the property address."
That could indicate a second-home owner that is a part-time resident, or could indicate a purchaser who does not intend to occupy the property at all.
Currently the percent of second-home owners in Berkshire towns ranges from 16 percent to 64 percent — for example, 16 percent in Lee, 54 percent in Stockbridge and 64 percent in Otis. Is the percentage of second-home owners increasing? Ironically, will those escaping density create density here?
In 2010, the U.S. census recorded 69,000 houses with 68 percent of them owner-occupied. Is the new wave of "Airbnb" units having an impact? How many "investment houses" are there now and what is the impact?
The 2020 census has not been published; in 2010 Berkshire County looked like this:
Under 5 years of age: 4 percent
Under 18 years: 16 percent
65 and over: 23 percent
Female: 51 percent
White: 91 percent
Black: 3 percent
Hispanic: 5 percent
In same house more than a year: 91 percent
High school diploma or above or more: 91 percent
Those living in poverty: 11 percent
The number of people per square mile in Berkshire County is 141 compared to 27,000 people per square mile in New York City. The population of Berkshire County has been consistent — consistently small. The last large population shift was downward. It happened when General Electric Co. left Pittsfield. It might be that the last population boom was in the 18th century.
In the mid-1700s, land in the Massachusetts Bay Colony was scarce. When the westernmost part of Hampshire County (now called Berkshire County) opened, people swarmed. Populations in early settlements went from one to 10 to hundreds. It happened, seemingly, overnight.
If the current real estate boom continues, how will the Berkshire population change? Who will the new homeowners be, and what will their needs be? What are the implications for planners, elected and appointed officials?
A writer and historian, Carole Owens is a regular Eagle contributor.
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