Berkshire Business Outlook: Real estate sales soar in 2017, but can the trend continue?
Maybe it's because aging baby boomers believe it's now or never to buy that second home in the Berkshires. Or maybe people are simply making more money now.
Whatever the reason, something is giving the Berkshire real estate market a nice boost.
"We're not in a boom now, we're now in a gently steady appreciation," said longtime realtor Nancy Kalodner.
The volume of real estate sales hit a high last year after a decade of slumps and a slow upward crawl.
"When real estate is good, so likely is our economy," said Cortney Dupont, the president of the Berkshire County Board of Realtors.
The board's CEO, Sandy Carroll, said 2017 activity "shows confidence in the economy and job market."
Sales of all kinds peaked in 2017 with $466 million sold in 1,833 total transactions — the most since 2005, according to the board's 2017 Berkshire Market Watch report.
About half of those sales occurred in South County, an area popular with second homeowners and New York City area transplants. Sales of single-family homes in the southern towns saw record-breaking growth. In the Northern and Central Berkshires, sales were slightly up from last year.
All this mostly good news follows a dip, then slow climb after the stock market crash in 2008.
The one glitch that might mess with the good tidings? Not enough homes for sale.
Carroll said this inventory problem is critical to how the market will perform going forward.
If new development doesn't keep up and sellers aren't selling, then this will hold real estate growth down and hike prices.
"Inventory is getting scooped up very fast," said Pittsfield-based realtor Barb Hassan. She's seeing high demand for homes in the $180,000 to $280,000 range, for instance, and not enough supply.
But Hassan and other realtors say they're waiting for spring, when homeowners start to put houses up for sale, to see if the inventory situation improves.
Hassan also said she's seeing an uptick in commercial interest and sales, mostly under $200,000, and that in Pittsfield, the multi-family home investment market is "healthy."
Those who've been slow to make a move in South County started to pick up the pace last year.
Kalodner, a broker with Lenox-based Cohen & White, said the 2008 financial crisis stoked a "decade-long emotional hesitancy" that broke last year, especially among second home buyers.
"Nobody needs a second home, so this pent up demand, enthusiasm, optimism of getting into real estate has shown itself," said Kalodner, a South County realtor for 40 years.
Kalodner said she's seeing buyers who are "just getting out from under college tuition," or baby boomers who realize this is their chance for a home in the Berkshires.
"People are thinking, `interest rates are rising, I may be able to find something now that I might not be able to afford in a few years.' We're all getting older — it seems more and more pressing."
In North Adams, Kim Murphy Burnham is seeing something different that's about to really take off.
Her Williamstown-based firm, Burnham Gold, just opened another office on Main Street in North Adams.
Burnham said she did it to get ahead of what she projects to be an increasing trend of young people buying moderately priced homes after coming to the town for MassMOCA art events and music festivals.
"It's already happening," she said. "Most of the buyers are from out of town."
North Adams saw a 24 percent increase in home sales in 2016 from the previous year, and a 6 percent decrease in 2017.
Great Barrington, South County's hub and largest town, had a similar jump and dip.
In the south, real estate is driven by people moving from cities for "quality of life," said Tim Lovett, co-owner of Berkshire Property Agents.
"Great Barrington has become a cool brand that's actually known in Brooklyn," he said.
But now there is also big movement afoot on the condo front in Great Barrington. Roughly 60 units will rise on Bridge Street in the next two years, and various projects around town will likely bring that number closer to 100 soon after.
Lovett said there is a strong need and desire for these, as couples want to downsize, or working singles want simplicity.
While realtors aren't sure whether the market will flourish the way it did in 2017, one thing is fairly certain: interest rates are expected to rise, Dupont said.
Heather Bellow can be reached at email@example.com or on Twitter at @BE_hbellow and 413-329-6871
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