With the housing market beginning to make a recovery (albeit slowly and long overdue), Massachusetts is now facing a new issue – no one is selling! When the housing market crashed, there were large numbers of sellers and no buyers. But now, Massachusetts is facing the opposite problem, with plenty of buyers and not enough homes on the market.
The amount of houses on the market has hit an eight year low in Massachusetts, which is creating issues for people either wanting to buy their first home, move to the state, or simply upgrade to a better home. Realtors are scrambling as the spring season approaches, because it is typically the busiest time of year for buying. However, at this rate, there isn’t nearly enough inventory to satisfy the needs of all the buyers.
What’s the problem?
There are many factors that have contributed to the low inventory here. Some homeowners can’t afford to sell their homes because they are underwater on their mortgages. Others simply don’t think the time is right to sell. Others are facing the same problem that buyers are – if they sell, there is nowhere else to move.
Experts believe there must be an influx of out of state buyers, as well as first time buyers, contributing to the problem. They say that if it were just Massachusetts locals buying and selling, then there shouldn’t be a problem. But when you factor all of these new buyers into the mix, there simply aren’t enough houses on the market to satisfy the high demand.
Another big problem here is underwater mortgages. Although the overall average home value in the U.S. seems to be steadily improving, it isn’t dramatic enough to allow many of these underwater homeowners to sell their homes.
Even the people who are not suffering from underwater mortgages face what many are calling a “recession hangover”. Basically, many people are afraid to upgrade to a bigger home, because the recession was so devastating to the economy. And, although home values are indeed improving, it’s not to a point where it’s high enough to justify a move. The value of homes is still far less than when many people purchased their home.
For some, they can’t move, because there is nowhere to go. For the people who are looking to upgrade to a larger or better home, there simply isn’t anything available. That means they can’t list their house, because in the current market, they could sell their home and then not have anywhere to move to!
The lack of inventory is creating further problems for the area because the small number of houses on the market is creating bidding wars and price inflation. With such high demand and such little supply, prices are rising as buyers are struggling to find homes. Unfortunately, these increases are not quite high enough yet to encourage more buyers to enter the market.
The low supply in Massachusetts is also causing a huge marketing campaign among realtors in the area as the approach the spring season. Realtors are concerned that without the supply, they will not be able to do well in their prime season. As a result, marketing efforts are soaring all over the state, as realtors attempt to encourage more sellers to dive into the market.
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