Real Estate Perspective 2013-2014
This is to be the first in a regular series of real estate columns I'll be writing for iBerkshires. I want to thank iBerkshires for inviting me to write these columns and at the same time thank those who read them and invite you my readers to provide me with suggestions for new columns on topics you would find of interest.
Naturally the first of the series should be on 2013 looking back and 2014 looking ahead.
There is a great deal in the national and even local media on real estate trends and statistics so I hope to provide a slightly different slant offering primarily a local flavor. Reading national headlines proclaiming a dramatic increase in sales or median prices leaves one naturally wondering how come we or you in particular if you're a seller in this market, haven't experienced the same results.
Of course, real estate is local in nature. We all know that but there are national and even global events and currents that impact even a local market like the Berkshires.
The market here in the Berkshires was significantly improved from a sales and price perspective in 2012 over 2011; however, 2013 was a mixed bag around the county. Pittsfield grew sales nicely and South Berkshire saw improvement while North County was not so fortunate. In the north, sales fell in many towns and remained flat in Williamstown.
In prior recession/recovery periods, we were accustomed to seeing sales recover following a recession much like spring does, from south (NYC) moving northward, first through Southern Berkshire and on up the county. Therefore if this were a "normal recovery" we could expect a similar trend with North County following the trend that South and Central County experienced in 2013. Mind you it was not a rush or landslide by any means, just a modest uptick.
This recovery, such as it is, has been stimulated by exceedingly low interest rates (Fed policy) and dramatically lower prices. It, however, has been modest due to, as we all know, weak employment figures. North County as well as the core area of Pittsfield has traditionally been a stronger industrial base than South County, which is largely second home and tourist based. Williamstown in the north centers now on Williams College for its financial base having lost virtually all industrial and manufacturing jobs in the past 45 years.
The phenomenon of retiring baby boomers cannot be overlooked either, as a substantial factor in the real estate trends of today. As this aging and very significant demographic retires this population is gravitating to smaller homes and often to warmer climes where winters are not such a factor.
Sellers of real estate need to take these trends into consideration as they approach the market. With an ample supply of homes on the market plus the addition of new construction, supply is still outpacing demand be a considerable degree. Of course this is good news for buyers who have many reasons to plunge into a home if they are in a position to do so.
The year 2014 is likely to see a stable to very modest improvement once again, depending on where in the county the real estate is located and of course on other factors such as the direction of interest rates as we move through the months ahead. There is absolutely no justification for postponing selling based on expectations for a significantly rising market. That doesn't appear to be in the forecast based on market and economic trends.
Buyers should carefully consider the possibility that higher interest rates as frequently forecast in various media may impact their options going forward.
In sum, unless there is any sort of major new force or series of high impact events that might affect the economy and housing in particular, it would make little sense to postpone your housing plans.
Paul Harsch, president and founder of Harsch Associates, a Berkshire County based real estate brokerage firm, is a licensed real estate broker in Massachusetts, New York and Vermont, serving a diverse residential, business, commercial and land client base for 40 years.