Unless you’re selling, hot housing market is concerning
Median home price surpasses $500,000
MANY PUBLICATIONS have written a version of the same story.
The Cape Cod Times reports that home sales on the Cape keep breaking records, making it the “best time ever to sell.” An April headline in the Boston Globe wrote “Houses in Greater Boston cost more than ever last month,” with the median single family home priced at $725,000.
The Telegram & Gazette reported in February that single family home prices in Worcester County jumped 18.9 percent in January. The State House News Service reported in January that Massachusetts home sales hit a 16-year-high, before reporting the next month that sales hit a 17-year-high.
The Springfield Republican reported that in Western Massachusetts, multiple bids are driving homebuyers to waive inspections and offer more than their mortgage lender will appraise the house for.
So it was hardly a surprise when the real estate data firm The Warren Group said this week that the median price of a single family home in Massachusetts surpassed $500,000 for the first time.
What are the implications of the red-hot housing market? Some are obvious: It’s a good time to sell and a bad time to buy. Others are less obvious. The Telegram & Gazette reports some homeowners are being hit with surprise property tax increases as their home’s assessment goes up.
Boston Globe reporter Tim Logan, in a story Thursday, wrote that there are several potential downsides to the hot housing market to the Boston region. Businesses considering adding jobs in Boston must consider the high cost of housing when setting wages. So companies may be more inclined to hire in cities with a cheaper cost of living. Individual homebuyers – often talented individuals in their 30s seeking to put down roots – may be pushed out of Boston to a neighboring state or another part of the country. The market feeds into inequality since, as Logan notes, white families are more likely to own homes than Black and Latino families, so white households generate more of the wealth from a booming market.
Even before the pandemic, Gov. Charlie Baker was highlighting the high cost of housing in advocating for his zoning reform bill, a version of which he signed into law in January after years of negotiations. Earlier this month, Baker made clear that building housing supply will continue to be a priority once the pandemic ends.WGBH reported that Baker expressed extreme frustration at the lack of new housing supply in Massachusetts, which contributes to higher prices. “We don’t have enough affordable housing,” he said. “We don’t have workforce housing. We don’t have senior housing. We don’t have enough housing of any kind.”
“It’s an equity problem. It’s an economic-development problem. It’s a community-development problem,” Baker said of the lack of housing supply. “It makes huge differences with respect to where people can actually afford to live here in the Commonwealth, whether or not they can stay, and where they make decisions about where to start a family.”