Vol. I No. 04 9/15/2020
The Real Estate Boom
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 an increase.
|Year 2019:||Year 2020:|
|Deeds in June: 215||Deeds in June: 269 (Increase 25%)|
|Deeds in July: 246||Deeds in July: 271 (Increase 10%)|
|Deeds in August: 263||Deeds in August: 276 (Increase 5%)|
Harris added, "I believe that we would have experienced more transactions if there was more inventory on the market. 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 homeowner.
Harris concluded, "Compared to June of 2019, the excise tax jumped significantly; it rose 48%."
The excise tax is collected on the sale price at a rate of $4.56 per $1000, therefore, the total excise tax goes up as the price of the house goes up.
Reflecting on county-wide sales, Sandra Carroll, CEO, Berkshire County Board of Realtors and Multiple Listing Service Inc., supported Harris' findings.
The Board of Realtor's Berkshire Market Watch Report (BMWR) found, "Closed sales in July [for single family dwellings] are up 11% countywide compared to last year."
BMWR also reported, "the dollar volume of home sales has jumped 16% year-to-date compared to last year… [and] a 68% 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% decrease."
The trend continued into August with a 22% increase in home sales. The condo market reflected the single-family home market with inventory down, sales and sale prices up.
The boom in the Berkshires may be the result of a "flight to safety" from more densely populated areas during Covid. It may 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. Whatever the reason, locals may ask: what is the impact? Will the trend continue? The Berkshires has a year-round population of approximately 126,000. If the trend continues, what else about the Berkshires might change?
Currently the percentage of second homeowners in Berkshire towns ranges from 16% to 64% -- for example, 16% in Lee, 54% in Stockbridge, and 64% in Otis. Will the percentage of second homeowners increase? Ironically, will those escaping density create density here? Who are the new homeowners and what are their needs? What are the implications for planners and for elected and appointed officials?