The Incredible Shrinking House
In 12 towns across Central Massachusetts, the number of homes on the market that cut their asking prices was greater in May than it was in the same month a year ago.
In 14 towns, the median price cut was greater than it was a year ago.
Those two statistics overlap in Douglas, the Fiskdale section of Sturbridge, Warren, West Brookfield and Winchendon. In those towns, there were more listings with price cuts in May than there were a year ago and those price cuts were larger than they were a year ago, according to data compiled by Seattle-based real estate tracking firm Zillow.
The Agent's Perspective
Judy Reynolds, owner of Evergreen Realty in Sterling, said these towns show that the residential real estate market is recovering from east to west.
"In smaller communities, there's less demand, especially if you're going to travel that far out, in terms of commute time," Reynolds said.
Also, in many instances, sellers have been somewhat unwilling to admit to themselves that their homes simply would not fetch anything close to what they would have just a few years ago. In smaller, less affluent towns like those listed here, the boom may not have been as dramatic as it was in highly desirable locales, but the bust has been just as bad.
Some sellers are "ambitious on price," Reynolds said. But when a property sits on the market for literally hundreds of days, "They say, ‘I'm done. I want to sell.' That's when they make a big price cut. They're chasing the market down."
And even though Douglas, Fiskdale, Warren, West Brookfield and Winchendon are all small, rural towns, they highlight the difficulty sellers are having across the state, said Katie Curnutte, public relations manager at Zillow, an online real estate tracking website.
"What's been happening in Massachusetts is that it's a very challenging environment for a seller right now to figure out how to price your house. April through October of last year, prices climbed but in the fall, they fell and now they're close to flat," she said.
"When you combine the ups and downs seen in Massachusetts and the expiration of the tax credit, sellers don't know what to expect," Curnutte said.
The federal tax credit for homebuyers expired in April. In May, sales of new homes plummeted by 30 percent to an all-time low.
"We expected a drop-off," Curnutte said, "but that was pretty dramatic."
Curnutte said it's important for sellers to concentrate on comparable home sales in their area.
But even that can be a serious challenge in small towns where there may not be multiple houses for sale in every neighborhood, Reynolds said.
At that point, "you have no data to help somebody understand what their house could sell for. In some towns, there may be nothing in the $350,000-$400,000 range, so you go to surrounding or similar towns, and there are prices in that range, but they haven't sold. More than likely, they're overpriced, and that's hard for some folks to understand," Reynolds said.
"It's devastating for some people to know that they are going to have to bring money to the table to get out of the mortgage."
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