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August 20, 2018

More high-end homes sold in Central Massachusetts

Photo | Edd Cote This six-bed, eight-bathroom home in Paxton is listed for sale at $1.4 million.

Buyer demand for affordably priced homes is high both statewide and in Worcester County, with a lagging inventory struggling to keep up and pushing the state's median home price well above $400,000 for the first time in history.

In Worcester County, the median price of a home in June was $307,000. That's a 10.9-percent increase from June 2017.

But that's nothing compared to the most luxurious homes in Worcester County, the sales of which have increased by 50 percent in June year over year, according to New Jersey-based Coldwell Banker Residential Brokerage, which has offices nationwide, including Worcester.

“I've seen more high-priced sales lately than I've seen in my 33-year career,” said Lee Joseph, a Worcester real estate agent with Coldwell Banker.

Even as rising real estate prices are pushing more homes into the realm of luxury pricing – typically $600,000 or more – the surging economy is creating more wealth in Massachusetts and would-be buyers are eschewing the highest-priced markets like Greater Boston in favor of places like Worcester County where their top dollar goes further.

“People are feeling a little more comfortable about pursuing their dream home than they were in the past,” said Cheryl Eidinger-Taylor, president and chief operating officer of Whitinsville-based ERA Key Realty Services.

More luxury sales

People benefiting from the good economy and playing the stock market are taking advantage of the relatively good economic times and shifting those assets to real estate to help fund their ideal home, said Eric Berman, communications director for the Massachusetts Association of Realtors.

Eidinger-Taylor said she has noticed more homes in the top 20 percent of price ranges being grabbed early and often.

In most Central Mass. communities, that price range typically means a home valued around $500,000 or $600,000, Eidinger-Taylor said.

According to real estate website Zillow, the number of homes sold for at least $600,000 increased by 29 percent over the last three years.

In Worcester County, that price range typically lands you a 3,000-plus-square-foot colonial, at least a two-car garage, four bedrooms, two bathrooms and maybe even a pool.

At higher price ranges, the increase is even more.

In the 12 months ending in August, 35 Worcester County homes sold for at least $1 million. For the same time period three years prior, the total was 21, according to Zillow.

The new trend in high-end real estate is a sign of the economy and relatively low interest rates, Eidinger-Taylor said.

Wealthier buyers

According to Data USA, a website pulling U.S. government data from several databases including U.S. Census information, Massachusetts residents are becoming more wealthy.

The percent of Massachusetts households earning an income of more than $100,000 rose from 32.6 percent in 2013 to 37.6 percent in 2016.

The largest of those brackets, the $200,000-plus club, made up 10.8 percent of Massachusetts households in 2016, the last year for which data was available.

In that same year, that bracket was the second largest, trailing only the $75,000 to $100,000 households.

Compared to 2013, the $200,000-plus bracket made up an 8.3-percent share of the state's households.

In Worcester County, median household income of a household was just shy of $70,000 in 2016, up from $62,483 three years prior.

Unemployment in Worcester County has stayed below 5 percent since March 2016, and the state's unemployment rate has remained at 3.5 percent since October 2017.

A more expensive market

The price of the entire Massachusetts real estate market is rising, said Berman, the result of low supply and high demand.

In June, the median sale price of a home hit an all-time high of $430,000.

More modestly priced homes may be pushed into that luxury price range due to those trends, but Berman said there are still more luxury buyers.

“Someone buying a house at $1.5 million is a different buyer than someone buying a house at $500,000,” he said.

Joseph, of Coldwell Banker, said she's already worked on selling three $1 million-plus homes in Worcester County this year and has been successful with two.

The third is a $1.4-million listing in Paxton for a six-bed, eight-bathroom, 9,200-square-foot castle on seven acres in the rural community.

Joseph is benefiting from people moving west from Greater Boston, where the low-supply, high-demand dynamic is pushing prices into the luxury range even for average homes.

The median price for a home in the Boston suburb of Weston was $1.5 million in June, according to real estate data firm The Warren Group, which is headquartered in Boston.

In Newton, that price was just shy of $1.4 million. In Wellesley, that figure is just over $1.5 million.

In all of those towns, the number of sales declined in June, indicating a lacking inventory.

With supply so low, buyers are being forced to write offers that don't include typical homebuyer protections like home inspections, financing and other contingencies, Joseph said.

So instead of competing with wealthy Boston-area executives for the slim pickings in the luxury real estate market of Greater Boston, those same people are looking to get more bang for their buck a little bit further away, Joseph said.

All of her luxury home clients are relocating to the area for work in high-paying fields like medicine and research.

“As people are forced out of the Boston market, they start to move west where the higher-level home is still less than they would need to pay in the Boston market,” Joseph said.

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