Great Barrington — The real estate market in Great Barrington and southern Berkshire County is in a place where it has rarely, if ever, been. Home sales prices and volume are at historic highs, while inventory is a fraction of what it was a year ago. And it has some town officials worried.
That was the upshot of a presentation by Eric Steuernagle and Tom Doyle of the Berkshire Board of Realtors at the Sept. 21 selectboard meeting. Steuernagle explained key data points on recent developments in the market. It’s hard to tell from watching on Zoom but it looked like several jaws dropped.
See video below of a presentation by Eric Steuernagle and Tom Doyle of the Berkshire Board of Realtors at the Sept. 21 selectboard meeting via Zoom. Fast forward to 32:00 for the discussion:
Just about everyone who has been following the market knows it has moved considerably since the COVID-19 pandemic took hold in mid-March. But the hard numbers still present a sobering reality. According to the realtors board, residential sales in Great Barrington have continued to surge past 2019 rates, with a year-to-date increase of 16 percent in total number of sales and a 43 percent increase in the dollar value of those transactions.
“So that’s basically more houses going on the market, which is what that translates to,” Steuernagle explained. “That’s pushed the median sales price of houses in Great Barrington to $466,540, so that is up from $380,000 last year.”
Last month, 19 homes changed hands in Great Barrington, which was up seven houses from the previous August. It was, however, down from the 24 in July 2020. So sales volume essentially doubled from August 2019 to July 2020.
Listing prices in the Great Barrington market are up 4 percent year-to-date. In August, 30 new homes hit the market with listing prices totaling roughly $20 million. Not only have prices risen but inventory is low. There are 87 residential homes on the market right now in Great Barrington compared to 135 at this time last year. And interest rates, another key driver of consumer real estate demand, are at historic lows.
“So as you can see, there is definitely a shortage of homes for sale, which is the driving force of our market,” Steuernagle said. “We have high demand, but low inventory. It was kind of a perfect storm.”
Currently in Great Barrington, there are 51 homes under contract, compared to 23 at the same point last year, a phenomenon Steuernagle described as “pretty crazy.”
Selectboard member Leigh Davis asked Steuernagle whether buyers typically tell real estate agents what they want to do with a property — whether they plan to live in it full-time or rent it out, for example.
“We do not keep track of that data but I can tell you from personal experience … a lot of this market is driven by COVID,” Steuernagle replied. “People are escaping urban areas.”
Often what happens is people looking to leave urban areas — and not just Boston and New York, Steuernagle emphasized — search for homes to rent for a year or two. Rental homes in South County are scarce. When they are unable to find a rental, those people look for homes to buy.
Some of those people are planning to stay here and raise families, but it does appear that they will at some point migrate back to the urban eras from which they came, Steuernagle said.
Many in the real estate business in Berkshire County and other rural enclaves not too far from urban areas — such as Litchfield County, Connecticut, and New York’s Hudson Valley — have compared the exodus to the one that occurred after the 9/11 terrorist attacks on New York and Washington.
But Steuernagle is convinced that the comparison misses the mark, in part because Berkshire County now has better telecommunications infrastructure.
“The difference I see now is we couldn’t sustain work-from-home jobs back in 2001,” he said. “Now people can easily work from home with access to fiber optic internet.”
It is true that in 2001, broadband was very difficult to come by in South County. Most homes were still on dial-up or DSL. Since that time, South County towns such as Sandisfield and New Marlborough remain without reliable broadband. But others that are not served by the cable company Charter Spectrum have nonetheless received service from broadband providers such as Fiber Connect, as Egremont and Monterey have. Or they have started their own municipal public broadband utilities, as Alford, Mount Washington and Otis have.
Steuernagle did say that cell phone service remains a problem in some areas of Berkshire County. That’s clearly the next technological challenge the county faces.
Davis also wanted to know if the board of realtors knew whether school enrollments were rising in the area. Steuernagle did not have that data but said he and Doyle have heard that enrollments in both the Berkshire Hills and Southern Berkshire regional school districts have risen.
Enrollment numbers for 2020 do not become official until Oct. 1 each year and will likely be released at the end of that month, said selectboard Chair Steve Bannon, who also chairs the Berkshire Hills school committee.
Selectboard member Kate Burke said she has been hearing from constituents who have been renting houses and are now being turned out of their homes by landlords who are putting their houses on the market for a price the tenant cannot afford.
Davis said her fear is that when they return to wherever they came from, the new buyers of former rental homes will rent them out on Airbnb, the online vacation rental service, which will further deplete the supply of homes and rentals for working people.
“It speaks to me about our ability to regulate Airbnb because I fear that this is just going to be an investors’ market,” Davis said. “This is really frightening to me because I would hate all these houses to become Airbnbs in a year’s time.”
Bannon said he did not disagree with Davis. He pointed out, however, that the town had tried to add regulations governing Airbnb and similar operations a couple of years ago but faced “a lot of opposition to it.”
As for the best way to increase the supply of housing, Doyle, also a developer who had proposed an apartment complex off Route 7 south of downtown, was blunt:
“Smooth out the approval process. You’ll have more supply of housing stock. Very simple.”
For an in-depth report on the Berkshire County real estate market, please see the article in our Real Estate section by Sandra Carroll, CEO of the Berkshire County Board of Realtors.
