First quarter real estate sales in 2022 slowed over the sales pace set in 2021, but only slightly. The lack of inventory continues to hinder sales, and we anticipate that rising interest rates will have a future effect as well. That said, there have been no reports that buyer demand is slowing. While condominium sales rose 19% this quarter over the first quarter of 2021, land sales slowed by 25%. Land transactions in the south and north part of the county fell dramatically, yet the central land market remained stable. Sales of multifamily properties fell in north and south county but continued a strong upward trajectory over the last several years in the central market.
North county sales overall decreased in the number of sales, but the dollar volume transacted rose considerably. Central Berkshire saw rising sales and prices in all property types. Southern Berkshire saw both sales and dollar volume decrease in the first quarter of this year compared to the same time last year. The total number of all real estate transactions sold during the 1st quarter of 2021 topped 459 while overall, this year fell to 443 sales. Click here for the full PDF report to print or share! Historically, this is still a robust market, when looking beyond the boom of last year and instead comparing to the past years of sales data.
| Change in 1st Qtr # of sales in 2022 compared to 2021 |
|
| Residential | – 2% |
| Multi-Family | – 2% |
| Condominium | + 19% |
| Commercial | 0 % |
| Land/Lots | – 25% |
| Overall Market | – 3% |
Sales were strong in the central part of the Berkshires in 2022, but sales slowed overall in the southern part of the Berkshires. North County sales slowed in the number of units transacted but rose greatly in the dollar volume. The lack of homes for sale added pressure to the market, and this pressure is not expected to let up for the rest of 2022.
| 2021 | 2022 | |||
| All Sales | $ Sold | # Sold | $ Sold | # Sold |
| North | 103 | $18,677,868 | 90 | $23,271,985 |
| Central | 180 | $41,981,126 | 205 | $57,063,602 |
| South | 176 | $94,761,936 | 148 | $77,600,150 |
| Total | 459 | $155,420,930 | 443 | $157,935,737 |
Residential Report
The number of single-family residential homes sold in the first quarter of 2022 fell by 5% in both the northern and southern region, while sales rose 2% in the central region. With 277 single family home sold during the first quarter of 2022, this resulted in an overall slight decrease of 2% countywide. It is significant to note that there was a large jump in the dollar volume transacted in both northern and central sales of single-family homes. The southern market retracted by 3% in the dollar volume leaving an overall market increase of 9% dollar volume sold in the first quarter of 2022 compared to 2021.
Condominium Report
Condominium sales continue to grow, dependant on the availability of condo units. Sales in north and central Berkshire are responsible for the overall gains countywide. Condo sales in southern Berkshire slowed considerably during the first quarter of 2022. This market dynamic also affected the average sales price, rising in northern and central Berkshire and falling in southern Berkshire. The total number of sales, 44 compared to 37 last year during this first quarter, is still significantly higher than the years preceding 2021. Condominiums continue to be an affordable market alternative when faced with a lack of available inventory in other home options.
Multi-family Report
Overall, the multifamily sales in Central Berkshire soared this year-to-date, and are reflecting the highest sales rates in our history. Last year, there were historic high multifamily sales in the northern and southern region, but in the first quarter of 2022 those regions didn’t keep pace with last year. The Berkshire multifamily market had 1 fewer sale than the same time in 2021, but $2 million more in dollar volume transacted. As the market expands, this helps fill a void left by a lack of inventory in the single-family residential market. In looking specifically at northern and central Berkshire, multi-family units are affordably priced and an accessible option for many.
Land Report
In the first quarter of 2022, land sales slowed, but it is important to note that this is compared to 2021, a year that broke all records. Land sales jumped so considerably high in 2021, it is hard to use that as a benchmark measurement. While the market might seem to have cooled compared to last year, historically land sales continue to remain strong in all parts of the region.
Commercial Report
Overall, the number of commercial sales in the Berkshires were the same as last year, with a falling dollar volume of transacted properties sold. It is a strange time for commercial real estate as changing needs are impacting almost every facet of the commercial business due to pandemic aftereffects and industry and employment changes. This shift is most evident when looking at the commercial real estate market in the southern Berkshires, which had the largest dollar volume decrease in the county. It is also important to note that commercial sales are optional within the Berkshire MLS, and reports my not reflect all transactions
Additional Market analysis
We offer here some broader perspectives on the local real estate market as provided by Lawrence Yun, Chief Economist and head of the Research Group at the NATIONAL ASSOCIATION OF REALTORS®.
Inflation (Released April 12, 2022)
Inflation continues to kick higher with an 8.5% consumer price rise in March. Aggressive inflation will force the Federal Reserve to raise interest rates multiple rounds this year and actively pursue quantitative tightening. That is why mortgage rates recently have shot up so high.
Higher mortgage rates will inevitably pull home sales down in the coming months and slow home price appreciation. My projection at the moment is for a 10% reduction in home sales this year and a 5% home price gain by the year’s end.
Rents rose by 4.4%, even though many private sector data sources have been pointing to even faster gains. Hotels and motels are charging 29% more. Home price is not part of the consumer price index but has hurt first-time buyers, especially with rising mortgage rates. Clearly, more construction of both apartments and single-family homes is needed.
REALTORS® drive much more than the general population and have felt the pain at the pump. To quantify this, gasoline prices were up 48% from a year ago. Higher energy prices will also filter up to airfare, which rose 24%, and pretty much to all goods that are transported. Higher energy prices moreover will provide revenue to energy-producing countries including Russia, irrespective of economic sanctions. It is a lower energy price from raising global oil supply that will squeeze Putin.
Jobs (Released April 1, 2022)
The latest jobs data, with the unemployment rate sinking to 3.6%, present an incredibly tight job market. A net gain of 431,000 new jobs was added in March, bringing the total jobs recovery to 19 million since the lockdown two years ago. Another 1.5 million jobs are needed to match the prior peak observed before the ugly arrival of the pandemic. There are currently in essence two job openings for each unemployed person. That is why wages are rising by a hefty 6.8%. Workers are not better off, however, as inflation is running even higher at 7.9%.
Job gains are good, of course, but rising wages and prices are raising the prospect of potential stagflation – similar to economic conditions in the 1970s. The bond yields are touching 3-year highs in anticipation of aggressive rate hikes by the Fed. Mortgage rates consequently will also move higher. For first-time home buyers, the costs of buying the same home this year compared to just one year ago have risen by 40% from a combined impact of higher home prices and much higher mortgage rates. There will be an inevitable slowdown in home sales. Keep an eye on days-on-market and a decrease in multiple offers. Home sellers should not expect big easy profit gains.
