Source: State House News Service
Author: Colin A. Young

Sellers Fetching High Prices Despite Surging Borrowing Costs

Mortgage interest rates are almost double what they were a year ago, but the prices of single-family homes and condominiums in Massachusetts continued to set new records and erode paths to homeownership in July, real estate market analysts said.

The Warren Group’s report on July sales activity showed that sales of both single-family homes and condominiums declined year-over-year last month, down more than 23 percent and more than 14 percent, respectively. But with intense competition for the relatively scarce inventory of homes and condos for sale, median sale prices reached new all-time highs for July last month.

“Demand is obviously still strong among prospective buyers, but inventory can’t keep up,” Cassidy Norton, associate publisher and media relations director at the real estate data firm The Warren Group, said.

There were 4,085 single-family homes sold in Massachusetts in July, down 23.1 percent from July 2022’s 5,314 transactions. The median sale price of a single-family home climbed 4.3 percent from last July to the new monthly record high of $610,000, The Warren Group said.

Through the first seven months of 2023, there have been 22,657 single-family home sales across Massachusetts, a drop of 24.6 percent compared to the first seven months of 2022. And the year-to-date median sale price of a single-family home has increased 2.3 percent compared to the same period in 2022 to $565,000, The Warren Group said.

As of Monday, the average interest rate on a 30-year fixed-rate mortgage was 7.247 percent APR, according to Zillow data compiled by NerdWallet. A year ago, the average interest rate was 5.267 percent, NerdWallet said.

Theresa Hatton, CEO of the Massachusetts Association of Realtors (MAR), said summers generally bring “a hot real estate market,” but that the state’s chronic lack of inventory is holding the Bay State market back from achieving year-over-year growth.

“With the competitive buying market, we are seeing, many potential sellers are refraining from listing their homes due to the attractive existing mortgage rates they have combined with the stress of entering the buyers’ market after their current home sells,” Hatton said in a statement.

MAR said that new listings in July decreased by 26.7 percent for single-family homes and by 17.6 percent for condominiums, year-over-year. Year-to-date, new listings compared to 2022 are down 25.1 percent for single-family houses and down 20.6 percent for condos, MAR said.

The competitive market and scarcity of homes for sale has been a boon to sellers. MAR said the single-family homes that sold in July went for an average of 102.9 percent of their original list price.

Condo sales activity and prices largely mirrored the single-family home market in July, The Warren Group said. The month’s 1,886 condominium sales marked a 14.3 percent decrease from the 2,201 condo sales in July 2022, but the median sale price increased 6.5 percent year-over-year to a new all-time July high of $555,000. So far in 2023 there have been 11,270 condo sales in Massachusetts, a 22.2 percent decrease compared to the first seven months of 2022, and the median sale price has climbed 4 percent to $519,900.

“Historically, condos have been a more affordable alternative to single-family homes, but with the median price hovering above $500,000 for the last three months, prospective buyers will be hard-pressed to find an easy route to homeownership,” Norton said.

The unaffordability of housing in Massachusetts accelerated as the pandemic hit in 2020 and has led to housing insecurity for many Bay Staters at the same time that the state is seeing a hard-to-manage surge of immigrant families coming to Massachusetts in search of shelter and work.

When Gov. Maura Healey rang alarm bells about the shrinking capacity of the state’s emergency shelter system and declared an emergency, she said that one of the reasons that “we find ourselves in this situation” is the state’s “long-standing shortage of affordable housing.”

The high cost of living in Massachusetts also puts a damper on the state’s efforts to compete against lower-cost spots like Florida, Texas and North Carolina for increasingly mobile residents and workers. Healey took office in January promising to tackle the “barriers that are holding back our people and our state,” like the “out of control” cost of housing.

This weekend marks the return of the annual Sales Tax Holiday here in Massachusetts. On Saturday, August 12 and Sunday, August 13, most retail items of up to $2,500, purchased in Massachusetts for personal use, will be exempt from sales tax. However, purchases by corporations or other businesses along with purchases by individuals for business use are not exempt.

While the bulk of retail items qualify for the exemption, there are some items that are still taxable and do not qualify for the exemption this weekend including: alcoholic beverages, electricity, gas, marijuana or marijuana products, motor vehicles and motorboats, telecommunications services, tobacco products, and any single item whose price tag is more than $2,500.

With the rise in internet commerce, an item will qualify for the sales tax holiday exemption if you order and pay for an eligible item over the internet on the sales tax holiday during Eastern Daylight Time.

For retailers, you must take part in this weekend’s sales tax holiday if your business normally makes taxable sales of tangible property in Massachusetts or to purchasers in Massachusetts and is open for business on August 12 and 13. If a purchaser needs to return or exchange an item once the sales tax has ended, they will not be subject to the tax retroactively.  Any sales or use tax erroneously collected on the sales tax holiday weekend must be remitted to DOR. If a customer seeks a refund of tax collected in error from you, you must refund the tax to the customer. If you have already remitted the tax to DOR, you may file an amended return to recover amounts refunded to customers. To report exempt sales, on your August Sales and Use Tax Return, you will report the amount of tax not charged on items during the Sales Tax Holiday as “Exempt Sales” [Line 2].

As mentioned, the sales tax holiday exemption is limited to eligible sales of items costing $2,500 or less. If you spend more than $2,500 on an item, the entire amount paid for the item is subject to sales tax, not just the amount that exceeds that threshold. For those planning to purchase multiple items at the same time, if the price of each individual item is $2,500 or less, you can combine as many items as you want, tax-free, even if the combined items cost more than $2,500.

For complete information on the sales tax holiday head to: Mass.Gov Sales Tax Holiday Page.

 

Three staff members of the North Central Massachusetts Chamber of Commerce were recently recognized for their years of service by the Massachusetts Association of Chamber Executives (MACCE). Diane Burnette, manager of the Johnny Appleseed Visitors Center, and Roy Nascimento, president and CEO were both recognized for twenty-five years of service within the chamber of commerce industry. Kat Deal, programs and events manager, was recognized for five years of service.

The 2023 Service Awards were awarded during the MACCE Annual Meeting held on April 13, 2023 in Northampton, Mass. MACCE Service Awards recognize and promote chamber professionals in Massachusetts who have achieved significant years of service in the chamber industry.

Deal joined the North Central Massachusetts Chamber of Commerce in 2018 and is responsible for planning and executing the many events and programs of the Chamber and its affiliate organizations.

Nascimento started his chamber career in 1998 at the Metro South Chamber of Commerce, before leading the Attleboro and New Bedford Chambers. He was selected to lead the North Central Massachusetts Chamber of Commerce in 2015.

A lifelong resident of Fitchburg, Burnette began her career with the North Central Massachusetts Chamber of Commerce in 1998 as an administrative assistant and was promoted to manager of the Johnny Appleseed Visitors’ Center in 2008. She is responsible for managing the day-to-day operations and overseeing staff at the visitor center on Route 2 in Lancaster, Mass.

“Diane, Kat and Roy are important contributors to the success of the Chamber,” said Jim Vander Hooven, president of Mount Wachusett Community College and Chair of the board of directors for the North Central Massachusetts Chamber of Commerce. “This recognition is well-deserved and a testament to their professionalism and dedication to our members and communities in North Central Massachusetts.”

The North Central Massachusetts Chamber of Commerce was named a finalist for the prestigious 2023 Chamber of the Year award, presented by the Association of Chamber of Commerce Executives (ACCE).

The North Central Massachusetts Chamber of Commerce is one of three finalists in its category, which also includes the Richland Area Chamber & Economic Development in Mansfield, Ohio, and the Winter Park Chamber of Commerce in Winter Park, Florida.

The award, sponsored by Personify, is the most prestigious and competitive recognition presented annually by ACCE. Based in Alexandria, Virginia, ACCE has more than 1,600 chambers of commerce, and related business and economic development organizations, as members, representing more than 9,000 professionals in the industry.

The Chamber of the Year award recognizes the leadership role chambers have in their communities. Those honored with the Chamber of the Year designation have demonstrated organizational strength and made an impact on key community priorities, such as education, transportation, economic prosperity and quality of life.

“This year’s finalists truly represent excellence in the chamber industry,” said ACCE President & CEO Sheree Anne Kelly. “Through their roles as community partners, thought leaders and innovative problem solvers, each has demonstrated what it means to be a catalyst for growth and regional prosperity. We congratulate them on this achievement.”

“This recognition as one of the top chambers in the country is a collective achievement and a tribute to the innovation and passion of our members and the many business leaders who support our mission to build a stronger economy and quality of life in our communities here in North Central Massachusetts,” said Roy M. Nascimento, president & CEO, North Central Massachusetts Chamber of Commerce. “I want to thank our staff, board leaders and all of our members for their support and commitment to the important work we do to advance the region.”

Chambers of commerce interested in vying for the award first must qualify by participating in a vigorous multi-stage process, which includes submitting a written application addressing all aspects of the organization’s operations and programmatic work. Eligibility for Chamber of the Year also includes meeting minimum thresholds around membership performance and financial management, including meeting key performance criteria on the ACCE Annual Operations Survey. Applications are scored by peer chamber executives to determine finalists. Winners are selected from among finalists based on an interview before a panel of experienced chamber professionals. To ensure the fairest competition, applicants are grouped into four categories based on annual revenue, membership, area population and other factors.

The winner of 2023 Chamber of the Year will be made on Tuesday, August 1.

James L. Vander Hooven, Ed.D., President, Mount Wachusett Community College has been elected Chair of the Chamber’s Board of Directors for 2023-2024. The announcement was made at the chamber’s Annual Meeting on June 15, 2023.

Dr. Vander Hooven was named president of Mount Wachusett Community College in 2017. Headquartered in Gardner, Mount Wachusett Community College is a public, two-year college that was founded in 1963 to serve the people of North Central Massachusetts. The college is accredited by the New England Commission of Higher Education (NECHE) and offers 70+ credit-bearing degree and certificate programs, non-credit, personal enrichment classes for lifelong learners, and workforce development that includes custom, on-site training.

Dr. Vander Hooven earned his Bachelor of Arts degree in English from The Ohio State University and his Master of Arts degree in American Studies from the University of Wyoming. In 2009, he was awarded his Doctorate in Higher Education Leadership from the University of Maine, where he focused on student access.

In addition to his involvement with the chamber, Dr. Vander Hooven also serves on a number of boards and charitable organizations, including the Boys and Girls Club of Fitchburg/Leominster, United Way of North Central Massachusetts, Wachusett Business Incubator and the GFA Federal Credit Union Supervisory Committee.

He succeeds Christopher McCarthy, president of Fidelity Bank who now moves to the position of Immediate Past Chair of the Board of Directors.

“I am incredibly honored to have been elected Chair of this dynamic and respected organization that plays such a leadership role in advancing North Central Massachusetts,” expressed Dr. Vander Hooven, “I am excited to continue Chris McCarthy’s efforts and look forward to working alongside an incredible Board and staff to make sure the Chamber remains a strong resource for our business community.”

Vander Hooven was first elected to the Chamber’s Board of Directors in 2018 and has held several leadership positions including Vice Chair, Treasurer and has served on the Chamber’s Leadership Council, the One North Central leadership committee and the executive committee. As the Chair of the Chamber’s Board of Directors, Dr. Vander Hooven will work with the Board, Chamber staff, and membership to champion the Chamber in its mission to serve the region’s business community.

“Jim has served as an important member of the Chamber’s Board of Directors and Executive Committee for several years and is a valued leader in the community,” noted Roy Nascimento, Chamber president & CEO. “We are fortunate to have his respected leadership as we continue to advance the interests of our members and work together to promote North Central Massachusetts.”

In the same election, Barbara Mahoney, president & CEO of Leominster Credit Union was elected Vice-Chair and Dr. Richard Lapidus, president of Fitchburg State University was elected to the position of Treasurer. Board members elected for new terms were Nick Haritos, president & CEO of AIS, Inc. in Leominster; John Heroux, president of Micro Machine & Electronics in Leominster; and Nicole Moorshead, general manager of the Chocksett Inn in Sterling and the Colonial Hotel in Gardner.

Continuing current terms on the Board of Directors are Allie Catlin, co-owner of Smith’s Country Cheese in Winchendon; Jackie Cullen, co-owner of River Styx Brewing in Fitchburg; Tony Fields, president and owner of Cleartech Group in Leominster; Matthew Fournier, president of Elite Construction & Design in Fitchburg; Melissa Glenny, president of Franklin Professional Associates in Leominster; Michael Johansen, president & CEO of Bemis Associates in Shirley; Rachel Lopez, president & CEO of Resource Management, Inc in Fitchburg; Lori Richardson, president of Aging Services of North Central Massachusetts in Leominster; and Rodrigo Souza, owner of Comeketo Brazilian Steakhouse in Leominster.