The Recorder - My Turn: ‘No conclusive evidence that proves the pandemic’s impact on home sales’

Realtors need to be careful when interpreting sales data, and policy makers shouldn’t be looking to special interests to inform policy.To...

Realtors need to be careful when interpreting sales data, and policy makers shouldn’t be looking to special interests to inform policy.To claim that there is a mass migration due to the current pandemic would be perpetuating a fallacy. A recent advertisement in the form of an article published in Dec. 16 edition of The Recorder tied an increase in sales in rural communities to the COVID-19 pandemic. However, with all due respect, correlation isn’t causation. There are several more likely reasons for the increase.

The advertisement was authored by a real estate broker who also sits on the board of directors of the Massachusetts Association of Realtors (MAR) and as a commissioner of the Massachusetts Rural Policy Advisory Commission, a state government body. MAR is a chapter of the National Association of Realtors, the second largest lobbying spender in the nation, according to the Center for Responsive Politics.The report referenced in the ad was for the advisory commission.

The criteria used for the report referenced in the ad was limited to single-family homes sold between June 1 and Dec. 1, 2020 in every Franklin County town, except Greenfield. The same criteria was used for 2019. There were 331 and 272 single-family homes sale in 2020 and 2019, respectively. Indeed, that is quite an increase. But is it really because of a mass migration from urban to rural areas? Not likely.

A more comprehensive look at Franklin County sales data for the same communities shouldn’t convict anyone that is the case. There were also less single-family homes sold in the rural towns of Franklin County between March 1 and May 31, 2020 when compared to the same period for every previous year since 2016. So it is more likely that the increase in sales in the latter part of the year was due to a combination of record-low mortgage rates and pent-up demand. There has also been an ever-increasing shortage of available homes for sale in urban areas like Boston in recent years, which has been driving up prices beyond the reach of too many home shoppers, thereby driving more home shoppers to more affordable rural areas.

There is also ample evidence of a pre-existing upward trend in home sales in the rural communities of Franklin County, regardless of the pandemic.As of Dec. 17, there has been 475 single-family homes sold in those communities so far this year. In 2019, there were 477 such homes sold. Single-family home sales in rural Franklin County have been trending upward since the financial crisis of 2008, when there were just 305 single-family homes sold. Between 2008 and 2014, single family homes sales ranged between a low of 305 and 395 units. Single-family home sales have risen further since 2015, ranging between 429 and 494 units, the latter of which we saw in 2017. It remains to be seen if the rural communities of Franklin County reach 494 sold units in 2020.

We saw an upward trend for single-family home sales in the years prior to the financial crisis, as well. Between 1993 and 1997, single-family home sales ranged between 331 units and 378 units. Such home sales reached 428 units in 1998, and rose to 529 units in 2004, before single-family home sales dipped to 390 units in 2007.

There is ample reason to dispute the notion that the increase in single-family homes sales in the rural communities of Franklin County are due a migration from the cities as a result of COVID-19. General trends, low inventory, rising prices, low interest rates, and pent-up demand are all contributing factors toward the increase in sales. Nevertheless, many real estate professionals are perpetuating the false reality of a sudden mass migration from urban areas, as was stated in The Recorder ad.

There is no conclusive evidence that proves the pandemic’s impact on home sales. More qualified people with the appropriate expertise should be advising policy, after rigorous analysis of the available data. Given the strong headwinds too many Americans face pursuing homeownership, Realtors should stay out of the government policy business altogether and stick to sales.

Michael Seward, CBR, CNHS, CRS, GREEN, LMC, is the broker/owner of Michael Seward Real Estate in Shelburne.

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Newsrust: The Recorder - My Turn: ‘No conclusive evidence that proves the pandemic’s impact on home sales’
The Recorder - My Turn: ‘No conclusive evidence that proves the pandemic’s impact on home sales’
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