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16 Worcester Business Journal | June 26, 2023 | wbjournal.com F O C U S MIDYEAR ECONOMIC UPDATE Late spring Real estate agents had the bottom drop out of the single-family market this year, but believe things are warming up PHOTO | CHRISTINE PETERSON TIMOTHY DOYLE WBJ Staff Writer T he first half of 2023 was a difficult one for home buy- ers and for real estate agents as single-family home sales cratered and home prices plateaued high above pre-COVID levels. In Worcester County, year-to-date single-family home sales fell by nearly 28% through April compared with the same time period in 2022. e median sale price in the first four months of 2023 in Worcester County was $400,000, down slightly from $405,000 in 2022, but up from $290,000 in 2019, according to data from Peabody-based research firm e Warren Group. e early-year decline was a continuation of a trend started in 2022. Now, real estate professionals are opti- mistic for a normalization of the market for the rest of the year. "is is a late spring market, later than normal," said Cheryl Eidinger-Taylor, president and chief operating officer with ERA Key Realty Services in Whitinsville. Eidinger-Taylor added she is seeing the beginnings of an uptick normally seen in April. Tough time for the buyers Real estate professionals told WBJ the main culprit is a lack of inventory. e dearth of homes for sale is caused by existing home- owners who are unwilling to part with their homes, which they bought or refinanced during a time of record low interest rates, people who moved away from expensive areas in the eastern part of the state, by slowing construction caused by inflation and rising interest rates, and by those who purchased homes as an investment. In 2020 and 2021 during the COVID pandemic, interest rates hit historic lows, allowing people not only to borrow money to buy homes at an approxi- mately 3% interest rate but help them refinance their homes. "e rising interest rates have less effect on buyers than on sellers," said Rick Healey, owner of Foster-Healey Real Estate in Leominster. Rising rates make potential sellers feel like they are handcuffed because not only have home prices been rising, but they would have to borrow at a higher interest rate than they are currently paying. "What we're missing is people moving from smaller homes to bigger," Healey said. Rather than move, some people are taking out home equity loans to improve or grow their existing home, said Ellen Steinfeld, executive vice president at Berkshire Bank, based in Boston. She has seen an uptick in home equity loans. New construction woes is has been a difficult time to build new houses to put on the market, said Eidinger-Taylor. Builders are facing higher interest rates themselves, and the cost of building materials and labor have played a significant role. In 2022, single-family home starts in Greater Worcester were at 1,100, the lowest level since the 867 started in 2012, according to the U.S. Census Bureau. e homes being built do not directly help people who are looking for a modestly-priced home. Builders can Rick Healey, owner of Foster-Healey Real Estate Cheryl Eidinger-Taylor, president of ERA Key Realty Services, puts a for-sale sign on the front lawn of a client's home.