The Springfield real estate market performed well in 2016. Although below the national average, home prices and appreciation rates continued to get stronger during the first-half of the year. Home prices rose above $200,000, while appreciation rates for Springfield real estate continued to improve, experiencing small but significant gains. Furthermore, gains in the last three years have extended the trend of positive price growth since the recession.
Market factors influencing the Springfield real estate market in 2016 included home affordability, new housing construction and the local economy. While home affordability remains among the lowest in the country, Springfield real estate was impacted by a combination of lagging new housing construction and the local economy. Job growth and unemployment fared worse than the national average, while construction for new housing continued to struggle throughout the year. Despite the hiccups, the Springfield real estate market is expected to improve moving forward.
Springfield, MA Real Estate Market Statistics:
Home appreciation, although improving, continued to falter in 2016. One-year and three-year appreciation rates for Springfield real estate reached 2.1 percent and 3.0 percent during the first-half of the year, compared to the national average of 4.9 percent and 17.8 percent. Despite lower gains, home appreciation remained on an upward climb during the first six-months of the year. For those considering Springfield real estate investments, the following highlights appreciation gains from previous years:
- Homes purchased in the Springfield, MA housing market one year ago have appreciated, on average, by $7,360. The national average was $14,963 over the same period.
- Homes purchased in the Springfield, MA housing market three years ago have appreciated, on average, by $7,360. The national average was $46,878 over the same period.
- Homes purchased in the Springfield, MA housing market five years ago have appreciated, on average, by $33,104. The national average was $82,353 over the same period.
- Homes purchased in the Springfield, MA housing market seven years ago have appreciated, on average, by $32,823. The national average was $77,054 over the same period.
- Homes purchased in the Springfield, MA housing market nine years ago have appreciated, on average, by $11,876. The national average was $31,126 over the same period.
Along with appreciation, home equity was mild for the Springfield real estate market in 2016. Despite price appreciation and principle payments in the last three years have boosted total equity growth since the recession, which bodes well for Springfield real estate investing, equity gains in the first-half of the year fell short of the national average. Moreover, equity gains for Springfield real estate have fallen short of the national average in the last nine years. Homes purchased in year five experienced their largest gain, with homes appreciating by $33,104.
Foreclosures are another component to consider, especially for Springfield real estate investors. According to RealtyTrac, there were 887 properties in some stage of foreclosure during the month of December. This is 41 percent higher than the previous month and 46 percent higher than the same period last year. Bank owned real estate also increased during the first-half of the year. REO properties in Springfield increased 22.6 percent from the previous month, while skyrocketing 192.3 percent from the same period last year. This bodes well for investors, as investment opportunities are on the rise in Springfield.
Springfield, MA Real Estate Market Summary:
- Current Median Home Price: $201,600
- 1-Year Appreciation Rate: 2.1%
- 3-Year Appreciation Rate: 3.0%
- Unemployment Rate: 5.4%
- 1-Year Job Growth Rate: -0.1%
- Population: 153,703
- Median Household Income: $34,731
Springfield, MA Real Estate Market (2016) — Q2 Updates:
The Springfield real estate market continued to achieve positive ground in 2016. The median home price for Springfield real estate was $201,600 during the second quarter, while one-year and three-year appreciation reached 2.1 percent and 3.0 percent. For homeowners and investors, gains in the last three years have extended the trend of positive price growth after the recession.
One factor contributing to Springfield’s growth is home affordability. Homeowners paid 9.4 percent of their income to mortgage payments during the second quarter, whereas the national average paid 17.8 percent. That said, affordability in the Springfield housing market is among the lowest in the country. Conversely, new housing construction is among the worse. The level of construction in the second quarter was 90.2 percent below the long-term average, while single-family housing permits declined -78.5 percent. In comparison, the national average experienced an increased in single-family housing permits by 10.6 percent in the second quarter.
Another negative factor impacting the Springfield real estate market was the local economy. The first-half of the year saw declines in job growth, as employment in Springfield fell to -0.1 percent during the second quarter, compared to 1.9 percent by the national average. On the flip side, unemployment in the area improved during the same period. Springfield’s unemployment rate was 5.4 percent in the second quarter, down from 6.2 percent in the same period last year. Although still higher than the national average, the improvement is a sign of recovery, which bodes well for investment purposes.
Lastly, the number of foreclosures in the Springfield is something investors should take note of. The second quarter saw foreclosures increased by 41 percent from the previous month, and 46 percent from the same period last year. Bank owned real estate also fared well, as REO properties grew by 22.6 percent compared to the previous month, and 192.3 percent from the same period last year.
The Springfield real estate market is forecasted to see weaker price growth in the next 12 months than the rest of the U.S., according to the National Association of Realtors (NAR). Home prices for Springfield real estate are predicted to grow by 3.3 percent, compared to the national average of 3.6 percent. Although improvements still need to be made, the Springfield real estate market is shaping up to be one of the more interesting housing markets in 2016.
