Solid numbers, but confidence waning in housing market

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As Beacon Hill looks to restart talks over a housing production bill, signed home and condo sale agreements in Massachusetts were each up more than 20 percent in January, compared to the same month in 2018, marking a full year of monthly increases in pending sales and providing a glimpse of where the 2019 market is heading.

The Massachusetts Association of Realtors reported Wednesday that the median price for a pending home sale in January rose 3 percent over January 2018, from just under $370,000 to $379,000. The median sale agreement for a condo last month in Massachusetts was up 4 percent, to just under $370,000.

The association's 100-point confidence indexes, based on a random sampling of the association's 24,000 members, tell a slightly different story.

The market index, at 52.1, is down almost 31 percent compared to January 2018, and the price index, at almost 61, is down 17.5 percent.

While active buyers were successful in making more accepted offers in January, association president Anne Meczywor of Roberts & Associates Realty in Lenox said industry insiders have "seen a downward shift as factors such as fluctuating interest rates, the government shutdown, and lack of homes for sale have entered the minds of buyers and sellers."

The association, working with 10K Research and Marketing Inc., assembled its pending sales numbers based on three listing services: the Berkshire County Multiple Listing Service; Cape Cod & Islands Association of Realtors Multiple Listing Service; and the MLS Property Information Network Inc.

The Legislature is back to square one on housing production legislation after failing to make progress on that in 2018 and with a new session and new bills filed for consideration in the 2019-2020 session. Lawmakers and Gov. Charlie Baker this session also plan to tackle education funding and reform, which is another area where they came up short last year and an important consideration for property buyers and sellers.

Noting home prices are rising faster in Massachusetts than in any other state and rents in metro Boston are the third highest in the country, Baker in December 2017 filed legislation that he said would lead to 135,000 new housing units by 2025. The bill died without votes in either branch.

In October 2018, 15 metropolitan Boston area communities committed to a regional housing production goal of 185,000 new units by 2030.

Tensions remain on Beacon Hill over approaches to housing construction in suburbs and cities, and levels of municipal control over housing decisions.

According to Citizens' Housing and Planning Association, its housing production legislation for the new session, filed by Rep. Kevin Honan of Boston and Sen. Joseph Boncore of Winthrop, would require cities and towns to plan at least one district where multi-family housing could be built by right, a mandate that would only apply to municipalities with land within a half-mile of MBTA stations or bus routes that are part of frequently traveled routes.

CHAPA describes local zoning as a "key barrier to production" and says Massachusetts has one of the lowest rates of housing production in the nation. For multi-family housing production, 210 Massachusetts communities have not permitted such a development in more than a decade, according to CHAPA, which says its bill sets a housing production goal of 427,000 units by 2040, with 20 percent of that new housing categorized as affordable housing.