DON’T LET THE SEASON SCARE YOU!
Halloween is right around the corner and while many kids and those who are kids at heart are preparing for the spooky observance, the market continues to indicate very solid and stable numbers. Everything is cooling down as seasonally expected and the numbers tell a good story. Let’s look at the details.
DEMAND: Demand is mirroring last years numbers and while demand was down in September from the previous month, it’s still a good deal above the 5 year trend. The 5 year trend is reflective of a depressed market, so as long as we stay 10-20% above that line, then we are “healthy territory”.
SUPPLY AND INVENTORY ACCUMULATION: Starting in May, the inventory has stayed above the levels of the same time the year before. This number/fact in and of itself is not of any concern at all, however what would be is if there begins to be a gap between last year and this years number in favor of more homes on the market. The overall level in September was around 6.6 months. This is considered a balanced market. That number could even float up just a bit but anything over 8 months would be concerning as it might mean the market is cooling too much.
SOLD TO LIST RATIO: Last month the average was around 94.5% for this ration, meaning the average home seller in Chester County received 94.5% of asking price. This number also is a good steady number and as our team is observing many multiple offer situations, that number should stay pretty steady. If this drops to 93% or less, then it could also indicate a cooling market.
RATES: Not much to report on rates. They continue to be sub 4% for FHA and around 4.25% for conventional 30 year loans. The feeling we get from the buying consumer is that a slight rise would be tolerable but if it hit 5% that would negatively effect the psychology of the buyer and put a damper on many folks. As it is, these rates are still encouraging many folks to make a move even though they aren’t 100% ready.
CONCLUSION: The numbers remain solid and steady. This time of year the inventory level starts to drop like a dam letting out water for cleaning. We won’t see inventory rise again until about March. This doesn’t mean it’s a “bad” time to buy or sell a home. What it means for buyers is that there won’t be as much to choose from and that sellers are serious about selling and may accept a bit less than what they would otherwise accept. For sellers it means there is less competition.