THE TRAIN AIN’T SLOWIN’ DOWN…
The market activity remains strong and healthy with no apparent indicators of any weaknesses other than buyers not having enough to choose from. We certainly saw a slow down in August, but September is already picking up steam. Let’s look at the details…..
DEMAND: August finally caught a breather as far as the pace of activity went. Typically the drop of activity happens between June and July and it waited this year until August. It’s unclear what that may mean for the overall market, but it’s our suspicion that it’s because there wasn’t much to choose from for buyers and it delayed the activity. Overall the demand continues at a health level and is not dropping off and is on pace to match last years DEMAND.
SUPPLY AND INVENTORY ACCUMULATION: The big story earlier this year was the lack of inventory but over the last few months the level of inventory has risen to more healthier and even levels. In June the level hit the 6 month mark which is a balanced market – meaning it’s neither a Buyer’s or Sellers market but in-between. The caveat of that is that depending on the area and price, there are still very strong sellers markets happening, mainly in West Chester, Downingtown and Great Valley areas between the price of $250 and $500k.
The next Quarter will be very indicative of where the market next year is going to go. If we see the same drastic dip in inventory we saw in Q4 last year, then we could be in for another year where there isn’t much to choose from. It’s our opinion that this isn’t likely to happen as prices have come up enough that more and more folks that held off selling are going to see that they can get what they want and make the decision to move.
SOLD TO LIST RATIO: After spending a few months at a recent high of close to 97%, this number dropped back down to match the same numbers as last year, roughly around 95%. What the higher ratio represents is that prices are headed up. As long as the ratio can stay above 94%, then the market is likely to continue in stability or, even better, appreciation. Right now, it’s in a very healthy place.
RATES: Rates have dipped again to around 4.125% for 30 conventional and for FHA around 3.875%. This is not where we thought rates would be at this point. We thought for sure they’d be much closer to 5%. This is very good news for everyone in the market. Buyers will continue to be encouraged to pursue home ownership and sellers will like the amount of interest there is in the market. My advice is always the same on this – if the rates are favorable, they seem they can only go one way, which is up.
CONCLUSION: Overall we are in a very healthy place. In great indicator of this is that for the first half of the year, (Jan – July) the activity in the price range of $1m to $2m is up about 28.5% over the same time last year. That’s a VERY good sign. Typically it’s this price range that really is a front runner in what’s coming next. If this is any indication, then we should see a healthy and continued active market in 2015. It’s still an amazing time to buy and the big question for buyers is – does “your” house exists? Can you find it? And for sellers there is almost no down side as long as you are priced right.
If you are considering buying, please call us to set up a buyers consultation so we can let you know how easy it will be to find your dream home. If you are looking to sell, let us know and we can help you discover if the amount you can get for your home is what you need to take the next step. You can reach us at 484-713-2413