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Home sale prices drop nationally in April, but what about Chester County? Comments Off

I found this article today on Bloomberg that said that home prices dropped nationally by 6.8% in April. REMEMBER – real estate is LOCAL, not national, so this report needs to be taken with that in perspective. It certainly speaks to our overall economy. Yet another factor, that I wrote about, is that activity or Pending Home Sales in April were up 6.7%. So, while prices are continuing to come down, activity is up. I believe that is a good sign overall and a HUGE sign that right now is a fantastic time to buy, especially with the interest rates continuing to be sub-6%.

So how is Chester County doing? Every month I highlight how various areas of Chester county are doing from a real estate perspective. Consider these facts from just last month:

  • Day’s On Market (DOM) dropped by 10%
  • Settled price rose 2%
  • The List to Sale ratio rose by 1%
  • The number of pending sales rose 3%
  • Number of sold homes rose a whopping 10%

Here are some of the “Reality” Checks (all comparing to May 2008):

  • Days on Market are up 21%
  • Settled price was down 12%
  • Pending homes were down 16%
  • Sold homes were down 14%

Look for my June statistics coming up in just a week and a half. Below is the article from Bloomberg

U.S. Home Prices Drop 6.8 Percent in April as Foreclosures Rise

By Brian Louis and Kathleen M. Howley

June 23 (Bloomberg) — U.S. home prices fell 6.8 percent in April from a year earlier as rising unemployment and record foreclosures kept buyers out of the market.

Measured monthly, the average price fell 0.1 percent from March, the Federal Housing Finance Agency in Washington said today. The number was projected to drop 0.4 percent in April, according to the median forecast of 15 economists in a Bloomberg survey.

The housing slump has reduced the median price of an existing home 26 percent from the July 2006 peak, pushing affordability to near record levels. Prospective buyers are now being constrained by rising mortgage rates, the highest unemployment since 1983 and concern the housing rebound will be anemic.

Read more. . .

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Posted on: 06-25-2009
Posted in: General real estate statistics

What is a “Short Sale” & should I purchase one? Comments Off

The following was taken from an article written by Sanford Nax of the Fresno Bee in California. It gives some great information about short sales and want to share it with you. I have a few comments following the article.

“The number of troubled homeowners able to sell their houses for less than their debt on the property is increasing. It’s called short selling and comes as lenders, overwhelmed with foreclosures, are more willing to make deals, and as real estate agents become more skilled in navigating the complicated transactions.

A short sale is often treated as an option to avoid foreclosure. A homeowner can no longer afford the mortgage for whatever reason-perhaps the interest reset because it was one of many variable-interest mortgages approved by lenders-so he or she decides to negotiate with the bank to sell the property before foreclosure occurs.

The seller accepts an offer subject to bank approval and requests a short-sale package from the lender. That package consists of paperwork required from the seller that points to financial hardship. If accepted, the bank writes off the loss-assuming the homeowner owes more than what the house sells for-at the close of escrow as a cost of doing business. This process can be difficult, time-consuming and frustrating. By some estimates, fewer than 10% of all short-sale attempts succeed, although Realtors expect that percentage to increase.

A typical short sale often includes real estate agents representing buyer and seller, a negotiator who decides the price and a third agent who presents an independent value.

And because banks are often under-staffed and overworked, paperwork is sometimes lost or directed to the wrong person. “In the two I’m working, the bank lost the offers twice,” Neufeld said. “Then they have to input it into the system and that can take three to four weeks. Then they have to appoint a negotiator,” which may not happen for a month into the process.

Buyers often get frustrated and buy another property simply because of the time it takes just to get approval for the sale form a bank.

That said, more lenders are willing to consider short sales to avoid any more losses. “Banks are finally getting religion and maybe catching onto the program,” Neufeld said.

In many cases a short sale may be the best solution. The seller lessens the damage to his or her credit and banks don’t have to carry an asset that is continuing to lose value.”Short sales present some really fantastic opportunities for home buyers. The banks don’t want to have another foreclosure on their hands, and the sellers aren’t going to make money in selling, so they don’t usually care what they sell it for. But, the buyers need to be fully aware what they are getting themselves into and what could potentially happen.They also need to make sure they have a Real Estate Agent that is experienced and skilled in short sales. If they are not, it could prove very bad for the buyers and the agent. If you are considering buying a short sale, make sure you are aware of the costs involved and the time frames that need to be set. It is not a quick process, usually.

As for short sales in the Chester County, Downingtown, Exton, West Chester area – there are opportunities out there. Contact me to get my “Top 10 steals in Chester County” list or to set up a custom search for you.

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Posted on: 06-21-2009
Posted in: Buyers, General real estate statistics

The Geography of Jobs Comments Off

I saw this article referenced on Twitter and thought it provides some interesting points. Even more interesting was this map showing job loss or growth. I like to focus on positive things, but sometimes it is important to deal with reality. As you can see,  the job market and economy in the Mid-atlantic region has been positive, up until recently. But, even still, Chester County has faired very well compared to the national statistics. I will try and do some research on the latest numbers in this area, and if they exist, I will get them to you.

The article is below the map.

Connecting Joblessness to Houselessness

By Brian Summerfield, Online Editor, REALTOR® Magazine

Although it isn’t difficult to establish a connection between rising unemployment and the crisis in the housing market, I haven’t come across many things that demonstrate this relationship more starkly than a multimedia map developed by TIP Strategies Inc., an economic development consultancy.

Without even really trying, this map demonstrates the alignment between the precipitous loss of jobs in the United States, and the collapse of housing prices and spike in foreclosures in certain areas.

Starting in 2004 and continuing until late 2006, “bubbles” representing metro job markets throughout the country expand everywhere (with the notable exception of post-Katrina New Orleans in late 2005). The most rapid growth in net job gains is seen in Southern California, Las Vegas, South Florida, southern Arizona, and the New York-D.C. corridor.

These also happen to be the areas that experienced the most extreme increases in real estate values during that time. And it’s these same regions that shrink to microdots throughout the first half of 2008, only to re-explode into large red circles later that year in dramatic fashion, signifying the meltdown in the job markets that more or less coincided with the downturns in housing in these respective places.

Now, some have predicted a housing recovery is nigh, and they may well be right. But the unemployment rate in California was at 11 percent in April, according to the Bureau of Labor Statistics. And it was at 9.6 percent in Florida, 10.6 percent in Nevada, 9.9 percent in Washington D.C., and nearly 8 percent in Arizona. Furthermore, the job markets in these areas probably won’t see any major reversals before the end of this year.

Two related questions come to mind: Are employment and housing as inextricable as this map suggests? Is it possible to have a recovery in one and not the other?

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Posted on: 06-11-2009
Posted in: General real estate statistics, Market Update

Chester County Market Statistics update for May 2009 Comments Off

The numbers and statistics for the Real Estate market in Chester county in May has some promising numbers and good news, and then some “reality” checks. I say reality checks because I don’t look at it as “bad news”, but for those that need to sell in the Chester County area or are currently selling, they NEED to pay attention to these numbers and realize that they cannot be unrealistic when setting the pricing strategy for their home. They must listen to their real estate professional.

Here are some of the good points (All over April 2009):

  • Day’s On Market (DOM) dropped by 10%
  • Settled price rose 2%
  • The List to Sale ratio rose by 1%
  • The number of pending sales rose 3%
  • Number of sold homes rose a whopping 10%

Here are some of the “Reality” Checks (all comparing to May 2008):

  • Days on Market are up 21%
  • Settled price was down 12%
  • Pending homes were down 16%
  • Sold homes were down 14%


May 2009 April 2009 % Ch May 2008 % Ch
Avg DOM 94 104 -10% 78 21%
Orig. List $ $473,370 $451,615 +5% $439,729 +8%
Sold List $ $344,553 $341,711 +1% $385,696 -11%
Avg Settled $ $319,967 $313,482 2% $361,944 -12%
List To Sale Ratio 92.8% 91.7% 1% 93.8% -1%
# Pending 428 416 +3% 508 -16%
# Sold 345 314 10% 453 -14%
Total LIsted 937 986 -5% 1102 -15%

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Posted on: 06-5-2009
Posted in: General real estate statistics, Market Update, Monthly Update

“Pending home sales rise 6.7 percent in April” 1

This is good news, but as the article states, we are not out of the woods yet. I know that for real estate in  Chester County, when looking at May 2009 vs May 2008, the average home sale price is off about $12% and the number of pendings is down 16% with number of solds is down 14% (according to TrendMLS).  I will be posting those numbers in the next day or so, so make sure you come back!

Here is an excerpt of the article:

“By ALAN ZIBEL

WASHINGTON (AP) — The number of U.S. homebuyers who agreed to buy a previously occupied home took the largest monthly jump in nearly eight years in April, but there are still plenty of danger signs for the U.S. housing market.

Home sales appear likely to head upward this summer, potentially to levels not seen since the stock market collapsed last autumn, but prices are expected to keep falling well into next year. Layoffs, which are causing foreclosures to soar, coupled with rising mortgage rates could dampen any real estate recovery.

The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in April surged 6.7 percent to 90.3, far exceeding analysts’ forecasts. It was the biggest monthly jump since October 2001, when pending sales rose 9.2 percent.

The big boost likely reflects the impact of a new $8,000 tax credit for first-time homebuyers that was included in the economic stimulus bill signed by Obama in February. Since buyers need to complete their purchases by Nov. 30 to claim the credit, “we expect greater activity in the months ahead,” Lawrence Yun, the Realtors’ chief economist, said in a statement.

Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future existing home sales.

While economists are encouraged by signs that demand for housing is returning, the outlook is far from sunny. Mortgage rates are rising, making homes less affordable for many borrowers. The average rate for a 30-year, fixed-rate mortgage is around 5.3 percent this week compared with about 5 percent last week, according to Bankrate.com. “

Read the entire article on Pending Home Sales

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Posted on: 06-4-2009
Posted in: General real estate statistics, Market Update

First Quarter Market Statistics by Zip Code Comments Off

Download First Quarter 2009 Chester County Real Estate Market Statistics

Again, I love stats and numbers. This sheet illustrates just HOW local real estate really is. Each zip code in this report is uniquely different than the one before it.

Here are some interesting stats from the report:

  • Biggest drop in sales price: Cochranville, 19330 – 50%
  • Biggest rise in sales price: Glenmore, 19343 – 24%
  • Most sold in quarter: Coatesville at 89 homes
  • Least Sold in quarter: Tie – Newtown square and Wagontown at 1
  • Most days on market: Honey brook at 166
  • Least Days on market: Wagontown at 26

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Posted on: 05-28-2009
Posted in: General real estate statistics, Market Update, Quarterly Market Update

Absorption Rate of Real Estate in Chester County 1

Here is a quick look at the price ranges, by increments of $50,000, and how many months of inventory exists for each one. While looking at this, please keep in mind that the rule of thumb in real estate is that when you have 6 months or less worth of inventory, you have a “Centrist” market, meaning the market is balanced. Anything less is a Sellers market, anything more is a Buyers.

When examining this chart, it becomes clear that homes that are selling for under $251,000 are actually in a slight Buyers market. Even homes under $350,000 are in more of a “Centrist” market. The reason for this is that a majority of homes under $300,000 are bought by first time home buyers. At the moment, a majority of the buyers in the market fit that category, not to mention the crazy low interest rates and the $8000 tax credit.

This is the type of information buyers need to understand that they cannot throw an offer at a seller that is more than 10% or more off the asking with out offending them and getting laughed at. Yes – there are rare circumstances where a home is listed way to high. But, when that is the case, it usually tells you that the seller is not willing to deal with reality, or their Realtor is doing them a huge disservice.

For any home over the $300,000 mark, this means if you don’t have to sell, then don’t. But if you do remember, it is a price war and a beauty contest. Meaning your home has to show extremely well, and your price needs to be aggressive, and a good Realtor will help you know exactly what that is.

What do you think?



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Posted on: 05-23-2009
Posted in: General real estate statistics, Market Update
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