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Market Summary Report:

Chris’s Assessment:

The Tax Credit Factor: Bottom line – the tax credit “worked”. When you look at October and November numbers, it is very clear that many buyers were draw to taking action in Chester County because of the Home Buyer Tax Credit. This is apparent when looking at several factors. First is percentage increase in sold activity over the same time last year. On average, Chester County saw an increase of 76% in the number of homes that sold. It is also apparent when you look at what the number of homes that are actively for sale. It dropped inventory levels down to below 2006 levels. If that trend can be sustained, which I have my doubts about, that will be a positive sign.

Another sign for the Tax Credit Factor is the fact that the average sold price has taken a nose dive. PLEASE DO NOT mistake this figure for average home value in Chester County. This figure is just telling us where the average SALE price is. And the fact that it has headed south so drastically in the last 3 months is because a majority of the activity has been in the First Time Home Buyer price range. In Chester County, I consider that any home under the $300,000 mark. In that case 62% of the activity in the last 3 months has been in the category. So, in the end, if congress and the lobbyists wanted to stimulate market activity with the Tax Credit, they achieved their goal.

Unfortunately, I see some negative side effects to this “Tax Credit Factor” here in Chester County. First, it has created an artificial market. What I mean by that is that you have buyers in the market that wouldn’t otherwise be there, thus creating an artificial environment that causes prices to either to be sustained or go up. I have had many clients this year that multiple offers on a home they wanted to buy. This causes them to have to buy the home at a higher price than they would have otherwise. That isn’t bad in and of itself, if the prices were going back up. But this market is artificial and not sustainable. The government cannot offer the tax incentive forever and when it ends (April 30th, 2010 for now) and if the overall economy has not turned a corner to help keep prices from going further south, those home owners may face some difficulty when they go to sell in 3 – 5 years.

Of course this is conjecture on my part, but it is a big concern. No one has a crystal ball and there is no way to tell exactly what the market will do. But, if this level of activity could be sustained, it would be a very positive sign. I don’t believe it is and when I do the first report of the new year, I believe the numbers will fall back in line with the trends from the first half of the year, with the activity continuing to slow, but prices may come back up.

My best advice: If you are a seller, as I have been saying, unless you MUST SELL, don’t put your home on the market. And if you MUST SELL, make sure you get an agent or team that is selling in this market. The longer your home sits on the market, the worse it is for the wear, and the market has dropped while you waited. If you are a qualified, ready buyer this market still remains one of the best times in history to buy a home. As I write this, the interest rate for a 30 year conventional loan is around 4.75% which is historically low. You also have a tax incentive for first time home buyers and move up buyers.

If you are going to be buying or selling a home, and want the best real estate agent(s) possible, please contact me and my team would be honored to help you with your real estate needs.

Close Sales (Demand):

• The Demand has been way up due to the Tax Credit. The highest it’s been in 5 years
• It is doubtful this trend will or could continue. I expect December numbers to follow the trend of the first half of the year, with activity at or close to a 5 year low.

Active Listings (Supply):

• Supply is now at a seasonal 4 year low. This is a good statistic.
• Over the next year, this figure could possibly inch back up, but the extension and expansion of the tax credit could help keep inventory down.

Average Sold Price:

• It is important to keep in mind that this figure is NOT home values, but sales price
• 62% of the activity from September to November has been in the First Time Home buyer price range, of under $300k
• This is what has driven the average sales price down so drastically.

If you are going to be buying or selling a home, and want the best real estate agent(s) possible, please contact me and my team would be honored to help you with your real estate needs.

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Technorati Tags: Chester County, Market Statistics, Market Update

Note to readers: I post my stats later than other real estate companies and agents because I want the most accurate numbers available…and this makes them worth waiting for! Other agents simply copy and paste graphs that they get from other sources and offer no opinions to the marketplace conditions. I track data in house and compare the market on a whole to what I produce internally in order to produce an opinion of the data and give my thoughts of what the local market is experiencing from my view as a top Chester County Real Estate Agent.

Market Statistics Graphs for October 2009

Overall Market Summary Report

Chris’s Assessment

Sellers: This is actually a fantastic time of year to sell in Chester County, despite what common knowledge may say. The reason is because you have the least amount of competition than at any other time of year and the buyers that are looking are serious buyers. The good news is that the overall supply has taken a dramatic dip in the last month. In fact, it is at the lowest level for this time of year since 2005. That’s a good sign.

Another good sign is that the demand is up to, almost, 2006 levels. This is a big jump over last year. The bad news is that the average sales price is down, and down in a big way, almost 16% from the same time last year. But, don’t let this alarm you too much. I believe that, when the full reports come out, they will show that the majority of the activity in the last month was largely first time home buyers that were looking to take advantage of the tax credit. Overall this dramatic uptick in demand and drop in supply will probably level out, unless the government passes an extension to the current tax credit. That certainly seems possible and they may even expand it to include options for those that currently own a home.

As I said last month, this all underscores the need to have a real estate expert on your side, making sure you take the RIGHT steps in this difficult market. Most likely, if you don’t HAVE to sell, then you probably shouldn’t. To find out what your home is worth today and how to get it sold quickly in this market, please contact me.

Buyers: I feel that I can confidently say that there has not been a better time to buy a home in recent history. I say this because of the fact that home prices have come down and mortgage rates are still at a historical low. If you are in a position to buy a home, you are in a position of power. It is still a “Buyers Market” and buyers have a majority of the power. That doesn’t mean that you will get a home in Chester County for 50 Cents on the dollar. That ain’t happenin’. But you can get some fantastic deals.

I will say that it is still too early to tell if the market  has “hit bottom” yet, but the fact that demand was up and supply is down is a good sign. It just depends on whether the trends continue that way or not. I highly recommend that if you are wondering if you are in a position to buy a home and maybe have a lot of questions or need help and advice that you contact me immediately. It would be my pleasure to help you.

Closed Sales (Demand)

• Starting in June, The demand has been increasing over what it was last year, and in october, it followed the same trend line as 2006.
• My best prediction is that november will also see an above average amount of closed sales due to the tax credit.

Active Listings (Supply)

• Good news as the supply has taken a dramatic decline.
• If this trend continues, it may be a sign that the overall market is improving.

Average Sold Price

This graph is effected by the first two of Supply  and Demand. When supply is lower and demand is higher, prices go up. When demand is low and supply is high, prices go down. Economics 101. Because the demand the first half of the year was low we can see that the prices were tracking well under the 2008 levels. June, July and August saw increased level of demand, therefore the prices went up. Here are some facts to note:

• The majority of activity in August, September and October has been increasingly first time home buyers.
• The heavy emphasis on First Time Home buyers (Price range usually $300k and under) is what is causing the average sale price to drop so dramatically
• This does NOT mean that your home’s value has dropped in a similar fashion

Want specific data pertaining to your neighborhood? It would be my pleasure to help you. Just contact me to get the details!

Conclusion:

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Technorati Tags: Chester County, Market Statistics, Market Update