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The Chris & Caleb Team Assessment: “Rollercoaster!! Oooh, ooh, ooh!”

In July we saw the closed sales catch up with the sorrowful stats for pending sales. It is very safe to say that we are going through a “Cleansing” of sorts. So while the supply is not dropping, the number of ready, willing and able buyers certainly were “flushed out” by the tax credit. Let’s take a closer look…

PENDINGS:

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Pendings indicate future closed sales and as such, we can expect the number of future closed sales to take, yet another, hit in the next coming months as a result of August’s pending numbers. While it looks bad, you must keep in mind that pending sales traditionally take a dip in August. It is the height of vacation season and everyone is getting ready for school, so buying a home is not the first thing on everyone’s mind. Next month, if we follow trends, we will see the pending number inch back up.  Conclusion – looks like the market is still in a stall.

CLOSED SALES (DEMAND):

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The closed sales (AKA Demand) is mirroring, very closely, the line for Pending Sales. If this continues, we can very safely say that closed sales, beyond October will be very dismal, as the current trend for this year is off by more than 30%. If you are thinking of selling your home, do it now, before the end of October.

ACTIVE LISTINGS (SUPPLY):

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It looks like the Supply of homes for sale in Chester county is at about the same level as last month. As you can see, this follows the 5 year trend, which is indicated by the Red line. We believe, based on 30% less sales, that inventory will certainly stay at unusually elevated ranges through the remainder of the year, into next year.

AVERAGE SOLD PRICE:

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Due to VERY, VERY low mortgage rates, higher priced homes are now selling. Earlier in the year, many of the homes sold were most likely sold to “First time home buyers”, (Tax credit). Now it appears that those looking at higher priced homes ($350k +) are jumping on their chance to purchase a home at a great price and get the low interest rates. That is really what this chart indicates.

What Does This Mean??

OVERALL: The big problem in the market right now is two fold – First, confidence of the consumer and unemployment. Many people are very unsure about their employment and income situation or are out of a job all together. That doesn’t usually get people excited to buy a home when they are worried about whether they will get their next paycheck or not. Second is what is the distressed property inventory. When someone buys a home that is a foreclosure or short sale, there is no resulting sale from a home owner moving. That is a big issue, as that helps the chain to continue. That will be a major factor moving forward for the next three, maybe even five years, as foreclosures and short sales are not decreasing in their supply.

For Sellers: More of the same – If you don’t have to sell, you probably shouldn’t, UNLESS you are thinking of buying a bigger home and have lived in your current home for three years or more. In that case, there may be a very good chance that you could come out on the positive side for making that move. If you are thinking of doing that, please let us know and we can help you determine if it is worth it. If you must sell, choose your agent wisely. No matter your situation, there are only a few (really one team, us. . . ) agents out there that are doing a lot of business and that know this market well. Of course we want the chance to show you why more than 35 clients choose us since March of this year and why you should choose us. But it could mean the difference of attaining your dream or making a drastic mistake.

For Buyers: Interest rates continue to stay historically low. They can’t stay here forever. If inflation starts to happen, then rates will rise. So if you are ready, willing and able, there has never been a better time to purchase in the last 50+ years!! You have more choice than ever, prices are fantastic and you will save a TON of money with the interest rates. Call us to get your road map and get started!

Next Steps:

• What Is My Home Worth? Want to get a good idea of what your home is worth? Complete my Home Value Survey and find out what your Chester County Home is worth. . .
• What Is That Home Selling For? “Stop the car, honey … look at that house. I wonder what it’s selling for” Does this ever happen to you? Ever wonder what that house is selling for? Search and view all homes for sale in the Chester County area
• What do I need to know before I sell? Typically when a home does not sell, there is one reason…and it isn’t price. Please contact me to discuss what you need to know before you sell!

BTW, We do have very specific data for every price range and area of town. Want specific data pertaining to your neighborhood or your own home? We have it! Please let me know if you would like a neighborhood-specific analysis by contacting me!

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Better than new construction, this property is ready for immediate possession! See the gourmet kitchen and gleaming hardwood floors!

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Two ordinances addressing student housing were discussed, tweaked and approved at the Tredyffrin Township Board of Supervisors meeting. The Registration Ordinance and the Zoning Ordinance, while separate entities, will help to regulate and enforce student housing throughout Tredyffrin. Both current and future homeowners will be responsible for complying with the Registration Ordinance, but the Zoning Ordinance will only apply to future homeowners. Current homeowners renting to students will be grandfathered in. The ordinances were approved unanimously by the board and will go into effect on September 16. The registration ordinance requires both current and future homeowners who rent to students to register with the township. Homeowners will be required to provide their own contact information and that of their renters. Also, information must be provided about the college/university/trade school the renter will be attending. The township plans to be in contact with Realtors and local schools to document which students live where. The hope is that by documenting who owns and rents each home, contacting the individuals if necessary will be easier and more time-efficient. Separately, the Zoning Ordinance, states that all future homeowners wishing to rent to students in the R-1/2, 1, 2, 3 and 4 residential districts would need special-exception approval from the Zoning Hearing Board before occupancy. To qualify, the owner will need to show that the property meets the requirements of the ordinance. Those requirements include a buffer of at least 10 feet around the home, no more than three student tenants, and a specified minimum distance from other student homes.

Source: Main Line Media News; 8/18/2010

Study lauds Coatesville’s potential

Following three days of interactive workshops as part of a Pennsylvania Department of Transportation study considering funding redevelopment of Coatesville’s train station, project officials offered some surprising information. “We found you could support, today, 68,000 square feet of new restaurants and stores. They would generate $17.6 million in sales,” said Robert J. Gibbs, a market economist, of Gibbs Consulting Group. “I think our study was conservative, too conservative. I think you could generate $30 million in sales.” The market study was just one part of an overall project that will result in recommendations to PennDOT regarding what it would take to redevelop the station. As part of an initiative called Plan the Keystone, PennDOT wants to improve 12 targeted stations along the Keystone Corridor from Harrisburg to Philadelphia. According to Batson, the corridor is important not just regionally but nationally.

Source: Daily Local; 8/26/2010

West Whiteland municipal building’s contractor sues township

The general contractor for the new West Whiteland Township municipal building is suing the township for $1.5 million, claiming the township withheld funds that it and subcontractors were owed. The township says the building leaks and that is why they withheld payments.  In a lawsuit filed Aug. 11, attorneys for Magnum, Inc., a Warminster-based company, said the $1.5 million represented contractual obligations that the township failed to pay, additional costs due to township-caused delays, and costs associated with change orders that the township initiated among other things. Magnum is also trying to recoup expenses incurred as a result of trying to correct the leak problem. While the township claims that Magnum performed faulty or defective work, the contractor claims the alleged deficiencies were caused by the township’s project design.

Source: Daily Local; 8/23/2010

Customers: Rate hike ‘horrendous’

Protesting a rate increase that would more than triple the average customer’s bill, residents turned out in force Tuesday at two hearings regarding wastewater rates for Pennsylvania American Water Company. Speakers described the requested rate, which according to a news release from the company would raise the average customer’s monthly bill from $27.43 to $90.26, as “unconscionable,” “horrendous,” “unthinkable,” and “outrageous” and criticized the company on a range of charges, from unfairness to poor service. But the primary challenges to the rate increase were the arguments that the company was unduly shifting an investment burden to the customers. Company representatives said the primary reason for the rate increase, which would increase revenues to the company by $8.2 million, was the construction of a new wastewater treatment facility in which the company had invested $55 million. The facility in South Coatesville serves Coatesville, East Fallowfield, Caln, West Caln, Valley, Sadsbury, West Sadsbury, Highland and West Brandywine. More than 600 people turned out for the two meetings.

Source: Daily Local; 8/25/2010

Penn Township embarks on Comprehensive Plan project

The Penn Township Board of Supervisors and Planning Commission will be revising the township’s comprehensive plan. The township will be working closely with the Chester County Planning Commission to hold 14 work sessions and two public meetings in the coming months. The task force will begin in earnest on Wednesday, September 15 at 7 p.m.

Source: Chester County Press, 8/25/2010

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Existing Home Sales

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They are back on track to be on pace with the trend, which hit it’s high in the middle of 2005. While the Tax Credit did increase sales, it also artificially inflated prices. It’s not healthy.

Existing Homes: Months of supply

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At their highest levels in more than 10 years. The same goes for the stats locally. Another “not good” sign.

A Distressing Gap

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The reason for the gap, as explained by CalculatedRiskBlog.com is because of the huge amounts of inventory in resale homes and distressed properties. Once that inventory is reduced, that gap will close. My question is – when will that happen? At this rate, with the real rate of unemployment close to 17%, not for at least several years.

A few more thoughts on the current state of affairs. . .

• Sales – The National Association of REALTORS had been projecting over the last year a sharp decline for the period immediately following the expiration of the home buyer tax credit, since many buyers rushed to take advantage before the deadline expired. This coupled with continued employment concerns was a major reason for the decline in sales.
• Prices – There is a silver lining for current homeowners. Their value has firmed across the region, with numerous gains reported (Year-over-year for July, prices were up 1% in Delaware County, 7.6% in Chester County and 9.6% Montgomery County). All year, we’ve been seeing a flattening price trend, which is the greatest benefit of the home buyer tax credit. Looking ahead, prices are likely to hold fairly event – in part from very low new construction, and prices are coming back in line relative to family income.
• Market Conditions – There are great opportunities now for buyers who weren’t able to take advantage of the tax credit. Mortgage interest rates are at record lows, home prices have firmed and there is a good selection of property in most areas. Thus, buyers with good jobs and favorable credit ratings find themselves in a fortunate position.
• Outlook – Near-term home sales will be soft – the real question is what happens in the 4th Quarter. Job creation so far this year has been less than forecast, but with rock-bottom mortgage interest rates and historically-high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy can consistently add jobs.

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West Chester Borough Council passed a non-binding resolution Wednesday night asking West Chester University to stop buying real estate in the borough. The resolution also requests that the university reimburse the borough for tax revenues lost as the result of a recent land purchase. The university is tax-exempt, which means it does not pay real estate taxes on the properties it owns. Earlier this year, it purchased two privately owned buildings on South High Street: the College Arms student housing complex and a house at 624 S. High St. Borough officials calculate that the university’s purchase of College Arms will reduce real estate tax revenue by more than $7,400 per year. This money, officials said, will have to be made up by the borough’s residential and commercial taxpayers. Borough officials said the university did not consult with them before purchasing these properties. Officials added that the purchase violates an agreement the university struck with West Chester a decade ago not to buy more land in the borough. Borough officials have long been worried about the high percentage of tax-exempt properties in the municipality. Properties owned by Chester County, Chester County Hospital, the West Chester Area School District, the university, churches and nonprofits cannot be taxed.  Such properties make up nearly 36 percent of borough land.

Source: Daily Local; 8/20/2010

Penn supervisors ponder fate of ordinance records

Anyone seeking an up-to-date copy of ordinances passed by Penn Township is apparently out of luck. The ordinance book is so outdated, no complete books are available. Supervisor William Finnen urged his colleagues to accept a $14,735 proposal from McCormick Taylor engineers to prepare the ordinance book for codification. Board Chairman Curtis Mason opposed the contract due to its limits. The board agreed to contact Chester County officials for help.

Source: Daily Local; 8/18/2010

Coatesville RDA refocuses on future

The Flats, the Pulver Hotel, the Chetty project, and the Fleetwood Street homes are just a few of the redevelopment projects that currently fall under the purview of the Coatesville Redevelopment Authority (RDA). The RDA board recently discussed creating a business plan and a strategic plan to organize the assets for which it is responsible. The board is also considering seeking help from the Chester County Economic Development Committee, and voted to create a two-member committee to work with city staff and the CCEDC in creating these plans.  As changes in leadership and economic challenges have stalled planned improvements in the city, the 10-year-old organization has become an increasingly important partner in the effort to move forward toward completing city goals. The nonprofit organization offers a wide range of services, including financing services, a business retention and expansion program, work force development and industry partnerships, and land and building site selection.

Source: Daily Local; 8/18/2010

East Bradford neighbors complain sun glare is blinding from solar panels

While few people may be able to afford large solar panel arrays, one enthusiastic homeowner on Muirfield Drive in East Bradford covered his roof with the panels and by doing so created a glare problem for his neighbors. Township officials say they are aware of the complaint and are working with the solar company that installed the panels. Brenden Beaumont, the township’s zoning officer, said he was working with the solar company to come up with a solution. The township is now requiring that a glare study be done as part of the permit process for any solar application whether it is roof-mounted or ground-mounted.  The study will examine the angle of the sun at the location of the photovoltaic system throughout the year on an hour by hour basis as well as the angles of the panels. The Board of Supervisors recently adopted rules governing ground-mounted systems requiring that they be no larger than 500 square feet and not be placed in a front yard. In the last three years, the township has issued permits for about 10 residential solar systems and one solar farm.

Source: Daily Local; 8/18/2010

Plans forthcoming for NVF site in Kennett Square

The NVF industrial site’s future awaits a plan to address its various environmental issues. Abandoned for years, the former industrial site was recently bought by the Delaware Valley Development Corp.  Borough Manager Brant Kucera said owner George Beer’s plans for the site will likely arrive before borough officials soon. Kucera said earlier plans for the site included a traditional neighborhood layout of age-restricted housing with townhomes and single-family dwellings. He said officials also discussed a commercial or municipal component, including a community center and shops.

Source: Daily Local; 8/16/2010

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The Chris & Caleb Team Assessment: More of the same, Move up Sellers/Buyers have opportunity…

We are pretty optimistic guys, and while the July stats are not “Doom and Gloom”, it definitely ain’t pretty either! Let’s take a look. . .

PENDINGS:

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Pending indicates future closed sales. We at the Chris & Caleb Team refer to this as “Intended Demand”. Pending stats continue to climb out of the incredible hole that the tax credit put it in. Pendings grew to the 350 mark in July, but as you can see, it is still a good way away from where the 5 year trend is and even last years numbers. So, while it is a good sign that pendings are increasing, they are still way off the norm, indicating a slower than usual market.

CLOSED SALES:

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Closed Sales or “Demand” for homes in July was way down. We have been warning of this for the last several months after we saw the pendings drop off after the end of the tax credit. It was only a matter of time before the drop caught up with actual closed transactions. Closed sales were off almost a WHOPPING 40%! But, as we have seen in Pending Sales indicators, this number will most likely not stay down that far for long. We feel strongly the rest of 2010 will most likely be off by about 20% or more in closed sales.

ACTIVE LISTINGS/SUPPLY:

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This number is the probably the most concerning of all the numbers we see. Right now the number of homes for sale is roughly 12% over what the 5 year trend is, and easily the most we have seen in recent history. Economics 101 – Demand slows, supply increases – it means prices come down and everything slows down. With recent news that experts say that the 2011 economy is going to be worse than this years, these numbers are not good. Buckle up folks, as if things are tough already, it’s gonna get tougher.

AVERAGE SOLD PRICE:

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The average sold price is much more of an indicator as to what price range is selling than it is of what our homes are worth in Chester County. It appears that in July, higher end homes were the hot ticket item. We believe this was driven by “Move Up” seller/buyers who were selling their “First time home buyer” homes to Tax Credit buyers and then looking for a larger, move up home. In addition, interest rates have been extremely attractive for higher end buyers who have been on the fence, just waiting for such a time. It is very likely that August’s numbers will rejoin 2009′s numbers.

What Does This Mean?

For Sellers: Unfortunately, nothing new for seller’s. Not to be a broken record, but if you don’t have to sell, you probably shouldn’t. We will say this, one type of home owner that would greatly benefit from selling right now would be what we call a “MOVE UP SELLER/BUYER”. This is someone who has outgrown their current home for one reason or another and wants to buy a larger house. While you won’t get as much for you home as a few years ago, the same goes for the home you want to buy, if not more so. If your home’s value has declined 5% in the last several years, you can be that the larger home that you want is even more on sale. Plus 5% at $200k vs 5% at $400k is quite a difference. Factor in the incredibly low interest rates (4.5% conventional) and this could be the deal of the century. If you are considering selling your home but don’t think you can get enough for it, please contact us. We can get you the insight and advice you need to make the best decision possible. We expect the market to be “depressed” for another several years, possibly as many as 4 or 5. But that also means that what you are going to buy will be “on sale” as well. You may make out better now, than you would in several years. But to know that for sure, let us get you the facts and information you need to make that educated decision.

For Buyers: For those lucky few who are qualified and ready to buy, this in an incredible time to do so. Mortgage rates are historically low at 4.5% for 30 yr conv. or 3.8% for 15 year fixed. With inventory going up, seller’s will have more and more competition which means their prices will have to come down. BUT – you must make sure you align yourself with the right agent. We are confident that we are those agents. To know what your next steps are just get in contact with us!

Next Steps:

• What Is My Home Worth? Want to get a good idea of what your home is worth? Complete my Home Value Survey and find out what your Chester County Home is worth. . .
• What Is That Home Selling For? “Stop the car, honey … look at that house. I wonder what it’s selling for” Does this ever happen to you? Ever wonder what that house is selling for? Search and view all homes for sale in the Chester County area
• What do I need to know before I sell? Typically when a home does not sell, there is one reason…and it isn’t price. Please contact me to discuss what you need to know before you sell!

BTW, We do have very specific data for every price range and area of town. Want specific data pertaining to your neighborhood or your own home? We have it! Please let me know if you would like a neighborhood-specific analysis by contacting me!

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After a year’s moratorium on registration charges for vacant properties, Coatesville City officials plan to discuss reinstating the registration fee during council’s regular meeting Monday. Two years ago, the city passed an ordinance requiring the owners of a vacant property to register it with the city. The cost for registration is $250, but last year, the city voted to waive the fee. In addition, according to Karl Marking, city council vice president, some concerns arose regarding how fairly the statute was administered. A vacant property is defined as one in which no one resides for more than 60 days, but city officials have acknowledged that legitimate reasons may exist for a property to be empty. The ordinance may be amended after council discusses it. Damalier Molina, urban planning and codes director, is hoping that the fee will be reinstated, partly to help pay for a new codes enforcement officer. Molina estimated 125 to 200 properties are vacant in the city. The primary purpose of the registration is to make it easier for the city to hold property owners accountable, officials said. Suburban REALTORS Alliance staff is meeting with the Coatesville codes department early next week; please submit any comments to esmist@suburbanrealtorsalliance.com.

Source: Daily Local; 8/8/2010

Residents ask Phoenixville to maintain street trees

The Phoenixville Shade Tree Commission heard from nearly 20 residents regarding trimming issues and the possibility of the borough turning tree trimming back over to homeowners. Commission member Paul Kusko told the audience that the borough is dealing with budget issues. Currently, by ordinance, the Borough of Phoenixville is responsible for the care and maintenance of regulated street trees, including the removal of those that are dead, dying, and/or hazardous. Amid tough budget conditions this is one borough service that is being considered for termination for the upcoming fiscal year. This would shift the responsibility of the maintenance and removal of regulated street trees back to the homeowners of properties abutting the right-of-way where the trees are located. Over the past four years the borough has been spending $40,000 to $80,000 per year on regulated street tree maintenance and removals.

Source: Daily Local; 8/11/2010

Hearings scheduled on Coatesville water rate hike

The Pennsylvania Public Utility Commission said Friday it has scheduled two hearings to receive public comment on the proposed rate increase by Pennsylvania American Water Co. Coatesville Wastewater Operations. The meetings will be held at 1 p.m. on August 24 in Council Chambers of Coatesville’s City Hall and at 7 p.m. on August 24 at Rainbow Elementary School (1113 W. Lincoln Highway).  More information on the ratemaking process is available on the Commission’s Web site at www.puc.state.pa.us. Coatesville’s Wastewater Operations provides service to about 6,035 customers in the city of Coatesville, Parkesburg Borough and West Sadsbury, East Fallowfield, Caln, West Caln, West Brandywine, Valley, Sadsbury and Highland townships. Members of the public are invited to attend the hearings and provide comments. Customer testimony will become part of the record on which the utility commission will issue its final decision.

Source: Daily Local; 8/6/2010

Tredyffrin to consider regulating student rental housing

The Tredyffrin Board of Supervisors will consider two ordinances that would regulate student rental housing in the township at their August 16 public meeting. A proposed property registration ordinance for student rental housing would require the registration of student contact information with the township. The ordinance places a limitation on the number of student tenants living in a home to three. It also provides for minimum distances between student homes. The Suburban REALTORS Alliance has been closely monitoring the progress of this ordinance. Click here to read the summary for each ordinance.  Please contact esmist@suburbanrealtorsalliance.com with any questions or comments.

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