I love Chester County for many reasons, but we have to admit that the market here has been extremely isolated compared to the national market’s trouble. I was very unsure what was going to happen last year coming out of doom and gloom at the end of 2008. It turned out not to be so bad. We can say for certain that the First Time Home Buyer tax credit certainly did do some of what we thought it would – namely get buyers off the fence and bring the inventory down. Boy did it ever.
Looking at the stats from 2009, we can see we still are not selling as many homes as we did from 2004 – 2006 and I don’t think we ever will. At least I don’t believe we should. That was a very unhealthy, false market. But we do seem to have hit a “bottom” or at least some semblance of stabilization. What this means for you if you are planning on selling your home in Chester County is that it can most likely happen in a more reasonable time frame, and you can still get a fantastic deal on a move up (or downsized) home. And if you are looking to buy, there are not as many homes to pick from, but you can still find some great deals.
I have included below a small chart comparing some important numbers for the market for 2009 to 2008. The fact that we only saw a 1.5% decrease in activity from 2008 to 2009 is a very good sign. 2007 – 2008 saw a huge slow down in activity, so this is a good sign. When looking at the average sale price, you have to take the Tax Credit into deep consideration. As I said in my previous post, 62% of the sales activity in Chester County from September – November of 2009 were “First time home buyer” homes, or homes sold at $300k or under. That is usually at about 40%, and so this greatly affects what the average sale price is. And remember, value of a home and average sale price from a market wide perspective are two different things.
Here are the big thoughts when looking back at 2009:
- The Tax Credit “worked”: While in many ways the tax credit has/can create a false market, it definitely got buyers off the fence and significantly reduced the inventory.
- Average Sold Price: Ended around $334,000. While it took a huge dive in the last quarter of the year, that was only because of the amount of activity the tax credit created. In December it was right back in line with trends.
- Inventory Levels: they are back down, almost to 2005 levels, which is a great sign, especially since we started out 2009 at almost record high levels. Let’s hope this trend sticks.
- Sold to list price ratios: Ended a bit off from 2008 at 92% overall. In order to say the market is truly recovering, this number has to get into the 95% – 96% range. Levels continuing at the low 90′s is a sign that prices are continuing to come down. Good news is that December of 2009 ended up slightly above what 2008 was.
- Demand was down, but not so much: Again, the Tax Credit really did a number. From July through the end of the year, there was a crescendo of activity which peaked in November, where demand was at levels not seen since 2005.
If you are thinking about moving this spring, now is an excellent time to do so. I would be honored to help you determine the market value of your home, or to help clarify a purchase strategy. Feel free to call, text, email me. I love what I do and I’d love to help you.
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Hi, Chris (I know your wife, April, from a youth group back in the 90′s)
I would be interested in any statistics for chester county (specifically new homes in Chester Springs) statistics because I purchased a new townhome in mid-2008 and it has since plummeted in value to roughly 25,000 less (~10%) than purchase. This has made refinancing extremely difficult for my neighbors and I. The community is finally finishing up its construction and sales, but many of us our shocked because we assumed we were purchasing in a somewhat stable zip code (Chester Springs) and we were supposedly receiving a non-advertised $30,000 dollar builders’ incentive at purchase (our neighbors who purchased in 2006 had values plummet even worse). If you look at sales prices in this community from 2006 to now, you can see ~ 15%-20% decline! Is this unique to our builder’s (Orleans) desire to complete our community, and if so, will this translate to a quicker than average turnaround when the community’s last home is sold? I think many of us expected some depreciation, but not to this degree. Many of us were first-time buyers, so all declines have been cash out of our pockets (never leveraged profit from a previous home). Any insight to our future?