Reprinted with permission from Keeping Current Matters (www.KCM.com)
Families are trying to determine whether or not now is the time to buy a home. Some are advising these families to sit out the current real estate market and instead rent for the next year or two. We do not agree with this advice. Homeownership means a lot to a family. We also realize that the financial aspects of purchasing a home today can be a concern. The challenge is any advice given by someone in the real estate community is immediately dismissed as self-serving.
For this reason, we want to give you the advice of three entities not involved in real estate sales:
Citigroup
“When we examine the relationships between mortgage payments and income and mortgage payments and rent, we see that these relationships have also reverted back to or below equilibrium points. In some cases, particularly when mortgage payments are compared to the cost of renting, home prices actually appear cheap.”
JP Morgan
“JPMorgan analysts said ‘the continuation of falling rental vacancies and rising rental demand will make home buying increasingly attractive’, especially as rental prices increase.”
Business School professors Eli Beracha and Ken H. Johnson
“Fundamental drivers now appear to be in place that favor homeownership over renting in the near term future…
The second finding might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting…
Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases.”
Bottom Line
Is it better to rent or buy? According to those quoted above, it seems it may be becoming a no-brainer.
Wednesday, June 1, 2011
Thursday, May 19, 2011
HOUSE PRICES IN OUR AREA, WHAT DO THE TEA LEAVES SAY NOW?
As new economic data become available, it is possible to try and read the tea leaves and divine what is going to happen to house prices over the next year or so. This is my shot to do just that. Thanks for reading and I hope that it makes sense.
First a little background. It is generally understood that house prices peaked in our area (and in most of the country) in mid to late 2006. That means we have been in a downturn going on five years now.
According to CNN Money, prices kept declining until April of 2009, at which point they began to recover. A few pundits felt this was the bottom. However, the national number dipped again and hit a new low in February of 2011.
Further, numbers of foreclosures are still accelerating. According to the OCC and OTS Mortgage Metrics Report of 3/20/11, forclosures in process nationwide were 1,290,253 in the fourth quarter of 2010. That is up by 19.6% from the same quarter a year earlier.
According to the same report, new short sales are up by 30.3% from a year earlier, although the pace is down a little from the third quarter of 2010.
One nice thing about history is that at least you know where you have been. With respect to forecasts, the only thing you know for sure is that you will be wrong. You never know if you will be wrong early, wrong late, wrong high or wrong low - just that you will be wrong. However, knowing about general directions in advance can be real helpful in making plans, so here goes.
One of the factors driving real estate price declines across the country has been the number of foreclosures and short sales. California, Nevada and Arizona have been cited as worst examples of the basket cases in real estate. However, the S&P Report of 4/20/11 shows that many areas in those three states are projected to be clearing up their backlogs in from 18 to 36 months. On the other hand, many areas in SE Pennsylvania are projected to need between 72 to as much as 120 months to clear the backlog. If true, that would say that we are in for a long spell of working off excess inventory which will keep prices low.
Reuters News Service in February stated, "...economists now expect home prices will fall 2.3 percent in 2011 and then begin a slight recovery in 2012..."
David Stiff, chief economist of Fsserv said this in February, 2011. "Large supplies of foreclosed properties will continue to be the biggest downside risk for home prices..."
Radar Logic reported in March, 2011, "The supply of homes for sale and potentially for sale is very large relative to demand, and it continues to be fed by high rates of mortgage defaults and foreclosures. At the same time, demand for houses is constrained by tight lending standards. Unfortunately, delcining home prices are likely to exacerbate these challenges to the housing market"
I could quote more of the same, but you get the idea. My bottom line and what I am advising people is this:
+ If you absolutely need to sell, sell now. This is as good a time as you will probably have in the next two years.
+ If you can afford to stay in your present house for two years or more, it may be best to do that.
+ However, you really need to consider what you will do if you sell. It could be that the low mortgage rates and prices will help you to make up more in your next purchase than you will lose in selling now.
Where is the bright side you ask? - it is a fantastic time to buy. Prices are soft and going lower; mortgage interest rates are at historic lows. If you have equity in your house and want to move up, now is a great time.
How can a seller make use of these current trends? Well if you need to sell, now is probably the best time that you will have in the next couple of years. If you can wait for more than two years to sell, my advice would be to do it. I certainly hope that prices will be better by then. Of course, if somebody had asked me two years ago if prices would still be going down, I would have said probably not.
Not an easy set of trade offs to manage, but it can be done. If anyone would like some help in that or has another related real estate question, please feel free to email me at delcorealestate@gmail.com or call me at 484-468-1306.
Would appreciate your thoughts and comments.
First a little background. It is generally understood that house prices peaked in our area (and in most of the country) in mid to late 2006. That means we have been in a downturn going on five years now.
According to CNN Money, prices kept declining until April of 2009, at which point they began to recover. A few pundits felt this was the bottom. However, the national number dipped again and hit a new low in February of 2011.
Further, numbers of foreclosures are still accelerating. According to the OCC and OTS Mortgage Metrics Report of 3/20/11, forclosures in process nationwide were 1,290,253 in the fourth quarter of 2010. That is up by 19.6% from the same quarter a year earlier.
According to the same report, new short sales are up by 30.3% from a year earlier, although the pace is down a little from the third quarter of 2010.
One nice thing about history is that at least you know where you have been. With respect to forecasts, the only thing you know for sure is that you will be wrong. You never know if you will be wrong early, wrong late, wrong high or wrong low - just that you will be wrong. However, knowing about general directions in advance can be real helpful in making plans, so here goes.
One of the factors driving real estate price declines across the country has been the number of foreclosures and short sales. California, Nevada and Arizona have been cited as worst examples of the basket cases in real estate. However, the S&P Report of 4/20/11 shows that many areas in those three states are projected to be clearing up their backlogs in from 18 to 36 months. On the other hand, many areas in SE Pennsylvania are projected to need between 72 to as much as 120 months to clear the backlog. If true, that would say that we are in for a long spell of working off excess inventory which will keep prices low.
Reuters News Service in February stated, "...economists now expect home prices will fall 2.3 percent in 2011 and then begin a slight recovery in 2012..."
David Stiff, chief economist of Fsserv said this in February, 2011. "Large supplies of foreclosed properties will continue to be the biggest downside risk for home prices..."
Radar Logic reported in March, 2011, "The supply of homes for sale and potentially for sale is very large relative to demand, and it continues to be fed by high rates of mortgage defaults and foreclosures. At the same time, demand for houses is constrained by tight lending standards. Unfortunately, delcining home prices are likely to exacerbate these challenges to the housing market"
I could quote more of the same, but you get the idea. My bottom line and what I am advising people is this:
+ If you absolutely need to sell, sell now. This is as good a time as you will probably have in the next two years.
+ If you can afford to stay in your present house for two years or more, it may be best to do that.
+ However, you really need to consider what you will do if you sell. It could be that the low mortgage rates and prices will help you to make up more in your next purchase than you will lose in selling now.
Where is the bright side you ask? - it is a fantastic time to buy. Prices are soft and going lower; mortgage interest rates are at historic lows. If you have equity in your house and want to move up, now is a great time.
How can a seller make use of these current trends? Well if you need to sell, now is probably the best time that you will have in the next couple of years. If you can wait for more than two years to sell, my advice would be to do it. I certainly hope that prices will be better by then. Of course, if somebody had asked me two years ago if prices would still be going down, I would have said probably not.
Not an easy set of trade offs to manage, but it can be done. If anyone would like some help in that or has another related real estate question, please feel free to email me at delcorealestate@gmail.com or call me at 484-468-1306.
Would appreciate your thoughts and comments.
Friday, May 6, 2011
HELP, I'M GETTING BEHIND ON MY MORTGAGE AND DO NOT KNOW WHAT TO DO
To begin here is a shocking statistic. 28% of the homeowners in the United States are "Under Water". That means they owe more on their mortgage than their house is worth.
Now, that does not mean that every one of these homeowners is in trouble. Many are still making their payments on time and plan to continue.
The folks who are in real trouble are the ones who are "Under Water and who also lose a job, need to sell right now to move to another part of the country, have a serious illness that interrupts employment, undergo a divorce or other big family upset. If they owe more than the house is worth and also encounter anything that undermines their ability to pay, they can be in a real pickle.
In other words, they find themselves in a place where they need to sell their house but the proceeds are too small to pay off the lender(s). What in the world can they do? Is foreclosure the only option? Most people would probably say yes to this question, but they would be wrong. A homeowner in this position has options other than foreclosure, but they need to get help. An experienced realtor, backed up with the right kind of legal and accounting help can provide this help.
If a homeowner is really "Under Water" and cannot make ongoing mortgage payments, the better avenue is to present the lender, who holds the first mortgage, with all of the facts in the case. If the lender agrees that the homeowner has a legitimate case, they will probably agree to a "Short Sale".
What is a "Short Sale" you say? That is an agreement wherein the lender agrees to accept whatever proceeds come from the sale of the home, even if it is less than what is owed, as full satisfaction of the debt. The lender will insist on the right to approve the deal, but in most cases, they will accept significantly less than the total amount owed.
Stated differently, if the lender(s) agree and the homeowner sells the house, all of the debt/liens that were on the house can be forgiven.
There are lots of advantages to this course of action as opposed to foreclosure. A few of them are:
Person who undergoes foreclosure is ineligible for another Fannie Mae backed mortgage for 5 years. A person who closes a short sale may become eligible after only 2-3 years.
After foreclosure, the former homeowner may find that he or she still owes the bank a lot of money. With a short sale, whatever the bank does not recover from the sale is forgiven and the homeowner owes nothing more.
Foreclosure lowers credit scores from 150 to 300 points, typically for over 3 years. A short sale can lower the credit score by as little as 50 points and the impact can be as short as 12 to 18 months.
Short sales are also better for the banks. On average, a short sale property sells for 89% of the full market value of the house. If the bank has to foreclose, that typically costs the bank another $60,000. For that reason, if the bank becomes convinced that the homeowner really cannot be expected to pay, it is also in their best interest to arrange for a short sale.
For the above and a lot of other reasons, a short sale is a lot better than foreclosure.
If you or anyone you know would like to learn more, in confidence, please email me at DelcoRealEstate@Gmail.com or call me at 484-574-4088.
Now, that does not mean that every one of these homeowners is in trouble. Many are still making their payments on time and plan to continue.
The folks who are in real trouble are the ones who are "Under Water and who also lose a job, need to sell right now to move to another part of the country, have a serious illness that interrupts employment, undergo a divorce or other big family upset. If they owe more than the house is worth and also encounter anything that undermines their ability to pay, they can be in a real pickle.
In other words, they find themselves in a place where they need to sell their house but the proceeds are too small to pay off the lender(s). What in the world can they do? Is foreclosure the only option? Most people would probably say yes to this question, but they would be wrong. A homeowner in this position has options other than foreclosure, but they need to get help. An experienced realtor, backed up with the right kind of legal and accounting help can provide this help.
If a homeowner is really "Under Water" and cannot make ongoing mortgage payments, the better avenue is to present the lender, who holds the first mortgage, with all of the facts in the case. If the lender agrees that the homeowner has a legitimate case, they will probably agree to a "Short Sale".
What is a "Short Sale" you say? That is an agreement wherein the lender agrees to accept whatever proceeds come from the sale of the home, even if it is less than what is owed, as full satisfaction of the debt. The lender will insist on the right to approve the deal, but in most cases, they will accept significantly less than the total amount owed.
Stated differently, if the lender(s) agree and the homeowner sells the house, all of the debt/liens that were on the house can be forgiven.
There are lots of advantages to this course of action as opposed to foreclosure. A few of them are:
Person who undergoes foreclosure is ineligible for another Fannie Mae backed mortgage for 5 years. A person who closes a short sale may become eligible after only 2-3 years.
After foreclosure, the former homeowner may find that he or she still owes the bank a lot of money. With a short sale, whatever the bank does not recover from the sale is forgiven and the homeowner owes nothing more.
Foreclosure lowers credit scores from 150 to 300 points, typically for over 3 years. A short sale can lower the credit score by as little as 50 points and the impact can be as short as 12 to 18 months.
Short sales are also better for the banks. On average, a short sale property sells for 89% of the full market value of the house. If the bank has to foreclose, that typically costs the bank another $60,000. For that reason, if the bank becomes convinced that the homeowner really cannot be expected to pay, it is also in their best interest to arrange for a short sale.
For the above and a lot of other reasons, a short sale is a lot better than foreclosure.
If you or anyone you know would like to learn more, in confidence, please email me at DelcoRealEstate@Gmail.com or call me at 484-574-4088.
Thursday, April 28, 2011
House Prices in Nether Providence Real Estate, What is Really Happening
This is another in my ongoing series of articles on what is happening to house prices in Delaware county.
National and regional trends tell only part of the story. While our area is certainly affected by those larger trends, just like politics, all real estate is local. This article focuses on single family house sales in Nether Providence Township (NP).
NP has actually been one of the areas that has shown more price retention than a lot of Delaware county, as measured by the average resale price of a single family house. Like most of the rest of our area, resale prices peaked in 2006 at $380,0452. That was an increase of 13% from 2005 and was the third year out of the most recent four in which prices showed double digit increases.
Here is a "Gee Whiz" number for you. From 2002, when the average resale price was "only" $244,342, the average resale price increased to the above mentioned $380,452 in 2006. That is an annual average increase of 13.5% (ah for the good old days, if you are an investor or a seller). Since the average increase in home prices is 3%, that was obviousle not sustainable, but I digress.
After prices peaked in 2006, NP actually was quite resistant to the overall regional price decrease in 2007. Average resale price declined only by about 1% in that year, before taking a negative hit of -11% in 2008.
Resale prices actually recovered slightly in the last two years, coming up to an average of $350,653 in 2010. (Ain't that a surpris though?)
Taking the longer view, prices have "only declined" by about 8% since the peak in 2006. Small consolation if you could have gotten $400,000 for your house back then and can expect $32,000 less now; but that is a lot heathier than some other parts of our area.
However, average resale price is only part of the picture, especially if you are a seller. Another measure of market health is the number of houses that are selling and how long does it take to sell.
All statistics are imperfect, but taken together they will give the best picture we can find. In NP, every year from 2001 through 2007, there were between 140 and 154 resales reported by our local Multiple Listing Service. Starting in 2008, those numbers were 104, 109 and 93. That is about a 30% reduction in annual sales, a big number by anyone's definition.
Another indicator of market health is the average Days on Market. That is the average number of days that a property was listed for sale before an agreement was finalized. In 2010 that was 112 days. In 2006, the last of the "Good Old Years", that number was 49. In other words, we have seen over a 100% increase in the amount of time it takes to sell a house.
However, for every cloud there is a silver lining. As much as this has been bad news for sellers and investors, it has been good news for buyers. The combination of soft and declining prices plus record low interest rates has resulted in an amazing window of opportunity for buyers. For those who are waiting for the market to bottom out to buy, my advice is to buy now. If you wait for evidence that we are at the bottom, you will have missed it.
If anyone would like more specific information, please give me a shout at DelcoRealEstate@Gmail.com. You can also try the old fashioned way by phone at 484-574-4088.
National and regional trends tell only part of the story. While our area is certainly affected by those larger trends, just like politics, all real estate is local. This article focuses on single family house sales in Nether Providence Township (NP).
NP has actually been one of the areas that has shown more price retention than a lot of Delaware county, as measured by the average resale price of a single family house. Like most of the rest of our area, resale prices peaked in 2006 at $380,0452. That was an increase of 13% from 2005 and was the third year out of the most recent four in which prices showed double digit increases.
Here is a "Gee Whiz" number for you. From 2002, when the average resale price was "only" $244,342, the average resale price increased to the above mentioned $380,452 in 2006. That is an annual average increase of 13.5% (ah for the good old days, if you are an investor or a seller). Since the average increase in home prices is 3%, that was obviousle not sustainable, but I digress.
After prices peaked in 2006, NP actually was quite resistant to the overall regional price decrease in 2007. Average resale price declined only by about 1% in that year, before taking a negative hit of -11% in 2008.
Resale prices actually recovered slightly in the last two years, coming up to an average of $350,653 in 2010. (Ain't that a surpris though?)
Taking the longer view, prices have "only declined" by about 8% since the peak in 2006. Small consolation if you could have gotten $400,000 for your house back then and can expect $32,000 less now; but that is a lot heathier than some other parts of our area.
However, average resale price is only part of the picture, especially if you are a seller. Another measure of market health is the number of houses that are selling and how long does it take to sell.
All statistics are imperfect, but taken together they will give the best picture we can find. In NP, every year from 2001 through 2007, there were between 140 and 154 resales reported by our local Multiple Listing Service. Starting in 2008, those numbers were 104, 109 and 93. That is about a 30% reduction in annual sales, a big number by anyone's definition.
Another indicator of market health is the average Days on Market. That is the average number of days that a property was listed for sale before an agreement was finalized. In 2010 that was 112 days. In 2006, the last of the "Good Old Years", that number was 49. In other words, we have seen over a 100% increase in the amount of time it takes to sell a house.
However, for every cloud there is a silver lining. As much as this has been bad news for sellers and investors, it has been good news for buyers. The combination of soft and declining prices plus record low interest rates has resulted in an amazing window of opportunity for buyers. For those who are waiting for the market to bottom out to buy, my advice is to buy now. If you wait for evidence that we are at the bottom, you will have missed it.
If anyone would like more specific information, please give me a shout at DelcoRealEstate@Gmail.com. You can also try the old fashioned way by phone at 484-574-4088.
Monday, April 18, 2011
BEHIND ON THE MORTGAGE? HELP IS AVAILABLE FOR YOU
As the economic slowdown seems to go on and on forever, more and more homeowners are feeling the pinch of trying to keep up with their monthly payment. As of today, there are 3,838 houses listed for sale in Delaware County. 257 of these are "Short Sales" (about 7%) which means that the sellers have too little equity in the property to pay off the mortgage when they sell.
The bad news is that this trend seems to be increasing. The good news is that help is available and that lenders are willing to work with homeowners and their agents to work out a settlement. More good news (for buyers at least, is that Short Sales can be a chance to buy a house at a significant discount to the market.
Many homeowners feel that there is no choice between keeping up their payments and declaring bankruptcy. Actually, they do have significant leverage with their lenders, for these reasons.
If a homeowner decides to just leave and "Give the house back to the bank", his or her credit rating takes an enormous hit that sticks with them for years. Banks do not like it either, because the foreclosure process is long (14-18 months in PA),it costs them a lot of money and the average foreclosure sells for only 59% of the normal value.
If however, the homeowner approaches the bank and lays out the case for a short sale, the average sale price for that situation is 81% of the normal value. That is 22 percentage points. On a house that is worth $300,000 in today's market, that is a difference of about $66,000 in more money to the bank. Other positives for the lender are that the whole short sale process costs a lot less and it can be done a lot faster. While neither a Short Sale nor a Foreclosure is a good thing for the lender, the Short Sale is a lot less damaging.
Not all situations are candidates for a Short Sale, but a lot of them are. If you think that you might qualify or if you know someone who might, you or they will be relieved to know that help is available that can get you out from under a real bad situation. However, this is not something that you should try on your own. You need the help of a trained and able Realtor to help you through the process.
If you would like to learn more about Short Sales, please send me a confidential email at DelcoRealEstate@Gmail.com or make an equally confidential phone call to me at 484-574-4088.
The bad news is that this trend seems to be increasing. The good news is that help is available and that lenders are willing to work with homeowners and their agents to work out a settlement. More good news (for buyers at least, is that Short Sales can be a chance to buy a house at a significant discount to the market.
Many homeowners feel that there is no choice between keeping up their payments and declaring bankruptcy. Actually, they do have significant leverage with their lenders, for these reasons.
If a homeowner decides to just leave and "Give the house back to the bank", his or her credit rating takes an enormous hit that sticks with them for years. Banks do not like it either, because the foreclosure process is long (14-18 months in PA),it costs them a lot of money and the average foreclosure sells for only 59% of the normal value.
If however, the homeowner approaches the bank and lays out the case for a short sale, the average sale price for that situation is 81% of the normal value. That is 22 percentage points. On a house that is worth $300,000 in today's market, that is a difference of about $66,000 in more money to the bank. Other positives for the lender are that the whole short sale process costs a lot less and it can be done a lot faster. While neither a Short Sale nor a Foreclosure is a good thing for the lender, the Short Sale is a lot less damaging.
Not all situations are candidates for a Short Sale, but a lot of them are. If you think that you might qualify or if you know someone who might, you or they will be relieved to know that help is available that can get you out from under a real bad situation. However, this is not something that you should try on your own. You need the help of a trained and able Realtor to help you through the process.
If you would like to learn more about Short Sales, please send me a confidential email at DelcoRealEstate@Gmail.com or make an equally confidential phone call to me at 484-574-4088.
Monday, April 11, 2011
MOVE UP NOW OR WAIT FOR RECOVERY? IT IS PROBABLY A DIFFERENT ANSWER FROM WHAT YOU MIGHT THINK
A common dilemma today is the homeowner wondering if it makes sense to sell in todays market and make that move up to a better house or wait until the market recovers.
Logical question, and the initial gut reaction is, "Man the value of my house is way down. I have to wait." However, when you look at the cash flows of making the move now and the estimated cash flows of waiting five years, the answer is a little bit surprising. Bottom line is that if you have enough equity in your house to cover the cost of moving up, you are smart to make that move right now. Of course if you are upside down and owe more than your house is worth, that is another story (and the subject for another blog which will be coming up shortly).
How in the world can that be you ask? Most of the answer lies in the extremely attractive interest rates for home mortgages, which are at historic lows right now. (4.5%, no points vs historical rates of 6.5% or more)
To explain further, please see below. Here are the planning assumptions that are behind the numbers.
Planning Assumptions
+ House prices decline for one more year, recover starting in 2012 and increase thereafter at the long term historical rate of 3% a year.
+ Home mortgage rates are at 4.5% in 2011.
+ Home mortgage rates increase to 6.5% by 2016.
+ Down payment of 20%
Under those conditions, if a house can be sold for $270,000 today and the sellers move up to a house that costs $450,000, their new Principal and Interest payment would be $1,824 a month.
If they wait until 2016, it is true that the selling price of their house will have increased up to $295,036. However, the price of the house to which they move up will also have increased, up to $491,727.
Their monthly payment after the 20% down payment will have increased to $2,486 a month. That is an increase of $662 a month or $7,948 a year.
Why is that so? Well, the increased mortgage amount accounts for about 25% of the increase, but the change in interest rates accounts for 75%.
What is the lesson? If you have enough equity in your present house to finance the move up, there will never be a better time to do it than today.
Another cash flow drawback of waiting for five years is that the amount of the 20% down payment will also have increased by, in this example, $8,345.
If you would like to explore these possiblities for your own situation, just give me a shout at 484-574-4088 or email to DelcoRealEstate@Gmail.com
Thanks for listening.
Logical question, and the initial gut reaction is, "Man the value of my house is way down. I have to wait." However, when you look at the cash flows of making the move now and the estimated cash flows of waiting five years, the answer is a little bit surprising. Bottom line is that if you have enough equity in your house to cover the cost of moving up, you are smart to make that move right now. Of course if you are upside down and owe more than your house is worth, that is another story (and the subject for another blog which will be coming up shortly).
How in the world can that be you ask? Most of the answer lies in the extremely attractive interest rates for home mortgages, which are at historic lows right now. (4.5%, no points vs historical rates of 6.5% or more)
To explain further, please see below. Here are the planning assumptions that are behind the numbers.
Planning Assumptions
+ House prices decline for one more year, recover starting in 2012 and increase thereafter at the long term historical rate of 3% a year.
+ Home mortgage rates are at 4.5% in 2011.
+ Home mortgage rates increase to 6.5% by 2016.
+ Down payment of 20%
Under those conditions, if a house can be sold for $270,000 today and the sellers move up to a house that costs $450,000, their new Principal and Interest payment would be $1,824 a month.
If they wait until 2016, it is true that the selling price of their house will have increased up to $295,036. However, the price of the house to which they move up will also have increased, up to $491,727.
Their monthly payment after the 20% down payment will have increased to $2,486 a month. That is an increase of $662 a month or $7,948 a year.
Why is that so? Well, the increased mortgage amount accounts for about 25% of the increase, but the change in interest rates accounts for 75%.
What is the lesson? If you have enough equity in your present house to finance the move up, there will never be a better time to do it than today.
Another cash flow drawback of waiting for five years is that the amount of the 20% down payment will also have increased by, in this example, $8,345.
If you would like to explore these possiblities for your own situation, just give me a shout at 484-574-4088 or email to DelcoRealEstate@Gmail.com
Thanks for listening.
Tuesday, April 5, 2011
Sales Still Struggling in Our Area
Market Report: Residential Home Sales Fall 3% in February, in our Area
Statistics are courtesy of MLS Trend and KCM.com
Residential sales activity for southeastern PA, southern New Jersey and Delaware dropped 3.8% in February 2011 compared to a year ago, according to statistics generated by MLS Blue. There were 2,785 sales reported in February 2011, compared to 2,896 in February 2010.
Two counties saw increases in sales activity, with the highest percentages in Chester County, PA (24.4%) and Mercer County, NJ (20.3%).
Of the remaining counties, the highest percentage decreases in sales were Salem County, NJ (25.0%), Montgomery County, PA (11.6%), Delaware County, PA (11.4) and Gloucester County, NJ (10.1%).
Sale Prices Decrease Slightly
Average sale prices decreased 2.3% when comparing numbers from February 2011 to February 2010. Overall, average sold prices increased in 5 counties.
The highest increases were:
• Delaware County, PA – 9.0%
• Philadelphia County, PA - 4.1%
• Montgomery County, PA – 3.5%
The highest decreases were:
• New Castle County, DE – 16.7%
• Kent County, DE – 16.4%
• Chester County, PA – 10.1%
Two counties saw higher median prices. Camden County, NJ led the way at 15.6%, while Salem County, NJ had the largest decrease at 21.8%. Bucks County, PA was unchanged.
Pending Sales Drop by 11%
Pending sales in February 2011 decreased in 10 counties compared to February 2010. Sales were 3,959 in February 2011 and 4,462 in February 2010.
The highest increases were:
• Kent County, DE – 25.3%
• New Castle County, DE – 20.3%
• Salem County, NJ – 11.1%
Individually, the highest decreases were:
• Camden County, NJ – 21.4%
• Bucks County, PA – 20.8%
• Philadelphia County, PA – 19.6%
Inventory at the end of February 2011 stood at 48,025 an increase of 2.8% from 46,671 in February 2010.
Comment from John Herreid: The inventory increase is another data point that shows we still have a lot of work to do to get out from under the inventory bulge that is the basic driver of soft and decreasing prices in our area.
Another large part of the inventory overhang problem, as per KCM.com, is that we have about an estimated 10 months of inventory across PA that is distressed , meaning it is heading for either a Short sale or Foreclosures. Short sales typically sell for about 81% of the full value of the property; foreclosures sell for about 59%. If you are interested in seeing what short sales and foreclosures are available in your area, please contact me at delcorealestate@gmail.com.
Statistics are courtesy of MLS Trend and KCM.com
Residential sales activity for southeastern PA, southern New Jersey and Delaware dropped 3.8% in February 2011 compared to a year ago, according to statistics generated by MLS Blue. There were 2,785 sales reported in February 2011, compared to 2,896 in February 2010.
Two counties saw increases in sales activity, with the highest percentages in Chester County, PA (24.4%) and Mercer County, NJ (20.3%).
Of the remaining counties, the highest percentage decreases in sales were Salem County, NJ (25.0%), Montgomery County, PA (11.6%), Delaware County, PA (11.4) and Gloucester County, NJ (10.1%).
Sale Prices Decrease Slightly
Average sale prices decreased 2.3% when comparing numbers from February 2011 to February 2010. Overall, average sold prices increased in 5 counties.
The highest increases were:
• Delaware County, PA – 9.0%
• Philadelphia County, PA - 4.1%
• Montgomery County, PA – 3.5%
The highest decreases were:
• New Castle County, DE – 16.7%
• Kent County, DE – 16.4%
• Chester County, PA – 10.1%
Two counties saw higher median prices. Camden County, NJ led the way at 15.6%, while Salem County, NJ had the largest decrease at 21.8%. Bucks County, PA was unchanged.
Pending Sales Drop by 11%
Pending sales in February 2011 decreased in 10 counties compared to February 2010. Sales were 3,959 in February 2011 and 4,462 in February 2010.
The highest increases were:
• Kent County, DE – 25.3%
• New Castle County, DE – 20.3%
• Salem County, NJ – 11.1%
Individually, the highest decreases were:
• Camden County, NJ – 21.4%
• Bucks County, PA – 20.8%
• Philadelphia County, PA – 19.6%
Inventory at the end of February 2011 stood at 48,025 an increase of 2.8% from 46,671 in February 2010.
Comment from John Herreid: The inventory increase is another data point that shows we still have a lot of work to do to get out from under the inventory bulge that is the basic driver of soft and decreasing prices in our area.
Another large part of the inventory overhang problem, as per KCM.com, is that we have about an estimated 10 months of inventory across PA that is distressed , meaning it is heading for either a Short sale or Foreclosures. Short sales typically sell for about 81% of the full value of the property; foreclosures sell for about 59%. If you are interested in seeing what short sales and foreclosures are available in your area, please contact me at delcorealestate@gmail.com.
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