Southern Chester County, PA - Real Estate Update

Housing activity in Southern Chester County, PA ended the first quarter of 2008 without much change in direction. The downward trend fueled by the continued lack of consumer confidence in our national economy, turbulent financial and stock markets and the uncertain political climate have effectively inhibited any forward momentum.

So how will we know when the direction of the market is changing? From a numbers perspective, economist generally follow three housing market indicators - the number of new listings coming on the market, the average number of days it takes for a home to sell and the sold price as a percentage of the original list or "asking" price. We'll take a look at each of these indicators for Southern Chester County.

For the first three months of 2008 there is a noticeable drop of 10% in the number of newly listed properties (chart 1) when compared to the same time period last year - the first indication of some improvement in our local housing market.

The average time on market (chart 2) prior to acceptance of a contract of sale is 102 days for the 1st quarter of 2008 vs. 86 days this time last year. This metric continues to increase month-to-month, as well as in comparison to the same month of last year, which is not a sign of improvement. 

The number of new contracts written has declined by 28% or 74 units in comparison to this same period last year.  And, contract activity by price range (chart 3) shows that the decline is across all price points in the market, with the exception of the slight increase in homes sold priced below $250,000.

On the whole, homes are selling with further reductions from their original list (chart 4) or asking price as motivated sellers attempt to find the "new market price" for their property - that is, the price a willing and able buyer will pay today. We'll see improvement in the market as homes begin to sell closer to their list price.

Overall there are 918 homes on the market, roughly the same as last year at this time. The number of homes available for sale (chart 5) at the various price points shows a slight reduction in supply of homes priced $250,000 to $550,000. Months' supply of inventory is about 14 months vs. 9 months this time last year.

As we have said in the past - people buy and sell houses in every kind of market - and in every market there are opportunities. A successful seller today is a motivated seller whose property is well-priced in relation to comparable homes in the area and showcased with strong curb appeal with all repairs completed. Maximum exposure of the property with an aggressive marketing strategy is key. Finally, when an offer is presented the seller must be willing to negotiate.

For buyers - locally, the supply of homes at every price point is plentiful and interest rates remain favorable. If you are planning on purchasing a home for the long-term, focus on the opportunity you have today to find the home you really want, and be less concerned about a potential short-term decline in price. Over time, as in past real estate cycles, prices will rise again.

(All reports presented are based on data supplied by TReND MLS. TReND MLS does not guarantee nor is it responsible for its accuracy. Data maintained by the MLS may not reflect all real estate activities in the market. Info


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