“Demand Edges Lower on Tight Inventory and Weather; Low Rates Supportive However”
Check the table of contents for your local market!
“Although the economy is still performing well due to factors such as low unemployment and solid retail sales, uncertainty remains regarding trade tensions, slowed manufacturing and meek business investments.”
Buyers still feeling the squeeze of low inventory, even as mortgage rates drop.
Check the table of contents for your local market! In the Philadelphia/Southern NJ area, the inventory is flat and
“While it remains true that sales prices are running higher and that inventory options are relatively low, buyers are beginning to find wiggle room at some price points and geographies.”
Prices are still up. Inventory is still down. Buyers who want to buy should be prepared for some intense negotiations.
“ …[I]n order for sales to increase on a grand scale, buyers will need more spending power, or sellers will need to reduce prices to land where buyers are most active. Neither situation is likely to occur in 2019…”
“Meanwhile, new listings and total homes for sale have been trending lower in year-over-year comparisons in many areas, and last year's marks were already quite low.”
“…agents that saw less favorable demand observed a continued dislocation between buyer and seller price expectations, with many buyers exhibiting limited urgency to purchase today and price reductions occurring in response…”
“…sequential traffic improvement, but look for the sales pace to track closer to 2017. Consistent with trends, demand is outpacing supply at the more affordable price points with agents citing an uptick in competition for homes below ~$300k.”
Buyers, have your preapprovals in hand and prepare for multiple competing offers.
“For the first time since August, the majority of our agents saw a sequential increase in home prices. This comes despite increased existing home inventory as sellers prepare for spring demand, though we note affordable supply remains constrained.”
Weather contributed to a slow start to the real estate market this year. Buyers are being more discriminating as the median price rises.
While inventory still remains constrained in the entry level market, overall prices have started to stabilize.
“While the home affordability topic will continue to set the tone for the 2019 housing market, early signs point to an improving inventory situation, including in several markets that are beginning to show regular year-over-year percentage increases. As motivated sellers attempt to get a jump on annual goals, many new listings enter the market immediately after the turn of a calendar year. If home price appreciation falls more in line with wage growth, and rates can hold firm, consumer confidence and affordability are likely to improve.”
“Nevertheless, affordability concerns are causing a slowdown in home price growth in some markets, while price reductions are becoming more common.”
Home prices in our neck of the woods (PA and Southern NJ) took a dip, indicating good news for buyers!
“…more people are waiting until spring, in hopes of new inventory and greater clarity around conditions. That said, pent-up demand persists for more affordable, entrylevel homes across the country .”
“…declining prices and rising inventory lead more buyers to take a wait-and-see approach.”
“Given tempered prices, agents reported buyers taking time to explore their options and waiting for a better entry point.”
The market seems to be correcting itself and giving buyers a measure of power back.
“Notably, agents observed inventory build and price reductions much more so at higher price points, while inventory at entry-level price points is still seen as tight, and this price point also happens to be where demand is stronger. This disconnect was seen to be frustrating potential entry-level buyers amidst the rising rate environment.”
“A trend of market balance is emerging as we approach the end of 2018. Prices are still rising in most areas, and the number of homes for sale is still low, but there is a general shrinking of year-over-year percentage change gaps in sales, inventory and prices.”
Great update from Realtor.com gives hope to buyers. Price gains have moderated and inventory shrinkage seems to have reached an inflection point.
“While hints of buyer relief continue to surface, it’s still a very favorable landscape for sellers in many hot moderately-priced and secondary markets. Nationally, homes are still selling faster than last year, and at higher prices – but momentum is quickly shifting, and that could ease conditions for some buyers next year. “
“Rather than dwelling on predictions of a somber future, it is worth the effort to manage the fundamentals that will lead to an ongoing display of healthy balance.”
“Among the cities seeing the greatest [price] declines are Seattle, San Francisco, Philadelphia, and Boston. This comes as many reported an increase in inventory levels, although off a severely low base and with the shortage still acute in the affordable price range.”
“Challenging affordability, which agents attributed to still-elevated home prices exacerbated by higher mortgage rates, was the most commonly cited factor driving the sequential decline in buyer activity.”
“While some are starting to look for recessionary signs like fewer sales, dropping prices and even foreclosures, others are taking a more cautious and research based approached to their predictions. The fact remains that the trends do not yet support a dramatic shift away from what has been experienced over the last several years.”
Our local market report is still awaiting a market shift.
"The months’ supply of homes on the market rose for both new and existing homes. The listed inventory of new homes for sale at the end of June would support 5.7 months of sales at the current sales pace, up from 5.3 months in both May and one year ago and the highest since August 2017. Inventory increased 10.3 percent year-over-year to 301,000 available properties, the most since March 2009"
While this is a good sign, it remains to be seen whether this is an indicator of a larger trend or merely a statistical blip.
"Prices have continued to gain traction. The Median Sales Price increased 10.6 percent to $210,000. Days on Market was down 31.0 percent to 29 days. Sellers were encouraged at Months Supply of Inventory was down 25.0 percent to 2.7 months."
This report reiterates what we have been seeing: prices are rising and buyers' bids are largely meeting them.
"House price gains have strengthened due to a lack of housing supply...the employment situation remains positive with low unemployment rate and solid payroll gains supporting housing demand."
"Although the 30-year mortgage rate did not increase, buyers often react by locking in at the current rate ahead of assumed higher rates later. When this happens, accelerated price increases are possible, causing further strain on affordability."
Be ready for competitive biding situations!
"We look for demand, driven by the re-emergence of first-time and entry level buyers, to outpace supply as we move through the current housing cycle."
"Broadly inadequate inventory levels and escalating concerns about affordability appear to be suppressing traffic from an otherwise healthy pool of buyers. In spite of these concerns, job growth and an improved economic outlook continue to support healthy traffic levels in a number of markets."
"With payrolls trending upward and unemployment trending downward month after month in an extensive string of positive economic news, demand remains quite strong. Given the fact that gradually rising mortgage rates often infuse urgency to get into a new home before it costs more later, buyers need to remain watchful of new listings and make their offers quickly."
The market continues to tighten as the housing supply dwindles. Sellers should be encouraged that prices continue to rise and the average number of days on the market right now is down to 41!
Rising rates and low inventory hasn't discouraged buyers! Expect multiple competitive offers!!
"There may not be massive increases in inventory from week to week, but a longer-term trend toward more new listings would be a good sign. Low inventory should continue to create a competitive situation for buyers, causing price increases over the next several months."
Days on the market are down to 48 days! If you've been waiting to sell your property and make a premium on it, now is the time!
We are now seeing legitimate spring weather and, despite the ongoing inventory crunch, the buyers are coming out of the woodwork! Prices are up, time to sell is down. List with us now!
"Despite there being fewer homes for sale, buyer demand has remained strong enough to keep prices on the rise, which should continue for the foreseeable future."
If you're selling, now is a good time!
"Prices continued to gain traction. The Median Sales Price increased 17.6 percent to $200,000. Days on Market was down 23.5 percent to 52 days. Sellers were encouraged as Months Supply of Inventory was down 37.5 percent to 2.0 months."
"The Federal Reserve raised its key short-term interest rate by .25 percent in March, citing concerns about inflation. It is the sixth rate increase by the Fed since December 2015, and at least two more rate increases are expected this year."
If you're buying, the sooner you act, the better!
"[G]reater willingness among buyers to move further out to the periphery, as rates rise and they seek greater square footage"
With the limited inventory available and the increase in rates, buyers need to be ready to act quickly and decisively. Act now before the spring market thaw when buyers will flood the market!
"Home listings declined while the time to sell a home quickened."
See slide 30 for our local market.
"Markets are poised for increased supply, so there is hope that more sellers will take advantage of what appears to be a ready and willing buyer base."
Unprecedented tightness in the market as supply hits an all-time low!
We're heading for the spring buying and selling season now, when the buyers will start coming out of the woodwork. If you're looking to buy a home, act quickly because it won't get any easier! If you're looking to sell your home, the time is now!
"Half of new homebuyers took less than three months from the time they started searching to the day they closed on their home. And 75 percent of buyers said the process took less than six months. Anecdotally, Realtors® have reported that their buyer clients feel higher pressure to make offers on homes or to make bigger offers than they would have liked to get the home that they want. Through the course of 2018, we look forward to learning whether the fast-paced transaction is a response to current pressures on buyers in the market, or if a near majority of buyers consistently move this quickly in buying a home."
"Economic strength helped support demand this month, with buyers continuing to search through the low inventory levels... Home listings declined and the time to sell quickened."
See slide 28 for our local market.
"Those in the market to buy a home have caught on. As sellers attempt to take advantage of rising prices, expect buyers to be more selective...Days on Market was down 20.0 percent to 48 days. Sellers were encouraged as Months Supply of Inventory was down 31.3 percent to 2.2 months."
If you're thinking of selling your home, all this is very good news. Now is the best time to get the best price and quickest sale!
"Unemployment rates have remained low throughout 2017, and wages have shown improvement, though not always to levels that match home price increases. Yet housing demand remained incredibly strong in 2017, even in the face of higher mortgage rates that are likely to increase further in 2018. Home building and selling professionals are both cautiously optimistic for the year ahead. Housing and economic indicators give reason for this optimism, with or without new federal tax legislation."
Click the link above to read the full report!
"New tax legislation could have ramifications on housing. The White House believes that the tax reform bill will have a small impact on home prices, lowering them by less than 4 percent, and could conceivably boost homeownership. The National Association of REALTORS® has stated that eliminating the mortgage interest deduction could hurt housing, as the doubled standard deduction would reduce the desire to take out a mortgage and itemize the interest associated with it, thus reducing demand."
"We note that buyers are seeking more value and are motivated by the prospects of further price appreciation and the potential for higher rates...We believe the broader upturn in housing remains intact and look for the reemergence of entry-level buyers to drive much of the growth."
Check out slide 28 for data on our local market.
"Although inventory levels are low in many markets, there has largely been enough listing and building activity, or at least conversation about future activity, to maintain a positive attitude about the prospects of buying or selling a home. Low affordability has started to become a recent topic of conversation and is worth watching. But with a healthy economy, level of demand and national unemployment rate, sellers are going to continue to see strong prices for their homes."
"We believe the upturn in housing remains intact and look for the re-emergence of entry-level buyers to drive much of the growth."
Seasonal slowdown coupled with increasing prices on inadequate inventory is squeezing many buyers out of the market, however prices are set to keep inching upwards.
The Housing Finance Policy Center’s (HFPC) mission is to produce analyses and ideas that promote sound public policy, efficient markets, and access to economic opportunity in the area of housing finance. At A Glance, a monthly chartbook and data source for policymakers, academics, journalists, and others interested in the government’s role in mortgage markets, is at the heart of this mission.
"[A]lthough mortgage rates have remained enticingly low, home prices have reached unaffordable levels for many new entrants into the housing pool at exactly the same time that established owners are proving to be less interested in moving."
Today, October 17, 2017, the Pennsylvania Infrastructure Investment Authority (PENNVEST) and the Pennsylvania Housing Finance Agency announced an expansion to the state’s Sewer and Septic Repair Loan Program.
This is a state loan program that provides low interest loans to cover repairs to residential septic systems and first-time connections to a public sewer. It now is being expanded to include loans for repairs to existing sewer line connections to home. Loan amounts can now be as high as $25,000.
The eligibility for these loans is as follows:
No restrictions on household income as of 1/20/2016.
Borrowers will be underwritten to determine ability to repay the loan.
Borrowers must be PA residents seeking to improve their primary residence which meets program requirements.
Project Location: for on-lot septic repair, all areas of PA are eligible unless a public wastewater collection and treatment system is either in place or will be constructed in the next five years. For sewer connections, any area of PA is eligible.
Allowable Project Types: rehabilitation, improvement, repair, or replacement of an existing septic system or a homeowners' lateral connection to a public sewer.
Financeable Project Costs: system design charges, construction fees and costs, inspection, and permit fees, connection fees (also known as "tap-in fees"), and most loan origination fees.
Two unit dwellings deeded as one property are eligible unless the residence is a manufactured home, then one unit only.
Documentation: applicants must gather and provide for lender and PHFA review, all income and credit information, applicable permits, project specifications, connection fees for sewer connections, or, if you are replacing or repairing an on-lot septic system, verification from your local municipality that a wastewater disposal system neither exists nor is planned in the next five years. Additional information supporting the loan application may also be requested.
These loans are a great low-cost way to get your septic system up to snuff and provide you ease of mind. Nothing kills a sale faster than a failing septic or sewage disposal system.
The lenders who originate the Homeowner Septic Program loans are: Liberty Mortgage Corporation, Erie; The Muncy National Bank, Muncy; Widget Financial Credit Union, Erie; American Bank, Allentown; Erie FCU, Erie; and Members' Choice Financial Credit Union, Danville. Together they make the Homeowner Septic Program available statewide. You can also call PHFA at 1-855-U-Are-Home to be connected with the agency's Customer Solutions Center.
READ MORE ABOUT THE PROGRAM HERE
Credit Suisse Real Estate Survey - September 2017
Steady September—Inventory shortage discourages buyers
Demand remains high, but there are few viable options out there for cash-strapped buyers, and the sellers know it, and are less willing to take lower offers. Be prepared to face multiple bidders if you're just entering the market.
Credit Suisse Real Estate Survey - August 2017
Home prices are still rising and will continue to do so until we get some more inventory in the market. Luckily, interest rates remain low to allow buyers a little extra room to work with.
LVAR.org Market Indicators for August
As the busy summer selling season dies down, the market is opening up a little for buyers willing to move during the school year. However, limited inventory, much of poor quality, is limiting buyer interest. Luckily, looking to the future, the report indicates
"[r]ecent manufacturing data is showing demand for housing construction materials and supplies, which may help lift the ongoing low inventory situation in 2018."
The national headline is "Buyers Hesitant Due to Concerns on Pricing and Inventory Quality" however the demand for low priced housing is still strong and many first time homebuyers are trying to break into a crowded market.
"Prospective buyers are being deterred by a shortage of desirable, affordable inventories across markets. Buyers dissatisfaction with the quality of the home they can afford continues to be the most frequently cited challenge in the market. On the other hand, sellers generally continue to view the tight supply as a reason to hold or raise listing prices, despite the growing pushback from buyers."
"How long can the residential real estate market go on like this? We are about two years into a national trend of dropping housing supply and increasing median sales prices. There are some regional variations to the story, but the shift to a predominantly seller's market is mostly complete. Multiple-offer situations over asking price are commonplace in many communities, and good homes are routinely off the market after a single day. It is evident that a favorable economy keeps hungry buyers in the chase. New Listings decreased 4.0 percent to 1,048. Pending Sales were up 14.8 percent to 824. Inventory levels shrank 39.5 percent to 2,321 units. Prices were fairly stable. The Median Sales Price increased 0.5 percent to $190,000. Days on Market was down 25.5 percent to 41 days. Sellers were encouraged as Months Supply of Inventory was down 42.4 percent to 3.4 months. Although the unemployment rate remains unchanged at its favorable national 4.3 percent rate, wage growth has not been rising at the steady clip that would be expected in an improving economy. Sales activity manages to keep churning along despite looming shortages in new construction. Lower price ranges are starting to feel the effects of the supply and demand gap, as first-time buyers scramble to get offers in at an increasing pace."
Click the link to read all their data!
Dwindling inventory is making it harder for buyers to find an acceptable property. If you're looking for a property, have a pre-approval in hand and be ready to move quickly and bid competitively, or else your dream home will get snapped up while you're still thinking about it.
The JUNE 2017 Barclays Real Estate A.G.E.N.T. (Analyzing, Gauging, & Exploring Neighborhood Trends)
Again, low inventory is creating stronger demand. If you're thinking of selling your property, now is the time. Turn to page 28 to see the Philadelphia/Southern NJ market details.
"...lending standards are now much stronger than they were before. Incomes must be verified, a reasonable amount of money must be paid toward the home prior to purchase and a more stringent loan approval process is in place to prevent a repeat performance of the Great Recession." This speaks to the necessity of obtaining a quick non-contractual pre-approval before going home shopping. Be prepared before entering this very competitive market!
With pending sales up almost 9% and actual closed sales up only 1%, it is vitally important to get a strong preapproval from a solid lender before you start looking. The market is moving fast and if you have to stop to get a preapproval, that house you've fallen in love with will likely have multiple offers. Get ready to bid competatively. If you're thinking of selling, the market is desperate for new inventory, with sellers receiving an average of over 97% of list price and sitting on the market for just over 60 days, now is the time!
With inventory still dwindling, the time to buy is now, before rates go up and before everyone else comes out of the woodwork trying to do the same thing. Call me!
"[B]uyer activity is easily outpacing seller activity in much of the country, culminating in relatively quick sales and low supply." If you're looking to buy, don't hesitate, and be prepared to pay list price or above. The market is extremely competitive and will only become more so heading into the summer. If you're considering selling, now may be the time!
The FEBRUARY 2017 Barclays Real Estate A.G.E.N.T. (Analyzing, Gauging, & Exploring Neighborhood Trends)
The latest trends in the Real Estate market. Rates are rising and inventory continues to dwindle with no clear reprieve on the horizon. Now may be the best time to buy for a while.
Sale prices remain largely flat as inventory continues to plummet to lows not seen since the recent recession. Sale prices largely kept low as a result of cautious mortgage appraisals.
Interesting analysis of our current lack of inventory: "[I]ntriguingly low
interest rates often prompt refinancing instead of listing, contributing to lower
inventory. Recent studies have also shown that short-term rentals are keeping a
collection of homes off the market."
Article from Members section of LVAR.org
"Closed home sales in the Lehigh Valley cooled off during August; could be the norm for remainder of 2016"
The Greater Lehigh Valley REALTORS® (GLVR) reported August data that shows dwindling inventory numbers are beginning to adversely affect the valley’s real estate market — cooling down the sales hot streak the market’s been riding most of the year, but luckily not extinguishing rising prices.
Nonmember Friendly link to full article.
"Demand is certainly present and has created competitive situations that have kept prices up. Rental prices are also up, which may lure more toward homeownership." Inventory is down over 40% from last year. List now! Get a good price before trends reverse!!
"With homes not staying on the market very long, buyers now need to move fast in order to get the home they want, and they may have to pay more for it. "
"Most demand not actionable however as qualifying for a mortgage remains difficult." Speaks to the need of getting a pre-approval from a reputable local lender. A mortgage is much harder to get now than in 2006-2007. Make sure you can qualify for one before you fall in love with a home!
Inventory is down almost 35% from last year! Looking to sell?
"Valley residents are buying. Homes are selling — often with quick multiple offers that are near, at or even above asking price...But inventory is still being stretched thin in many areas and without a fresh supply of homes due to the lag in new construction, there could be faced with some unfavorable buying conditions if the demand for homes remains high. "
Demand is high and supply is low. Basic economics: it's a seller's market. Thinking of selling? Give us a call!
Limited inventory means that if it's priced right, your house could sell in a flash.
Check your local market!!
Market indicators for the Lehigh Valley housing market.
Check your local market!
"Should the inventory numbers continue to dwindle, expect competition for the
best available properties to heat up in the coming months — particularly when
you consider the current favorable economic climate for home buying: low
unemployment rate at or near 4.9 percent, an unprecedented 70 consecutive
months of private-sector job growth, and mortgage rates below 4.0 percent"
Check your local market! Page 25 and 27 for New Jersey and Pennsylvania. Things are ramping up for the spring! Buy now before prices really pop.
Check your local market! Now is a great time to buy before the market really explodes in the spring.
Take a look at the above report and check your local market; message me with any questions you may have. Your property may be worth more than you think!