PA HOMEBUYERS, GREAT NEWS ON HOW TO TAKE ADVANTAGE OF VIRTUAL WORK TO FIND YOUR NEXT HOUSE

Even as some companies transition back into the office, remote work remains a popular choice for many professionals. So, if you currently enjoy working from home or hope to be able to soon, you’re not alone. According to a recent survey, most working professionals want to work either fully remote or a hybrid of in office and remote work.  (see below):

The most surprising piece of this new survey is that only 5% of working professionals want to work full time in company office. Smart comanies will take advantage of  this and structure their work processes to allow their people to work remotely and thus get the most capable people to work for them.

And conversely, these new preferences will allow the savvy job seeker to find the company that best fits his or her work environment.

And the companies that insisit on people coming to a central office, run the risk of losing their best people to more flexible and forward looking organizations.

This trend is good news if you’re looking to buy a home because a remote or hybrid work setup can help you overcome some of today’s affordability and housing inventory challenges.

More Work Flexibility Equals More Home Options

Remote or hybrid work opens up a world of opportunities. That’s because it allows you to broaden your search for your next home since you’re no longer limited to living close to your workplace. With the freedom to work from anywhere, you can explore more affordable areas that may be located farther away from bustling city centers or your office. This flexibility can be a game changer while higher mortgage rates are making it difficult for some homebuyers to afford a home.

An article from the New York Times (NYT) highlights how remote work can greatly assist you in overcoming that challenge:

“. . . take advantage of the opportunity remote work has presented to move to more affordable communities (either farther out in the suburbs, or in another part of the country).”

And, since the supply of homes for sale is still so low, another key challenge for you today may be finding something with all of the features you want and need. Because remote work allows you to broaden your search radius to include additional areas, you may actually have less trouble finding a home with the features you want the most because you’ll have a bigger pool of options to pick from.

Working remotely gives you the flexibility to find an affordable home with the features you want. In other words, you have a better chance of getting what you need without blowing your budget.

Bottom Line

Working remotely not only gives you more flexibility in your job but also presents a great chance to broaden your search for a home. Since you’re not limited to a specific location, you have the opportunity to explore more options. Let’s get in touch to discuss how this can expand your choices and help you find the perfect home.

SUGGESTED NEXT STEPS FOR YOU TO MAKE SURE YOU HAVE THE INFORMATION YOU NEED TO MAKE THE RIGHT DECISION

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move. I would like to become that real estate expert upon whom you can lean.
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect
  • There will be very unsettling headlines around the housing market this year. Most will come from inappropriate comparisons to the ‘unicorn’ years. Let’s connect so you have an expert on your side to help you keep everything in proper perspective.

 

MEDIA, RADNOR, MARPLE NEWTOWN, GARNET VALLEY, SPRINGFIELD REAL ESTATE, REALLY STRONG

Comparing real estate metrics from one year to another can be challenging in a normal housing market. That’s due to possible variability in the market making the comparison less meaningful or accurate. Unpredictable events can have a significant impact on the circumstances and outcomes being compared.

Comparing this year’s numbers to the two ‘unicorn’ years we just experienced is almost worthless. By ‘unicorn,’ what people are trying to convey is this:

“Something that is greatly desired but difficult or impossible to find.”

The pandemic profoundly changed real estate in 2020, 2021 and 2022. Some effects are still being felt, but things are normal enough now so that we can see some local and national trends.  Here are some of the pieces.

  • Waves of first-time and second-home buyers entered the market.
  • Already low mortgage rates were driven to historic lows.
  • The forbearance plan all but eliminated foreclosures.
  • Home values reached appreciation levels never seen before.
  • The demand for a home of our own skyrocketed, and people needed a home office and big backyard.

It was a market that forever had been “greatly desired but difficult or impossible to find.” A ‘unicorn’ year.

Now, things are getting back to normal. The ‘unicorns’ have galloped off.

Comparing today’s market to those years now makes some sense. Here are three examples of national trends and how our local market compares (and is more desirable)

Buyer Demand 

If you look at the headlines, you’d think there aren’t any buyers out there. We still sell over 10,000 houses a day in the United States. Of course, buyer demand is down from the two ‘unicorn’ years. But, according to ShowingTime, if we compare it to normal years (2017-2019), we can see that buyer activity is still strong (see graph below):

So showing activity is up nationallly but what about local? An even better measure of buyer interest is how long it takes a house to get sold. Right now the median days on market in our area is only 6.  That compares to 37 days on  market just a few years ago.

What this means for sellers is that if you have a house that you want to get on the market (make that move up buy perhaps?), you can  be assured that your house will sell quickly if it is priced correctly and marketed well.

Home Prices

We can’t compare today’s home price increases to the last couple of years. According to Freddie Mac, 2020 and 2021 each had historic appreciation numbers. Here’s a graph also showing the more normal years (2017-2019):

We can see that we’re returning to more normal home value increases. There were several months of minimal depreciation in the second half of 2022. However, according to Fannie Mae, the market has returned to more normal appreciation in the first quarter of this year.

Again, how does this compare to our area. From the above you can see  that the national average for home appreciation was 5%.  Check out the below chart for the local details.

Median prices were up by 6.4% in 2022; moreover, the trend continued into 2023 with year over year increases in 3 of the first 5 months.

What this means for buyers, both first time and move up, is that if you make that purchase now,  you can be reasonably sure that your house will only increase in value in the future.

I would not let the recent rise in interest rates discourage you from making a move.  I doubt if we will ever see mortgage rates in the 3-4% range again. If you put off making a move, the most likely effect is  that you will  miss out on several months (or perhaps years) of price appreciation.

WALLINGFORD SWARTHMORE, ROSE TREE MEDIA, RADNOR,
MARPLE NEWTOWN, SPRINGFIELD MEDIAN SALES PRICE
SINGLE FAMILY, DETACHED
Month Sale Price Sale Price Sale Price
2021 2022 2023
Jan $500,000 $552,500 $616,376
Feb $500,000 $500,000 $733,500
Mar $575,000 $552,500 $550,000
Apr $526,000 $527,500 $540,000
May $563,500 $621,000 $600,000
Jun $582,500 $585,000
Jul $589,450 $587,500
Aug $552,500 $671,900
Sep $536,500 $607,500
Oct $537,500 $570,000
Nov $531,000 $623,000
Dec $500,000 $510,000
Annual $541,163 $575,700
Annual Difference $34,538
Annual % Diff 6.4%
YTD  Thru May, 22 to 23 $550,700 $607,975
Diff Thru May, 22 to 23 $57,275
% Diff Thru May, 22 to 23 10.4%

Foreclosures 

There have already been some startling headlines about the percentage increases in foreclosure filings. Of course, the percentages will be up. They are increases over historically low foreclosure rates. Here’s a graph with information from ATTOM, a property data provider:

There will be an increase over the numbers of the last three years now that the moratorium on foreclosures has ended. There are homeowners who lose their home to foreclosure every year, and it’s heartbreaking for those families. But, if we put the current numbers into perspective, we’ll realize that we’re actually going back to the normal filings from 2017-2019.

I have only anecdotal  data on local foreclosures.  That comes from associates in the mortgage lending busness. They indicate that they see nothing unusual.

SUGGESTED NEXT STEPS FOR YOU TO MAKE SURE YOU HAVE THE INFORMATION YOU NEED TO MAKE THE RIGHT DECISION

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move. I would like to become that real estate expert upon whom you can lean.
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect
  • There will be very unsettling headlines around the housing market this year. Most will come from inappropriate comparisons to the ‘unicorn’ years. Let’s connect so you have an expert on your side to help you keep everything in proper perspective.
  • If you would like to listen to our recent 12 minute podcast on this topic, please just click the below hyperlink, 
    bit.ly/Local_Really_Strong_Real_Estate_Market

MEDIA, RADNOR, MARPLE NEWTOWN, GARNET VALLEY, SPRINGFIELD BEAT NATIONAL REAL ESTATE MARKET BY A LOT

If you’re following the news today, you may feel a bit unsure about what’s happening with home prices and fear whether or not the worst is yet to come. That’s because today’s headlines are painting an unnecessarily negative picture. Contrary to those headlines, home prices aren’t in a freefall. The latest data tells a very different and much more positive story. Local home price trends still vary by market, but here’s what the national data tells us.  More great news about local home prices later, but first here is a look at the national scene.

If we take a year-over-year view, home prices stayed positive – they just appreciated more slowly than they did at the peak of the pandemic. To get a more detailed picture of some of the trends in the market, we need to look at monthly data.

The monthly graphs below use recent reports from three sources to show that the worst home price declines are already behind us, and prices are on their way back up nationally.

The story this more detailed monthly view tells us is that the last year has been a tale of two halves in the housing market. In the first half of 2022, home prices were climbing, and they peaked in June. Then, in July, home prices started to decline (shown in red in the graphs above). And by roughly August or September, the trend began to stabilize. As we look at the most recent data for the early part of 2023, these graphs also show a recent rebound in momentum with prices ticking back up. Monthly changes in home prices are gaining steam as we move into the busier spring season.

While one to two months doesn’t make a trend, the fact that all three reports show prices have stabilized is an encouraging sign for the housing market. The month-over-month data conveys a clear, but early, consensus that a national shift is taking place today. In essence, home prices are starting to tick back up.

Andy Walden, Vice President of Enterprise Research at Black Knight, says this about home price trends:

“Just five months ago, prices were declining on a seasonally adjusted month-over-month basis in 92% of all major U.S. markets. Fast forward to March, and the situation has done a literal 180, with prices now rising in 92% of markets from February.”

Selma Hepp, Chief Economist at CoreLogic, explains the limited supply of homes available for sale is contributing to this positive turn:

“ . . . prices in many large metros appeared to have turned the corner, with the U.S. recording a second month of consecutive monthly gains. . . . The monthly rebound in home prices underscores the lack of inventory in this housing cycle.” 

WHAT DOES THIS MEAN FOR MEDIA, RADNOR, MARPLE NEWTOWN, GARNET VALLEY AND SPRINGFIELD?

Check out the below chart that shows median sales prices single family detached houses from January, 2021 through May of 2023.

MEDIA, RADNOR, MARPLE NEWTOWN, GARNET VALLEY, SPRINGFIELD
MEDIAN SALES PRICES, SINGLE FAMILY DETACHED HOMES.
Month Sale Price Sale Price Sale Price
2021 2021 2021
Jan $518,900 $550,000 $722,500
Feb $505,200 $500,000 $752,000
Mar $575,000 $545,500 $550,000
Apr $525,500 $501,500 $545,000
May $547,500 $623,000 $600,000
Jun $565,000 $599,000
Jul $600,000 $605,000
Aug $550,000 $675,000
Sep $546,500 $613,000
Oct $543,500 $570,000
Nov $540,000 $630,000
Dec $500,000 $510,000
Annual $543,092 $576,833
Year over Year Prices up in 9 of 12 months in 2022.
Annual Prices up by 6.2% in 2022
Trend continues for 4 of first 5 months in 2023

National year over year prices were down in almost every month during the last six months of the year. NOT SO IN OUR AREA WHERE PRICES WERE UP IN EACH OF THE LAST 6 MONTHS.

ANNUAL PRICE INCREASE IN 2022 WAS 6.2%.

AND THE TREND CONTINUES IN 4 OF THE FIRST 5 MONTHS IN 2023.

HERE’S WHAT THIS MEANS FOR YOU

  • Sellers: If you’ve been holding off on selling because you’re worried about what was happening with home prices and how it would impact the value of your home, it may be time to jump back in and partner with an agent to list your house. You don’t have to put your needs on hold any longer because the latest data shows a turn in your favor.
  • Buyers: If you’ve been waiting to buy because you didn’t want to purchase something that would decrease in value, you now have the peace of mind things are looking up. Buying now lets you make your move before home prices climb more and gives you the chance to own an asset that typically grows in value over time.
  • I endorse these opinions from the national experts, EVEN MORE STRONGLY FOR OUR AREA.
  • IF YOU ARE A FIRST TIME BUYER OR A MOVE UP BUYER, THIS IS PROBABLY THE BEST TIME WE WILL EVER SEE TO MAKE THOSE MOVES.

SUGGESTED NEXT STEPS FOR YOU TO MAKE SURE YOU HAVE THE INFORMATION YOU NEED TO MAKE THE RIGHT DECISION

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move.
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect.
  • If you would like to listen to our recent 12minute podcast on this topic, please just click the below hyperlink, 
    bit.ly/Chesco_Delco_Home_Prices_Beat_National_By_A_Lot

WEST CHESTER, DOWNINGTOWN, GREAT VALLEY, BEAT NATIONAL REAL ESTATE MARKET BY A LOT

If you’re following the news today, you may feel a bit unsure about what’s happening with home prices and fear whether or not the worst is yet to come. That’s because today’s headlines are painting an unnecessarily negative picture. Contrary to those headlines, home prices aren’t in a freefall. The latest data tells a very different and much more positive story. Local home price trends still vary by market, but here’s what the national data tells us.  More great news about local home prices later, but first here is a look at the national scene.

If we take a year-over-year view, home prices stayed positive – they just appreciated more slowly than they did at the peak of the pandemic. To get a more detailed picture of some of the trends in the market, we need to look at monthly data.

The monthly graphs below use recent reports from three sources to show that the worst home price declines are already behind us, and prices are on their way back up nationally.

The story this more detailed monthly view tells us is that the last year has been a tale of two halves in the housing market. In the first half of 2022, home prices were climbing, and they peaked in June. Then, in July, home prices started to decline (shown in red in the graphs above). And by roughly August or September, the trend began to stabilize. As we look at the most recent data for the early part of 2023, these graphs also show a recent rebound in momentum with prices ticking back up. Monthly changes in home prices are gaining steam as we move into the busier spring season.

While one to two months doesn’t make a trend, the fact that all three reports show prices have stabilized is an encouraging sign for the housing market. The month-over-month data conveys a clear, but early, consensus that a national shift is taking place today. In essence, home prices are starting to tick back up.

Andy Walden, Vice President of Enterprise Research at Black Knight, says this about home price trends:

“Just five months ago, prices were declining on a seasonally adjusted month-over-month basis in 92% of all major U.S. markets. Fast forward to March, and the situation has done a literal 180, with prices now rising in 92% of markets from February.”

Selma Hepp, Chief Economist at CoreLogic, explains the limited supply of homes available for sale is contributing to this positive turn:

“ . . . prices in many large metros appeared to have turned the corner, with the U.S. recording a second month of consecutive monthly gains. . . . The monthly rebound in home prices underscores the lack of inventory in this housing cycle.” 

WHAT DOES THIS MEAN FOR WEST CHESTER, DOWNINGTOWN AND GREAT VALLEY?

Check out the below chart that shows median sales prices single family detached houses from January, 2021 through May of 2023. 

WEST CHESTER, DOWNINGTOWN, GREAT VALLEY, MEDIAN SALES PRICE, SINGLE FAMILY
Month Sale Price Sale Price Difference % Diff Sale Price Difference % Diff
   2021    2022 2023
     ($)      ($)       ($)    (%)      ($) (      $)    (%)
Jan $525,000 $565,000 $40,000 7.6% $636,500 $71,500 12.7%
Feb $577,000 $554,000 ($23,000) -4.0% $620,000 $66,000 11.9%
Mar $557,188 $635,000 $77,812 14.0% $671,500 $36,500 5.7%
Apr $557,500 $685,600 $128,100 23.0% $660,750 ($24,850) -3.6%
May $591,820 $657,000 $65,180 11.0% $723,800 $66,800 10.2%
Jun $575,000 $687,977 $112,977 19.6%
Jul $642,500 $675,000 $32,500 5.1%
Aug $604,000 $647,500 $43,500 7.2%
Sep $575,000 $637,401 $62,401 10.9%
Oct $580,000 $605,000 $25,000 4.3%
Nov $550,000 $599,500 $49,500 9.0%
Dec $610,000 $590,000 ($20,000) -3.3%
Annual $578,751 $628,248 $49,498 8.6%
Year to Date $662,510 $43,190
Year over Year Up, 10 of 12 months in 2022
Year over Year Up, 4 of 5 months Year to Date in 2023

National year over year prices were down in almost every month during the last six months of the year. NOT SO IN OUR AREA WHERE PRICES WERE UP IN 5 OF THE LAST 6 MONTH.

ANNUAL PRICE INCREASE IN 2022 WAS 8.6%.

AND THE TREND CONTINUES IN 4 OF THE FIRST 5 MONTHS IN 2023.

Here’s What This Means for You

  • Sellers: If you’ve been holding off on selling because you’re worried about what was happening with home prices and how it would impact the value of your home, it may be time to jump back in and partner with an agent to list your house. You don’t have to put your needs on hold any longer because the latest data shows a turn in your favor.
  • Buyers: If you’ve been waiting to buy because you didn’t want to purchase something that would decrease in value, you now have the peace of mind things are looking up. Buying now lets you make your move before home prices climb more and gives you the chance to own an asset that typically grows in value over time.
  • I endorse these opinions from the national experts, EVEN MORE STRONGLY FOR OUR AREA.
  • IF YOU ARE A FIRST TIME BUYER OR A MOVE UP BUYER, THIS IS PROBABLY THE BEST TIME WE WILL EVER SEE TO MAKE THOSE MOVES.

SUGGESTED NEXT STEPS FOR YOU TO MAKE SURE YOU HAVE THE INFORMATION YOU NEED TO MAKE THE RIGHT DECISION

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move.
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect.
  • If you would like to listen to our recent 12minute podcast on this topic, please just click the below hyperlink, 
    bit.ly/Chesco_Delco_Home_Prices_Beat_National_By_A_Lot

MEDIA, PA: WHY BUYING A HOME PROBABLY MAKES MORE SENSE THAN RENTING

Media, PA: Why Buying a Home Probably Makes More Sense Than Renting

Wondering if you should continue renting or if you should buy a home this year? If so, consider this. Rental affordability is still a challenge and has been for years. That’s because, historically, rents trend up over time. Data from the Census shows rents have been climbing pretty steadily since 1988.

And, data from the latest rental report from Realtor.com shows rents continue to grow today, even though it’s at a slower pace than we saw at the height of the pandemic:

“In March 2023, the U.S. rental market experienced single-digit growth for the eighth month in a row . . . The median asking rent was $1,732, up by $15 from last month and down by $32 from the peak but is still $354 (25.7%) higher than the same time in 2019 (pre-pandemic).”

With rents much higher now than they were in more normal, pre-pandemic years, owning your home may be a better option, especially if the long-term trend of rents increasing each year continues. In contrast, homeowners with a fixed-rate mortgage can lock in a monthly mortgage payment for the duration of their loan (typically 15-30 years).

Owning a Home Could Be More Affordable if You Need More Space

The graph below uses national data on the median rental payment from Realtor.com and median mortgage payment from the National Association of Realtors (NAR) to compare the two options. As the graph shows, depending on how much space you need, it’s typically more affordable to own than to rent if you need two or more bedrooms:

So, if you’re looking to live somewhere where you have two or more bedrooms to accommodate your household, give you more breathing room to spread out your belongings, or dedicate the extra space to practice your hobbies, it might make sense to consider homeownership.

HOW DOES THIS SHAKE OUT FOR MEDIA BECAUSE, LIKE POLITICS, ALL REAL ESTATE IS LOCAL . WE HAVE TO CONSIDER THAT Home ownership Allows You To Start Building Equity

Let’s compare the relative costs and benefits of renting a 2 bedroom dwelling in Media with buying the median priced 2 bedroom detached house. Median rent in Media is about $2,400. Median price for a 2 bedroom detached house is about $370,000.  Down payment and closing costs can be as low as $29,000. Monthly principal and interest would be $2,911. And that never changes for the life of your loan.

No contest you say. Renting saves me $511 every month. Well maybe for a year, two at the most because rents go up every year. And remember, your mortgage interest and taxes are deductions on your income tax so you may even save money even in the first year.

Here is the big BUT to  that argument. If you own you begin to build equity right away.  Assuming the long term average of 3.5% value increase per year, after 10 years, your value has increased to about $506,000; after 20 years to about $714,000 and after 30 years to about $1,008,000. And that doesn’t even count the payoff of your mortgage.

If you rent all that time, you will just have a stack of mortgage receipts, or more likely a computer file showing that you paid.

To emphasize, in addition to shielding you from rising rents and being more affordable when you need more space, owning your home also allows you to start building your own equity, which in turn grows your net worth quickly and by a lot.

And, to repeat a bit, because it is important. As home values typically rise over time and you pay off your mortgage, you build equity. That equity can set you up for success later on because you can use it to help fuel a move to an even bigger space down the line. That’s why, according to Zonda, the top reason millennial homeowners bought their home over the past year was to build their own equity instead of someone else’s.

SUGGESTED NEXT STEPS FOR YOU TO MAKE SURE YOU HAVE THE INFORMATION YOU NEED TO MAKE THE RIGHT DECISION

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move.
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • If you’re trying to decide whether to buy a home or continue renting, let’s connect to explore your options. With rents rising, it probably makes more sense to pursue your dream of homeownership.
  • If you would like to listen to our 13 minute podcast on this topic, please click on the below hyperlink: https://bit.ly/Buying_Makes_More_Sense_Than_Renting

WEST CHESTER, PA: WHY BUYING A HOME PROBABLY MAKES MORE SENSE THAN RENTING TODAY

West Chester, PA: Why Buying a Home Probably Makes More Sense Than Renting Today

Wondering if you should continue renting or if you should buy a home this year? If so, consider this. Rental affordability is still a challenge and has been for years. That’s because, historically, rents trend up over time. Data from the Census shows rents have been climbing pretty steadily since 1988.

And, data from the latest rental report from Realtor.com shows rents continue to grow today, even though it’s at a slower pace than we saw at the height of the pandemic:

“In March 2023, the U.S. rental market experienced single-digit growth for the eighth month in a row . . . The median asking rent was $1,732, up by $15 from last month and down by $32 from the peak but is still $354 (25.7%) higher than the same time in 2019 (pre-pandemic).”

With rents much higher now than they were in more normal, pre-pandemic years, owning your home may be a better option, especially if the long-term trend of rents increasing each year continues. In contrast, homeowners with a fixed-rate mortgage can lock in a monthly mortgage payment for the duration of their loan (typically 15-30 years).

Owning a Home Could Be More Affordable if You Need More Space

The graph below uses national data on the median rental payment from Realtor.com and median mortgage payment from the National Association of Realtors (NAR) to compare the two options. As the graph shows, depending on how much space you need, it’s typically more affordable to own than to rent if you need two or more bedrooms:

So, if you’re looking to live somewhere where you have two or more bedrooms to accommodate your household, give you more breathing room to spread out your belongings, or dedicate the extra space to practice your hobbies, it might make sense to consider homeownership.

HOW DOES THIS SHAKE OUT FOR WEST CHESTER BECAUSE, LIKE POLITICS, ALL REAL ESTATE IS LOCAL . WE HAVE TO CONSIDER THAT Home ownership Allows You To Start Building Equity

Let’s compare the relative costs and benefits of renting a 2 bedroom dwelling in West Chester with buying the median priced 2 bedroom detached house. Median rent in West Chester is about $2,300. Median price for a 2 bedroom detached house is about $335,000. Down payment and closing costs can be as low as $25,000. Monthly principal and interest would be $2,541. And that never changes for the life of your loan.

No contest you say. Renting saves me $241 every month. Well maybe for a year, two at the most because rents go up every year. And remember, your mortgage interest and taxes are deductions on your income tax so you may even save money even in the first year.

Here is the big BUT to  that argument. If you own you begin to build equity right away.  Assuming the long term average of 3.5% value increase per year, after 10 years, your value has increased to about $473,00; after 20 years to about $667,000 and after 30 years to about $940,000. And that doesn’t even count the payoff of your mortgage.

If you rent all that time, you will just have a stack of mortgage receipts, or more likely a computer file showing that you paid.

To emphasize, in addition to shielding you from rising rents and being more affordable when you need more space, owning your home also allows you to start building your own equity, which in turn grows your net worth quickly and by a lot.

And, to repeat a bit, because it is important. As home values typically rise over time and you pay off your mortgage, you build equity. That equity can set you up for success later on because you can use it to help fuel a move to an even bigger space down the line. That’s why, according to Zonda, the top reason millennial homeowners bought their home over the past year was to build their own equity instead of someone else’s.

SUGGESTED NEXT STEPS FOR YOU TO MAKE SURE YOU HAVE THE INFORMATION YOU NEED TO MAKE THE RIGHT DECISION

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move.
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • If you’re trying to decide whether to buy a home or continue renting, let’s connect to explore your options. With rents rising, it probably makes more sense to pursue your dream of homeownership.
  • If you would like to listen to our 13 minute podcast on this topic, please click on the below hyperlink: https://bit.ly/Buying_Makes_More_Sense_Than_Renting

DELAWARE COUNTY, WHAT’S AHEAD FOR HOME PRICES IN 2023?

DELAWARE COUNTY, What’s Ahead for Home Prices in 2023?

Over the past year, home prices have been a widely debated topic. Some have said we’ll see a massive drop in prices and that this could be a repeat of 2008 – which hasn’t happened. Others have forecasted a real estate market that could see slight appreciation or depreciation depending on the area of the country. And as we get closer to the spring real estate market, experts are continuing to forecast what they believe will happen with home prices this year and beyond.

Selma Hepp, Chief Economist at CoreLogic, says:

“While 2023 kicked off on a more optimistic note for the U.S. housing market, recent mortgage rate volatility highlights how much uncertainty remains. Nevertheless, the continued shortage of for-sale homes is likely to keep price declines modest, which are projected to top out at 3% peak to trough.”

Additionally, every quarter, Pulsenomics surveys a panel of over 100 economists, investment strategists, and housing market analysts regarding their five-year expectations for future home prices in the United States. Here’s what they said most recently:

So, given this information and what experts are saying about home prices, the question you might be asking is: should I buy a home this spring? Here are three reasons you should consider making a move:

  1. Buying a home helps you escape the cycle of rising rents. Over the past several decades, the median price of rent has risen consistently. The bottom line is, rent is going up.
  2. Homeownership is a hedge against inflation. A key advantage of homeownership is that it’s one of the best hedges against inflation. When you buy a home with a fixed-rate mortgage, you secure your housing payment, so it won’t go up like it would if you rent.
  3. Homeownership is a powerful wealth-building tool. The average net worth of a homeowner is $255,000 compared to $6,300 for a renter.

Experts are projecting slight price depreciation in the national housing market this year, followed by steady appreciation. Given that, you may be wondering if you should move ahead with buying a home this spring. The decision to purchase a home is best made when you do it knowing all the facts and have an expert on your side.

Here are my thoughts on whether or not the time is right for a first time home buyer or for a move seller who wants to move into an upgraded house.

For Delaware county, my  recommendation is a RESOUNDING YES, for both questions. And here is why.

Single family home prices are still rising. Just take a look at the below chart.

DELAWARE COUNTY, MEDIAN SALES PRICE, SINGLE FAMILY DETACHED
Month Sale Price Sale Price Difference Diff % Sale Price Difference Diff %
Median, 2021 Median, 2022 Median, 2023
Jan $359,000 $360,000 $1,000 0.3% $375,000 $15,000 4.2%
Feb $335,450 $376,000 $40,550 12.1% $390,000 $14,000 3.7%
Mar $369,500 $403,500 $34,000 9.2% $394,500 ($9,000) -2.2%
Apr $400,000 $415,000 $15,000 3.8%
May $400,000 $427,000 $27,000 6.8%
Jun $410,000 $451,500 $41,500 10.1%
Jul $425,000 $420,000 ($5,000) -1.2%
Aug $415,000 $430,000 $15,000 3.6%
Sep $385,000 $385,000 $0 0.0%
Oct $400,000 $390,000 ($10,000) -2.5%
Nov $384,900 $410,000 $25,100 6.5%
Dec $380,000 $420,000 $40,000 10.5%
Annual $388,654 $407,333 $18,679 4.8%
Year over Year, Median Price Up in 10 of 12 Months in 2022; Up 4.8 % for the year.
Trend cotinues into 2023, 2 of 3 months, YTD

Median sales price was up in 10 of 12 months from 2021 to 2022.  Trend went  negative for one month in 2023, but Year to Date is still positive. This tells me that we still have a powerful upward trend in prices. Here is more date to back that up.

National Association of Realtors data going back decades tells us that when we have less than 6 months of inventory, that means we have more buyers than sellers. What always happens when demandis higher than supply.  Prices go up.

DELAWARE COUNTY, MONTHS OF INVENTORY, SINGLE FAMILY, DETACHED
Month 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Jan 11 9 9 6 7 7 5 3 3 4
Feb 14 11 10 9 8 7 7 5 4 3
Mar 11 10 10 7 6 7 5 4 3 2
Apr 10 9 8 7 5 5 5 4 3
May 8 8 6 5 5 4 6 4 3
Dec 6 6 4 4 3 3 6 3 3
Jul 7 6 5 5 4 4 3 3 3
Aug 7 7 5 4 4 4 3 3 2
Sep 9 8 6 6 6 5 3 4 3
Oct 9 7 7 6 5 6 3 3 3
Nov 8 10 6 5 5 6 3 3 3
Dec 7 6 5 4 4 4 3 2 2
Annual 8.9 8.1 6.8 5.7 5.2 5.2 4.3 3.4 2.9 3.0

 

After the federal government induced market collapse of 2008, it took until July of 2020 for inventory to get below 6 months and stay there.  As would have been predicted, that is when sales price increases really accelerated as shown in the below chart

DELAWARE COUNTY, MEDIAN SALES PRICE, SINGLE FAMILY, DETACHED
Primary Year Sale Price, Median Difference % Diff
2014 $275,000
2015 $270,000 ($5,000) -1.8%
2016 $280,500 $10,500 3.9%
2017 $297,750 $17,250 6.1%
2018 $305,000 $7,250 2.4%
2019 $320,000 $15,000 4.9%
2020 $350,000 $30,000 9.4%
2021 $390,000 $40,000 11.4%
2022 $410,000 $20,000 5.1%
Average % Increase Starting 2016 6.6%

 

Price increases of 5 to 11% are too high to be sustainable long term. But given the low inventories in our area, I see little chance for any signiificant price decreases in the foreseeable future.

IMPLICATIONS FOR BUYERS AND SELLERS TODAY

  • Is it a good time for first time buyer to get in the market? Yes. There will never be a better time to get that first house and begin to build your family’s net worth.
  • Is it a good time for move up buyers to sell and get into that bigger better house they have been wanting.  Again, yes. They will be able to sell for a price they can be happy with.
  • With so few homes available for sale today, it’s important to work with a trusted real estate agent who understands your local area and can navigate the current market volatility.  Finding a home you really want to move to can be a bit more difficult today and you need the advice of an experienced and capable agent to make sure that it works for you.

SUGGESTED NEXT STEPS FOR YOU TO MAKE SURE YOU HAVE THE INFORMATION YOU NEED TO MAKE THE RIGHT DECISION

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move this spring.
  • Do I think that now is a good time to sell and make that move up buy?  Again,  absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.f
  • If you would like to hear more about this topic, please click on https://bit.ly/What_Is_Ahead_For_Home_Prices_In_2023 to hear our 12 minute podcast.

CHESTER COUNTY, WHAT’S AHEAD FOR HOME PRICES IN 2023?

CHESTER COUNTY, What’s Ahead for Home Prices in 2023?

Over the past year, home prices have been a widely debated topic. Some have said we’ll see a massive drop in prices and that this could be a repeat of 2008 – which hasn’t happened. Others have forecasted a real estate market that could see slight appreciation or depreciation depending on the area of the country. And as we get closer to the spring real estate market, experts are continuing to forecast what they believe will happen with home prices this year and beyond.

Selma Hepp, Chief Economist at CoreLogic, says:

“While 2023 kicked off on a more optimistic note for the U.S. housing market, recent mortgage rate volatility highlights how much uncertainty remains. Nevertheless, the continued shortage of for-sale homes is likely to keep price declines modest, which are projected to top out at 3% peak to trough.”

Additionally, every quarter, Pulsenomics surveys a panel of over 100 economists, investment strategists, and housing market analysts regarding their five-year expectations for future home prices in the United States. Here’s what they said most recently:

So, given this information and what experts are saying about home prices, the question you might be asking is: should I buy a home this spring? Here are three reasons you should consider making a move:

  1. Buying a home helps you escape the cycle of rising rents. Over the past several decades, the median price of rent has risen consistently. The bottom line is, rent is going up.
  2. Homeownership is a hedge against inflation. A key advantage of homeownership is that it’s one of the best hedges against inflation. When you buy a home with a fixed-rate mortgage, you secure your housing payment, so it won’t go up like it would if you rent.
  3. Homeownership is a powerful wealth-building tool. The average net worth of a homeowner is $255,000 compared to $6,300 for a renter.

Experts are projecting slight price depreciation in the national housing market this year, followed by steady appreciation. Given that, you may be wondering if you should move ahead with buying a home this spring. The decision to purchase a home is best made when you do it knowing all the facts and have an expert on your side.

Here are my thoughts on whether or not the time is right for a first time home buyer or for a move seller who wants to move into an upgraded house.

For Chester county, my  recommendation is a RESOUNDING YES, for both questions. And here is why.

Single family home prices are still rising. Just take a look at the below chart.

CHESTER COUNTY, MEDIAN SALES PRICE BY MONTH, 2021 THRU MARCH 2023
Month Sale Price Sale Price Difference Diff % Sale Price Difference Diff %
Median 2021 Median 2022 Median 2023
Jan $452,500 $484,900 $32,400 7.2% $527,500 $42,600 8.8%
Feb $441,700 $510,000 $68,300 15.5% $507,500 ($2,500) -0.5%
Mar $495,000 $525,000 $30,000 6.1% $520,000 ($5,000) -1.0%
Apr $481,250 $545,000 $63,750 13.2%
May $512,021 $531,055 $19,034 3.7%
Jun $515,000 $600,000 $85,000 16.5%
Jul $531,000 $575,000 $44,000 8.3%
Aug $498,000 $550,000 $52,000 10.4%
Sep $479,900 $540,000 $60,100 12.5%
Oct $494,075 $549,500 $55,425 11.2%
Nov $499,000 $545,000 $46,000 9.2%
Dec $508,961 $500,000 ($8,961) -1.8%
Annual or YTD $452,500 $484,900 $32,400 7.2%
Year over Year, Monthly Median Price up in 11 of 12 months
Annual Average up by 7.2%
Trend mixed in 2023; down in 2 of 3 months YTD; YTD is still positive.

Median sales price was up in 11 of 12 months from 2021 to 2022.  Trend turned modestly negative in 2023, but Year to Date is still positive. This tells me that we still have a powerful upward trend in prices. Here is more date to back that up.

National Association of Realtors data going back decades tells us that when we have less than 6 months of inventory, that means we have more buyers than sellers. What always happens when demandis higher than supply.  Prices go up.

MONTHS OF INVENTORY, CHESTER COUNTY, SINGLE FAMILY, DETACHED.
Month 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Jan 11 10 9 8 7 9 8 5 4 4
Feb 14 12 12 12 10 10 10 6 6 5
Mar 11 9 10 8 7 6 7 5 4 3
Apr 11 10 9 8 7 8 7 5 4
May 9 9 8 6 6 6 10 5 4
Jun 6 6 5 5 4 5 8 3 3
Jul 7 5 6 6 5 5 5 4 3
Aug 6 6 5 5 5 5 3 3 3
Sep 9 7 7 6 6 7 4 4 3
Oct 8 8 7 7 6 7 4 4 4
Nov 9 8 6 6 5 7 4 4 4
Dec 6 7 6 5 6 6 3 3 3
Annual 8.9 8.1 7.5 6.8 6.2 6.8 6.1 4.3 3.8 4.0

After the federal government induced market collapse of 2008, it took until July of 2020 for inventory to get below 6 months and stay there.  As would have been predicted, that is when sales price increases really accelerated as shown in the below chart

CHESTER COUNTY, MEDIAN SALES PRICE, SINGLE FAMILY DETACHED
Primary Year Sale Price Difference % Diff
2014 $350,875
2015 $360,125 $9,250 2.6%
2016 $363,000 $2,875 0.8%
2017 $380,000 $17,000 4.7%
2018 $399,000 $19,000 5.0%
2019 $405,000 $6,000 1.5%
2020 $440,000 $35,000 8.6%
2021 $499,000 $59,000 13.4%
2022 $540,000 $41,000 8.2%

 

Price increases of 8 to 13% are too high to be sustainable long term. But given the low inventories in our area, I see little chance for any signiificant price decreases in the foreseeable future.

IMPLICATIONS FOR BUYERS AND SELLERS TODAY

  • Is it a good time for first time buyer to get in the market? Yes. There will never be a better time to get that first house and begin to build your family’s net worth.
  • Is it a good time for move up buyers to sell and get into that bigger better house they have been wanting.  Again, yes. They will be able to sell for a price they can be happy with.
  • With so few homes available for sale today, it’s important to work with a trusted real estate agent who understands your local area and can navigate the current market volatility.  Finding a home you really want to move to can be a bit more difficult today and you need the advice of an experienced and capable agent to make sure that it works for you.

SUGGESTED NEXT STEPS FOR YOU TO MAKE SURE YOU HAVE THE INFORMATION YOU NEED TO MAKE THE RIGHT DECISION

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move this spring.
  • Do I think that now is a good time to sell and make that move up buy?  Again,  absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • If you would like to hear more about this topic, please click on https://bit.ly/What_Is_Ahead_For_Home_Prices_In_2023 to hear our 12 minute podcast.

CHESTER COUNTY, ARE HOME PRICES GOING TO CRASH?

CHESTER COUNTY, ARE HOME PRICES GOING TO CRASH?

The short answer is NO!!!!! And here are the reasons and he recent history to back up that statement

There have been a lot of shifts in the housing market recently. Mortgage rates rose dramatically last year, impacting many people’s ability to buy a home. And after several years of rapid price appreciation, home prices finally peaked last summer. These changes led to a rise in headlines saying prices would end up crashing.

Even though we’re no longer seeing the buyer frenzy that drove home values up during the pandemic, prices have been relatively flat at the national level. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), doesn’t expect that to change:

“[H]ome prices will be steady in most parts of the country with a minor change in the national median home price.”

You might think sellers would have to lower prices to attract buyers in today’s market, and that’s part of why some may have been waiting for prices to come crashing down. But there’s another factor at play – low inventory. And according to Yun, that’s limiting just how low prices will go:

“We simply don’t have enough inventory. Will some markets see a price decline? Yes. [But] with the supply not being there, the repeat of a 30 percent price decline is highly, highly unlikely.”

As you can see in the graph below, we’ve been at or near record-low inventory levels for a few years now.

Please note that in the bad old days when we were coming out of the Federal Government caused housing price collapse, we were at 9+ months of inventory. In fact, I recall that back in the real bad old days we got as high as 18 months in Chester county.

That lack of available homes on the market is putting upward pressure on prices. Bankrate puts it like this:

“This ongoing lack of inventory explains why many buyers still have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won’t allow a price crash in the near future.”

If more homes don’t come to the market, a lack of supply will keep prices from crashing, and, according to industry expert Rick Sharga, inventory isn’t likely to rise significantly this year:

“I believe that we’re likely to see low inventory continue to vex the housing market throughout 2023.”

Here is the recent history for Chester county.

MONTHS OF INVENTORY, CHESTER COUNTY, SINGLE FAMILY, DETACHED.
Month 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Jan 11 10 9 8 7 9 8 5 4 4
Feb 14 12 12 12 10 10 10 6 6 5
Mar 11 9 10 8 7 6 7 5 4 3
Apr 11 10 9 8 7 8 7 5 4
May 9 9 8 6 6 6 10 5 4
Jun 6 6 5 5 4 5 8 3 3
Jul 7 5 6 6 5 5 5 4 3
Aug 6 6 5 5 5 5 3 3 3
Sep 9 7 7 6 6 7 4 4 3
Oct 8 8 7 7 6 7 4 4 4
Nov 9 8 6 6 5 7 4 4 4
Dec 6 7 6 5 6 6 3 3 3
Annual 8.9 8.1 7.5 6.8 6.2 6.8 6.1 4.3 3.8 4.0

 

Back in 2014, we had 14+ months of inventory. It took until July of 2020 for inventory to reach and stay below 6 months, which. is the dividing line between a buyer or balanced market and a sellers market. Sellers market being one in which we have more buyers than sellers (more demand than supply) which pushes prices up.

Even with the recent mortgage rate shocks, inventory levels are staying in the 3-5 month range. That is still strong seller market territory. Prices have responded like you would expect, as shown in the  below chart.

CHESTER COUNTY, MEDIAN SALES PRICE, SINGLE FAMILY DETACHED
Primary Year Sale Price Difference % Diff
2014 $350,875
2015 $360,125 $9,250 2.6%
2016 $363,000 $2,875 0.8%
2017 $380,000 $17,000 4.7%
2018 $399,000 $19,000 5.0%
2019 $405,000 $6,000 1.5%
2020 $440,000 $35,000 8.6%
2021 $499,000 $59,000 13.4%
2022 $540,000 $41,000 8.2%

 

Since we got under 6 months of inventory in 2020, price increases have only accelerated. 8%+ is too high to be long term sustainable but I see no signs of a significant price decline coming our way.

Sellers are under no pressure to move since they have plenty of equity right now. That equity acts as a cushion for homeowners, lowering the chances of distressed sales like foreclosures and short sales. And with many homeowners locked into low mortgage rates, that equity cushion isn’t going anywhere soon.

IMPLICATIONS FOR BUYERS AND SELLERS TODAY

  • Is it a good time for first time buyer to get in the market? Yes. There will never be a better time to get that first house and begin to build your family’s net worth.
  • Is it a good time for move up buyers to sell and get into that bigger better house they have been wanting.  Again, yes. They will be able to sell for a price they can be happy with.
  • With so few homes available for sale today, it’s important to work with a trusted real estate agent who understands your local area and can navigate the current market volatility.  Finding a home you really want to move to can be a bit more difficult today and you need the advice of an experienced and capable agent to make sure that it works for you.

SUGGESTED NEXT STEPS FOR YOU TO MAKE SURE YOU HAVE THE INFORMATION YOU NEED TO MAKE THE RIGHT DECISION

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move this spring.
  • Do I think that now is a good time to sell and make that move up buy?  Again,  absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.

CHESTER COUNTY, USE YOUR EQUITY WHEN YOU SELL YOUR HOUSE

CHESTER COUNTY, USE YOUR EQUITY WHEN YOU SELL YOUR HOUSE

One of the benefits of being a homeowner is that you build equity over time. By selling your house, that equity can be used toward purchasing your next home. But before you can put it to use, you should understand exactly what equity is and how it grows. Bankrate explains it like this:

“Home equity is the portion of your home you’ve paid off – in other words, your stake in the property as opposed to the lender’s. In practical terms, home equity is the appraised value of your home minus any outstanding mortgage and loan balances.”

Majority of Americans Have a Large Amount of Equity

If you’ve owned your home for a while, you’ve likely built up some equity – and you may not even realize how much. Based on data from the U.S. Census Bureau and ATTOM, the majority of Americans have a substantial amount of equity right now (see graph below):

And having such large amounts of equity is a benefit to homeowners in more ways than one. Rick Sharga, Executive Vice President of Market Intelligence at ATTOM, explains:

“Record levels of home equity provide security for millions of families, and minimize the chance of another housing market crash like the one we saw in 2008.”

Over time, your home equity grows. In addition to providing financial stability while you own your house, when you’re ready to sell it, that money could go a long way toward paying for your next home.

HOW DOES THIS APPLY TO CHESTER COUNTY?

Check out the chart below, If you had purchased the average priced single family home in Chester county for $380,000 in 2017, by the end of 2022 you would have an estimated $236,663 in equity. Stated differently, you own 62% of the house. Your lender only owns 38%. If you are in the market for a move up buy, you can use this equity to finance the purchase and improve your family’s standard of living even more.

CHESTER COUNTY, ESTIMATED EQUITY GROWTH, LAST FIVE YEARS
Purchase Sale Price Down Payment Price Growth Estimated Total Equity Equity, %
Year Median Equity at 3.5% Equity to 12/22 Pay Down of Value
2017 $380,000 $13,300 $160,000 $63,333 $236,633 62%
2018 $399,000 $13,965 $141,000 $53,200 $208,165 52%
2019 $405,000 $14,175 $135,000 $40,500 $189,675 47%
2020 $440,000 $15,400 $100,000 $29,333 $144,733 33%
2021 $499,000 $17,465 $41,000 $16,633 $75,098 15%
2022 $540,000 $18,900 $0 $0 $18,900 4%

Naturally if you owned your home for less than those five years, your equity would be less. But even after only one year, you would have equity of $75,098. You could do a lot with that.

SUGGESTED NEXT STEPS FOR YOU TO MAKE SURE YOU HAVE THE INFORMATION YOU NEED TO MAKE THE RIGHT DECISION

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move this spring.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say. 
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • If you would like to listen to our recent 14 minute podcast on this topic, please click on https://bit.ly/Leverage_Your_Equity_When_You_Sell_Your_House