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John HerreidJohn Herreid

Media, PA Homes for Sale and Media, PA Real Estate

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HOW INFLATION AFFECTS HOME MORTGAGE RATES

HOW INFLATION AFFECTS  Real Estate Mortgage Rates

Inflation is a term that refers to the general increase in prices and fall in the purchasing value of money. It impacts various sectors of the economy, including the real estate market. Particularly, inflation has a significant effect on mortgage rates, a factor that potential homeowners need to consider carefully.

Mortgage rates are the interest rates applied to a loan secured by real estate. They are determined by a variety of factors such as the inflation rate, economic growth indicators, and the monetary policies of the Federal Reserve. Understanding the relationship between inflation and mortgage rates is crucial, as it can impact one’s decision on when to buy a home or refinance a mortgage.

Historically, higher inflation tends to result in higher mortgage rates. The reason is simple: Lenders need to maintain a positive real rate of return. If the inflation rate is 3%, for instance, and the lender charges a mortgage rate of 4%, then their real rate of return is approximately 1%.

When inflation rises, lenders increase mortgage rates to compensate for the loss in purchasing power of the money they will be repaid in the future. Hence, a surge in inflation can lead to a rise in mortgage rates, increasing the cost of buying a home or refinancing an existing mortgage. On the flip side, periods of low inflation often coincide with lower mortgage rates, which can make home buying more affordable.

However, it’s important to remember that while inflation is a key driver, it’s not the only factor that influences mortgage rates. Other factors, like changes in economic growth or Federal Reserve policy, can also cause mortgage rates to fluctuate.

In conclusion, inflation has a profound impact on the real estate market, especially on real estate mortgage rates. As potential homeowners, understanding this relationship can help in making more informed decisions about when to enter the market. To navigate through these economic shifts, one must stay informed about recent inflation trends and consult with a trusted financial advisor.

Mortgage rates are up a lot.

HERE IS WHAT YOU NEED TO DO TO MAKE THE RIGHT DECISION FOR YOU

  • Buyers: If you’ve been holding off on buying because you were worried the value of your home would go down, knowing home prices are stable and increasing is reasuring. It also gives you the opportunity to own something that usually becomes more valuable as time goes on.
  • Sellers: If you’ve been waiting to sell your house because you were concerned about how changing home prices would affect its value, this should also reassure you. Even with the recent increase in mortgage rates, teaming with a real estate agent and getting your house on the market is the logical and smartest thing to do.
  • 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 be wrong.
  • Let’s connect so you have an expert on your side to help you keep everything in proper perspective.

Posted in: Build Wealth, Forecast for 2023, Get Richer Quicker, Net Worth

HOME PRICES IN THE MEDIA, RADNOR, GARNET VALLEY AREAS DID NOT COLLAPSE!!!

When I was in the corporate world we had a definition of “Expert”.  That is somebody who is wearing a suit and is more than 25 miles from home. Not all “Experts” deserve that sarcasm, but the ones who predicted an upcoming housing price collapse sure do.

First of all the below chart shows what happend to house prices in the West Chester Area.

WALLINGFORD SWARTHMORE, ROSE TREE MEDIA, RADNOR, MARPLE NEWTOWN
GARNET VALLEY, SPRINGFIELD MEDIAN SALES PRICES 2021 THRU MAY 2023
Month Sale Price Sale Price Year over Year Sale Price Year over Year
2021 2022 Difference 2023 Difference
% %
Jan $500,000 $552,500 10.5% $616,376 11.6%
Feb $500,000 $500,000 0.0% $733,500 46.7%
Mar $575,000 $552,500 -3.9% $550,000 -0.5%
Apr $526,000 $527,500 0.3% $540,000 2.4%
May $563,500 $621,000 10.2% $600,000 -3.4%
Jun $582,500 $585,000 0.4%
Jul $589,450 $587,500 -0.3%
Aug $552,500 $671,900 21.6%
Sep $536,500 $607,500 13.2%
Oct $537,500 $570,000 6.0%
Nov $531,000 $623,000 17.3%
Dec $500,000 $510,000 2.0%
Annual $541,163 $575,700 6.4%
YTD, May $550,700 $607,975 10.4%

In 2022, prices were up a hefty 6.4% % from 2021. During the first 5 months of 2023 when the “crash” was predicted, that trend continued with a 10.4% rise from 2022.

One variable that has gone down a lot in the number of sales.  Please see the below chart:

WALLINGFORD SWARTHMORE, RADNOR, ROSE TREE MEDIA, MARPLE NEWTOWN,
SPRINGFIELD, GARNET VALLEY, NUMBER OF SALES 2021 THROUGH MAY 2021
Month Sales Sales Sales
2021 2022 2023
Jan 121 114 58
Feb 81 91 54
Mar 122 127 89
Apr 141 132 91
May 144 139 131
Jun 232 193
Jul 196 156
Aug 180 166
Sep 149 110
Oct 156 88
Nov 146 110
Dec 146 97
Annual 1814 1523
%^ Diff -16.0%
YTD, May 609 603 423
% Diff -29.9%
Sales were basically level in 2022; but then went down by almost 30% in the first 5 months of 2023 compared to the first five months of 2021.

THAT IS HUGE!!!

But prices are still going up because buyer demand is high and there are fewer houses for sale. Higher demand and lowered supply always results in higher prices.

NOW WHAT DID THE EXPERTS PREDICT JUST A FEW MONTHS AGO?

During the fourth quarter of last year, many housing experts predicted home prices were going to crash this year. Here are a few of those forecasts:

Jeremy Siegel, Russell E. Palmer Professor Emeritus of Finance at the Wharton School of Business:

“I expect housing prices fall 10% to 15%, and the housing prices are accelerating on the downside.”

Mark Zandi, Chief Economist at Moody’s Analytics:

“Buckle in. Assuming rates remain near their current 6.5% and the economy skirts recession, then national house prices will fall almost 10% peak-to-trough. Most of those declines will happen sooner rather than later. And house prices will fall 20% if there is a typical recession.”

Goldman Sachs:

“Housing is already cooling in the U.S., according to July data that was reported last week. As interest rates climb steadily higher, Goldman Sachs Research’s G-10 home price model suggests home prices will decline by around 5% to 10% from the peak in the U.S. . . . Economists at Goldman Sachs Research say there are risks that housing markets could decline more than their model suggests.”

THE BAD NEWS: IT RATTLED CONSUMER CONFIDENCE

These forecasts put doubt in the minds of many consumers about the strength of the residential real estate market. Evidence of this can be seen in the December Consumer Confidence Survey from Fannie Mae. It showed a larger percentage of Americans believed home prices would fall over the next 12 months than in any other December in the history of the survey (see graph below). That caused people to hesitate about their homebuying or selling plans as we entered the new year.

THE GOOD NEWS: HOME PRICES NEVER CRASHED

However, home prices didn’t come crashing down and seem to be already rebounding from the minimal depreciation experienced over the last several months.

In a report just released, Goldman Sachs explained:

“The global housing market seems to be stabilizing faster than expected despite months of rising mortgage rates, according to Goldman Sachs Research. House prices are defying expectations and are rising in major economies such as the U.S.,. . . ”

Those claims from Goldman Sachs were verified by the release last week of two indexes on home prices: Case-Shiller and the FHFA. Here are the numbers each reported:

Home values seem to have turned the corner and are headed back up.

One of the lessons here is that all real estate is local and to understand the market you really should consult a local expert rather than a national onel

BOTTOM LINE

When the forecasts of significant home price depreciation were made last fall, they were made with megaphones. Mass media outlets, industry newspapers, and podcasts all broadcasted the news of an eminent crash in prices.

Now, forecasters are saying the worst is over and it wasn’t anywhere near as bad as they originally projected. However, they are whispering the news instead of using megaphones. As real estate professionals, it is our responsibility – some may say duty – to correct this narrative in the minds of the American consumer.

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.

Posted in: Build Wealth, Forecast for 2023, Get Richer Quicker, Home Prices, Move Up Buyers, Sellers

HOME PRICES IN WEST CHESTER AREA DID NOT CRASH!!!

When I was in the corporate world we had a definition of “Expert”.  That is somebody who is wearing a suit and is more than 25 miles from home. Not all “Experts” deserve that sarcasm, but the ones who predicted an upcoming housing price collapse sure do.

First of all the below chart shows what happend to house prices in the West Chester Area.

WEST CHESTER, DOWNINGTOWN, GREAT VALLEY, MEDIAN SALE PRICES
Month Sale Price Sale Price Year Over Year Sale Price Year Over Year
2021 2022 Difference 2023 Difference
(%) (%)
Jan $525,000 $570,000 8.6% $636,500 11.7%
Feb $577,000 $554,000 -4.0% $622,500 12.4%
Mar $563,075 $640,000 13.7% $683,000 6.7%
Apr $570,000 $681,200 19.5% $662,500 -2.7%
May $600,000 $664,500 10.8% $712,500 7.2%
Jun $584,391 $695,000 18.9%
Jul $650,000 $675,000 3.8%
Aug $612,500 $650,600 6.2%
Sep $575,000 $637,401 10.9%
Oct $585,000 $605,000 3.4%
Nov $551,250 $601,384 9.1%
Dec $610,000 $600,000 -1.6%
Annual $583,601 $631,174 8.2%
YTD, thru May $621,940 $663,400 6.7%

 

In 2022, prices were up a hefty 8.2 % from 2021. During the first 5 months of 2023 when the “crash” was predicted, that trend continued with a 6.7% rise from 2022.

One variable that has gone to pieces in the number of sales.  Please see the below chart:

WEST CHESTER, DOWNINGTOWN, GREAT VALLEY, NUMBER OF SALES
Month Sales Sales Sales
2021 2022 2023
Jan 102 99 60
Feb 104 70 44
Mar 154 120 88
Apr 157 113 84
May 168 136 100
Jun 242 197
Jul 190 177
Aug 213 156
Sep 183 134
Oct 161 112
Nov 154 96
Dec 154 96
Annual 1982 1506
Annual Sales Drop -24.0%
Thru May 685 538 376
22 to 23 -21.5%
21 to23 -45.1%

Sales were down by 21.5% in 2022; and down by a whopping 45.1% in the first 5 months of 2023 compared to the first five months of 2021.

That is HUGE!!!

But prices are still going up because buyer demand is high and there are fewer houses for sale. Higher demand and lowered supply always results in higher prices.

NOW WHAT DID THE EXPERTS PREDICT JUST A FEW MONTHS AGO?

During the fourth quarter of last year, many housing experts predicted home prices were going to crash this year. Here are a few of those forecasts:

Jeremy Siegel, Russell E. Palmer Professor Emeritus of Finance at the Wharton School of Business:

“I expect housing prices fall 10% to 15%, and the housing prices are accelerating on the downside.”

Mark Zandi, Chief Economist at Moody’s Analytics:

“Buckle in. Assuming rates remain near their current 6.5% and the economy skirts recession, then national house prices will fall almost 10% peak-to-trough. Most of those declines will happen sooner rather than later. And house prices will fall 20% if there is a typical recession.”

Goldman Sachs:

“Housing is already cooling in the U.S., according to July data that was reported last week. As interest rates climb steadily higher, Goldman Sachs Research’s G-10 home price model suggests home prices will decline by around 5% to 10% from the peak in the U.S. . . . Economists at Goldman Sachs Research say there are risks that housing markets could decline more than their model suggests.”

The Bad News: It Rattled Consumer Confidence

These forecasts put doubt in the minds of many consumers about the strength of the residential real estate market. Evidence of this can be seen in the December Consumer Confidence Survey from Fannie Mae. It showed a larger percentage of Americans believed home prices would fall over the next 12 months than in any other December in the history of the survey (see graph below). That caused people to hesitate about their homebuying or selling plans as we entered the new year.

The Good News: Home Prices Never Crashed

However, home prices didn’t come crashing down and seem to be already rebounding from the minimal depreciation experienced over the last several months.

In a report just released, Goldman Sachs explained:

“The global housing market seems to be stabilizing faster than expected despite months of rising mortgage rates, according to Goldman Sachs Research. House prices are defying expectations and are rising in major economies such as the U.S.,. . . ”

Those claims from Goldman Sachs were verified by the release last week of two indexes on home prices: Case-Shiller and the FHFA. Here are the numbers each reported:

Home values seem to have turned the corner and are headed back up.

One of the lessons here is that all real estate is local and to understand the market you really should consult a local expert rather than a national onel

Bottom Line

When the forecasts of significant home price depreciation were made last fall, they were made with megaphones. Mass media outlets, industry newspapers, and podcasts all broadcasted the news of an eminent crash in prices.

Now, forecasters are saying the worst is over and it wasn’t anywhere near as bad as they originally projected. However, they are whispering the news instead of using megaphones. As real estate professionals, it is our responsibility – some may say duty – to correct this narrative in the minds of the American consumer.

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.

Posted in: Forecast for 2023, Get Richer Quicker, Home Prices, Move Up Buyers, Net Worth, Sellers

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

Posted in: Build Wealth, Buyers, First Time Buyers, Forecast for 2023, Get Richer Quicker, Home Equity, Home Prices, Net Worth, Sellers

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

Posted in: Build Wealth, Buyers, First Time Buyers, Forecast for 2023, Get Richer Quicker, Home Prices, Move Up Buyers, Net Worth

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

Posted in: Build Wealth, Buyers, First Time Buyers, Forecast for 2023, Move Up Buyers, Price Appreciation, Sellers

WESTCHESTER, PA: WHAT DO EXPERTS SAY ABOUT THE SPRING MARKET?

The housing market’s been going through a lot of change lately, and there’s been uncertainty surrounding what will happen this spring. You may be wondering if more homes will go on the market, what’s next with home prices and mortgage rates, or what the best advice is for someone in your position right now.

Here’s what industry experts are saying right now about the spring housing market and what it means for you:

Selma Hepp, Chief Economist, CoreLogic:

“We see more competition among buyers . . . Housing supply also tends to grow during the spring months. And this is also the time of year when relatively more migration happens, as people graduate and move elsewhere looking for jobs.”

Greg McBride, Chief Financial Analyst, Bankrate:

“I don’t expect big moves in prices in the span of a month, but like the flower buds of spring, the housing market is showing signs of improvement. A pick up in activity with inventory still low does bode well for home prices.”

Rick Sharga, Founder and CEO, CJ Patrick Company:

“If you can find a home you love and can afford at today’s prices, don’t wait. Home prices in most of the country are unlikely to crash, and mortgage rates will only come down very gradually if they decline at all this year.” 

Jeff Tucker, Senior Economist, Zillow:

“The market is still much friendlier this spring for buyers who can overcome affordability hurdles, but buyers are going to see more competition than they might expect because there are not many homes on the market to go around. New listings are increasing, which they almost always do this time of year, but not nearly as quickly as usual.”

WHAT ABOUT WEST CHESTER?

I agree that home prices are steady and/or moving up.  I see little or no chance of any significant price decline in the foreseeable future. Here is why. 

Below chart shows the sales price history for Westchester from January 2021 through April 2023. In 2022, year over year prices were up in 9 of the same12 months from 2021. This trend continues in 2023 in 2 of  the four months. Year to date, prices are up by a substantial 2.5%.

WESTCHESTER AREA SCHOOL DISTRICT, MEDIAN SALES PRICE, SINGLE FAMILY DETACHED
Month Sale Price Sale Price Difference Diff % Sale Price Difference Diff %
2021 2022 2023
Jan $529,950 $607,500 $77,550 14.6% $682,500 $75,000 12.3%
Feb $495,000 $618,500 $123,500 24.9% $650,000 $31,500 5.1%
Mar $553,450 $703,500 $150,050 27.1% $695,000 ($8,500) -1.2%
Apr $648,800 $685,000 $36,200 5.6% $652,500 ($32,500) -4.7%
May $641,800 $730,000 $88,200 13.7%
Jun $572,500 $738,750 $166,250 29.0%
Jul $685,000 $698,000 $13,000 1.9%
Aug $630,000 $625,000 ($5,000) -0.8%
Sep $600,000 $655,000 $55,000 9.2%
Oct $615,000 $610,000 ($5,000) -0.8%
Nov $630,000 $576,000 ($54,000) -8.6%
Dec $610,000 $635,000 $25,000 4.1%
Annual $600,958 $656,854 $55,896 9.3%
YTD thru 4/27 $653,625 $670,000 $16,375 2.5%
Year Over Year Price Up in 9 of 12 months in 2022
Year Over Year Price Up in 2 of 4 months in 2023
YTD up by 2.5% in 2023

I believe these trends will continue. Why you ask.? Well, median days on market for the last 3 months have been 5, 4 and 6 respectively.  That means that if you have a home for sale and it is properly marketed and priced, you can reasonably expect to have an acceptable agreement of sale in about a week. That tells me there are a lot of buyers out there ready and willing to buy.

Also, we are still short on inventory. Decades of statistics tell us that we need 6 months of inventory to have a “Balanced Market”. That is one where we have about equal numbers of buyers and sellers. Prices will still go up in this situation but about in tandem with the rate of inflation. Right now we have only 3 months of inventory, which means more buyers than sellers. What always happens when demand in higher than supply? Prices go up and that is what I expect to happen.

WHAT DOES THIS MEAN FOR BUYERS AND SELLERS TODAY? 

  • If you are a first time buyer, you can be quite sure that the value of your property will go up and you will have taken the best first step you can make to improve your family net worth.
  • For move up buyers with a home to sell, you can be quite sure that if your house is properly marketed and priced, you can expect an acceptable agreement of sale in about a week.
  • And you can also expect that the move up house you buy will continue to increase in value.

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 prefer to listen to our recent 12 minute podcast on this subject, please click here: https://bit.ly/Westchester_And_Media_Spring_Market

 

Posted in: Forecast for 2023, Get Richer Quicker, Home Prices, Price Appreciation, Sellers and Buyers

DELAWARE COUNTY, ARE LOWER HOME PRICES COMING?

DELAWARE COUNTY, ARE Lower Home Prices COMING?

As the housing market continues to change, you may be wondering where it’ll go from here. One factor you’re probably thinking about is home prices, which have come down a bit since they peaked last June. And you’ve likely heard something in the news or on social media about a price crash on the horizon. As a result, you may be holding off on buying a home until prices drop significantly. But that’s not the best strategy.

A recent survey from Zonda shows 53% of millennials are still renting right now because they’re waiting for home prices to come down. But here’s the thing: the most recent data shows that home prices appear to have bottomed out and are now on the rise again. Selma Hepp, Chief Economist at CoreLogic, reports:

“U.S. home prices rose by 0.8% in February . . . indicating that prices in most markets have already bottomed out.”

And the latest data from Black Knight shows the same shift. The graph below compares home price trends in November to those in February:

So, should you keep waiting to buy a home until prices come down? If you factor in what the experts are saying, you probably shouldn’t. The data shows prices are increasing in much of the country, not decreasing. And the latest data from the Home Price Expectation Survey indicates that experts project home prices will rise steadily and return to more normal levels of appreciation after 2023. The best way to understand what home values are doing in your area is to work with a local real estate professional who can give you the latest insights and expert advice.

ARE PRICES GOING TO GO UP OR DOWN IN DELAWARE COUNTY?

This is really one of the most central questions for buyers and sellers.

  • First time buyers want to know if prices are going to go lower right after they buy. If they are it would make sense to wait.
  • Move up buyers with a house to sell need to know if they can get a fair price for their present house and if their next house is going to be worth more or less in the next months and years.

My recommendation to both groups is to BUY NOW.  Here is why.

The below chart shows,  month by month,  year over year median sales price in Chesco.

The year over year median sales price was up in 10 of 12 months in 2022.  Up a very healthy 4.8% for the year. The trend continues in 3 of 4 months in 2023. YTD, through April 23 is up 3.1% in 2023

DELAWARE COUNTY, MEDIAN HOME PRICES, SINGLE FAMILY DETACHED, 2021 THROUGH APRIL 20, 2023
Month Sale Price, Median 2021 Sale Price, Median 2022 Sale Price, Median 2023
Jan $359,000 $360,000 $375,000
Feb $335,450 $376,000 $390,000
Mar $369,500 $403,500 $400,000
Apr $400,000 $415,000 $437,500
May $400,000 $427,000
Jun $410,000 $451,500
Jul $425,000 $420,000
Aug $415,000 $430,000
Sep $385,000 $385,000
Oct $400,000 $390,000
Nov $384,900 $410,000
Dec $380,000 $420,000
Annual $388,654 $407,333
Annual Difference $18,679
 % Difference 4.8%
YTD, thru 0420 $388,625 $400,625
Price Difference, YTD thru 4/20/23 $12,000
 % Difference 3.1%

 

I expect this to continue into the forseeable future. Why?  Because we still have very low inventory of houses for sale. To have a balanced market with about the same number of buyers and sellers we need 6 months of inventory. Right now we have only between 2 and 3 months. That says that we have more buyers than sellers. And what always happens when there is more demand than supply?  Prices go up. Stated differently, we are still in a very strong Sellers’ Market.

I expect prices to continue to increase in Delaware county. Stated differently, I see little chance that we will have any sigificant price decline in the forseeable future.

Bottom Line

If you’re waiting to buy a home until prices come down, you may want to reconsider. Let’s connect to make sure you understand what’s happening in our local housing market.

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.
  • And if you would like to listen to our 12 minute podcast on this topic, please click on https://bit.ly/Are_Lower_Home_Prices_Coming

Posted in: Forecast for 2023, Get Richer, Get Richer Quicker, Home Equity, Sellers and Buyers

CHESTER COUNTY, A BIG ADVANTAGE IF YOU SELL THIS SPRING

For potential home sellers in Chester County, there is a big advantage if you sell this Spring. Why?  The reasons are below.

Thinking about selling your house? If you’ve been waiting for the right time, it could be now while the supply of homes for sale is so low. HousingWire shares:

“. . . the big question is whether we are finally starting to see the seasonal spring increase in inventory. The answer is no, because active listings fell to a new low last week for 2023 . . .”

The National Association of Realtors (NAR) confirms today’s housing inventory is low by looking at the months’ supply of homes on the market. In a balanced market, about a six-month supply is needed. Anything lower is a sellers’ market. And today, the number is much lower:

“Total housing inventory registered at the end of February was 980,000 units, identical to January and up 15.3% from one year ago (850,000). Unsold inventory sits at a 2.6-month supply at the current sales pace, down 10.3% from January but up from 1.7 months in February 2022.”

IF YOU ARE A MOVE UP BUYER, WHY IS THIS A GOOD TIME TO SELL? 

For a move up buyer family, there are three conditions that need to be met for this to be a good time for you to sell.

  • We will be able to find a house that we really want to move into.
  • We will get a price with which we are happy.
  • Our next house will probably continue to go up in value after we buy.

With respect to , will we be able to find a house that we really want to move into, especially with the low inventories? The below chart summarizes where we are with the inventory of single family homes in Chester county.

MONTHS OF RESIDENTIAL SINGLE FAMILY
INVENTORY, CHESCO, 2020 THRU MARCH 2023
Month 2020 2021 2022 2023
Jan 8 5 4 4
Feb 10 6 6 5
Mar 7 5 4 3
Apr 7 5 4
May 10 5 4
Jun 8 3 3
Jul 5 4 3
Aug 3 3 3
Sep 4 4 3
Oct 4 4 4
Nov 4 4 4
Dec 3 3 3
Annual 6.1 4.3 3.8 4.0
Strong Seller Market Inventory

 

If we had a balanced market of about 6 months inventory, it would normally take 30-45 days to find a house you really like. With inventory at half of that, it could take a lot longer.  But be assured, there is a house out there that you will love. I suggest you find that house first and finalize the deal before you put your house on the market. That way you know you will love it when yoy get  there.

With respect to the price, the less inventory there is on the market when you sell, the less competition you’re likely to face from other sellers. That means your house will get more attention from the buyers looking for a home this spring. And since there are significantly more buyers in the market than there are homes for sale, you could even receive more than one offer on your house. Multiple offers are on the rise again (see graph below):

The below chart shows the sales price trend in Chester county.

CHESCO, MEDIAN SALES  PRICE, SINGLE FAMILY
2020 THRU MARCH 2023
Month 2020 2021 2022 2023
Jan $396,250 $452,500 $484,900 $527,500
Feb $385,000 $441,700 $510,000 $507,500
Mar $386,792 $495,000 $525,000 $542,000
Apr $425,000 $481,250 $540,000
May $447,450 $512,021 $531,055
Jun $429,950 $515,000 $600,000
Jul $459,900 $531,000 $575,000
Aug $460,000 $498,000 $550,000
Sep $451,100 $479,900 $540,000
Oct $453,000 $494,075 $549,500
Nov $440,000 $499,000 $545,000
Dec $451,000 $508,961 $500,000
Annual $432,120 $492,367 $537,538
Annual % 13.9% 9.2%
Year over Year increases 12 of 12 months in 2021
11 of 12 months in 2022 and 2 of 3 months in 2023
Strong Upward Price Trend

 

The numbers in bold italics show the year over year months in which sales price was above the same month in the previous year. 11 out of 12 months in 2022 and 2 of 3 in 2023. That is a strong upward price trend that says you should be able to get a price that makes you happy, if your house is properly priced and marketed.

If you get more than one offer on your house, it becomes a bidding war between buyers – and that means you have greater leverage to sell on your terms. But if you want to maximize the opportunity for a bidding war to spark, be sure to lean on your expert real estate advisor. While we’re still in a strong sellers’ market, it isn’t the frenzy we saw a couple of years ago, and today’s buyers are focused on the houses with the greatest appeal.

I believe that these data show we are still in a strong sellers’ market and the risk of any significant downtrend in prices is very small.

For the move up buyer, you also have excellent prospects that your new house wil continue to go up in value. So now is the time to make that move and start to increase your family’s net worth.

One more question needs to be answered and that is, will we be able to sell our house soon enough to avoid having two mortgages to pay. My recommendations here are:

  • Negotiate a long time period from offer acceptance to settlement on the house you buy.
  • Then get your house on the market with a good realtor, priced right and marketed right.

The below chart summarizes the recent history of days on market or about how long it should take you to sell.

CHESCO, DAYS ON MARKET (DOM), 2020 THRU MARCH 2023
SINGLE FAMILY, DETACHED
Month DOM, 2020 DOM,2021 DOM 2022 DOM 2023
Jan 45 8 7 14
Feb 48 9 8 8
Mar 26 7 6 6
Apr 13 6 5
May 13 5 6
Jun 14 6 6
Jul 9 6 6
Aug 7 6 7
Sep 8 7 7
Oct 7 6 7
Nov 7 8 7
Dec 7 7 12

 

As you can see, median days on market for most of the last two years have been about a week. That means that you can reasonably expect to have an offer with which you are comfortable in about seven days. That really minimizes the risk that you could get stuck with two mortgages. If you have 60 days to settle and get your house sold in a week, you should be in great shape. Here again, you can really use the services of a good realtor.

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 listent to our 14 minute podcast on this topic, please click  https://bit.ly/Big_Advantage_If_You_Sell_This_Spring

 

 

Posted in: Build Wealth, Forecast for 2023, Get Richer Quicker, Home Equity, Move Up Buyers, Sellers

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.

Posted in: Build Wealth, Buyers, Forecast for 2023, Get Richer Quicker, Move Up Buyers, Sellers

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Wallingford, PA 19086

484-574-4088