DELAWARE COUNTY, 2 THINGS SELLERS NEED TO KNOW THIS SPRING

DELAWARE  COUNTY, 2 THINGS SELLERS NEED TO KNOW THIS SPRING

A lot has changed over the past year, and you might be wondering what’s in store for the spring housing market. If you’re planning to sell your house this season, here’s what real estate experts are saying you should keep in mind.

1. HOUSES THAT ARE PRICED RIGHT ARE STILL SELLING

Houses that are updated and priced at their current market value are still selling. Jeff Tucker, Senior Economist at Zillow, says:

“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”

The need to price your house right is so important today because the market has changed so much over the past year. Danielle Hale, Chief Economist at realtor.com, explains:

“With a smaller pool of buyers today and more competition from other homes on the market, homesellers will likely need to adjust their price expectations in the market this spring.”

While this spring housing market is different than last year’s, sellers with proper expectations who lean on a real estate expert for the best advice on pricing their house well are still finding success. And that’s great news if you’re thinking about selling.

2. BUYERS ARE STILL OUT THERE

As mortgage rates have risen and remain volatile, some buyers have pressed pause on their plans. But there are still plenty of reasons people are buying homes today. Lisa Sturtevant, Chief Economist at Bright MLS, spells out the mindset of today’s buyers:

“For some buyers, higher mortgage rates simply means buying a home is out of the question unless home prices fall. For others, higher mortgage rates will be a hurdle but ultimately will not keep them from getting back into the market after sitting on the sidelines for months.”

That’s why, if you’re interested in selling your house this spring, it’s helpful to work with a real estate agent who can help connect you with those buyers who are ready to purchase a home.

WHAT DOES THIS MEAN FOR DELAWARE COUNTY?

If you are thinking about selling and making a move up buy, there are two major factors to consider.

  • Will I be able to sell for the price I think is fair,  in this increased interest rate market?
  • How long will it probably take?

To answer the first question, please take a look at the table below. It shows median price of a single family home in Delaware county for the last 2+ years. Please note that the median price for 10 of the 12 months in 2022 was higher than for the same month in 2021.  This trend continued into January and February, 2023.

MEDIAN SALES PRICE, DELAWARE COUNTY, SINGLE FAMILY DETACHED.
Month Sale Price Sale Price Difference % Diff Sale Price Difference % Diff
2021 2022 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% $387,500 ($16,000) -4.0%
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%
Average Sales Price, 1Q, 2022 $379,833
Average Sales Price, 1Q, 2023 $384,167
Difference $4,333
% Diff 1.1%

 

March 2023 median price was lower than the same month in 2022. Could this mean that we have reached a turning point and that prices will probably be going down from here on?  Maybe, but I do not think so. Even if we have a modest dip, price appreciation should resume quickly. That means that you can get a reasonable price for your home, if you choose to make a move up buy.

With respect to how long will it take, Days on Market for Delaware County for the last 3 months have been 16, 18 and 11. That means that if  your house is priced right and marketed well, you can reasonably expect to have an offer you can accept no more that 2-3 weeks.

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?  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, 2 THINGS SELLERS NEED TO KNOW THIS SPRING

CHESTER  COUNTY, 2 Things Sellers Need To Know This Spring

A lot has changed over the past year, and you might be wondering what’s in store for the spring housing market. If you’re planning to sell your house this season, here’s what real estate experts are saying you should keep in mind.

1. Houses That Are Priced Right Are Still Selling

Houses that are updated and priced at their current market value are still selling. Jeff Tucker, Senior Economist at Zillow, says:

“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”

The need to price your house right is so important today because the market has changed so much over the past year. Danielle Hale, Chief Economist at realtor.com, explains:

“With a smaller pool of buyers today and more competition from other homes on the market, homesellers will likely need to adjust their price expectations in the market this spring.”

While this spring housing market is different than last year’s, sellers with proper expectations who lean on a real estate expert for the best advice on pricing their house well are still finding success. And that’s great news if you’re thinking about selling.

2. Buyers Are Still Out There

As mortgage rates have risen and remain volatile, some buyers have pressed pause on their plans. But there are still plenty of reasons people are buying homes today. Lisa Sturtevant, Chief Economist at Bright MLS, spells out the mindset of today’s buyers:

“For some buyers, higher mortgage rates simply means buying a home is out of the question unless home prices fall. For others, higher mortgage rates will be a hurdle but ultimately will not keep them from getting back into the market after sitting on the sidelines for months.”

That’s why, if you’re interested in selling your house this spring, it’s helpful to work with a real estate agent who can help connect you with those buyers who are ready to purchase a home.

WHAT DOES THIS MEAN FOR CHESTER COUNTY

If you are thinking about selling and making a move up buy, there are two major factors to consider.

  • Will I be able to sell for the price I think is fair,  in this increased interest rate market?
  • How long will it probably take?

To answer the first question, please take a look at the table below. It shows median price of a single family home in Chester county for the last 2+ years. Please note that the median price for 11 of the 12 months in 2022 was higher than for the same month in 2021.  This trend continued into January, 2023.

February and March 2023 median price was lower than the same month in 2022. Could this mean that we have reached a turning point and that prices will probably be going down from here on.  Maybe, but i do not think so. Even if we have a modest dip, price appreciation should resume quickly. That means that you can get a reasonable price for your home, if you choose to make a move up buy.

With respect to how long will it take, Days on Market for Chester County for the last 3 moths have been 18, 13 and 10. That means that if  your house is priced right and marketed well, you can reasonably expect to have an offer you can accept no more that 2-3 weeks.

MEDIAN SALES PRICE, CHESTER COUNTY, PA, SINGLE FAMILY DETACHED
Month Sale Price Sale Price Difference % Diff Sale Price Difference % Diff
2021 2022 2022-2021 2023 2023-2022
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% $510,000 ($15,000) -2.9%
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 $492,367 $537,955 $45,587 9.3%
Average Sales Price, 1Q, 2022 $506,633
Average Sales Price, 1Q, 2023 $515,000
Difference $8,367
% Diff 1.7%

 

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?  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 listen to our recent 14 minute podcast on this topic, please click on
    bit.ly/Chester_County_2_Things_Sellers_Need_To_Know

 

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

DELAWARE COUNTY, TWO BIG ISSUES IN THE HOUSING MARKET, WHAT THAT MEANS TO YOU

DELAWARE COUNTY, Two Big Issues IN THE HOUSING MARKET, WHAT THAT MEANS TO YOU

The Two Big Issues the Housing Market’s Facing Right Now | MyKCM

CONCLUSIONS:

  • First issue is that we still have a limited number of houses for sale.
  • Second issue is that higher mortgage rates have some prospective buyers and sellers on the sidelines.
  • In spite of this right now is a better time for both first time buyers and move up sellers and buyers than waiting for interest rates and/or prices to come down.

DISCUSSION

The biggest challenge the housing market’s facing is how few homes there are for sale. Mark Fleming, Chief Economist at First American, explains the root causes of today’s low supply:

“Two dynamics are keeping existing-home inventory historically low – rate-locked existing homeownersandthe fear of not finding something to buy.”

Let’s break down these two big issues in today’s housing market.

Rate-Locked Homeowners

According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% (see graph below):

But today, the typical mortgage rate offered to buyers is over 6%. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as being rate locked.

When so many homeowners are rate locked and reluctant to sell, it’s a challenge for a housing market that needs more inventory. However, experts project mortgage rates will gradually fall this year, and that could mean more people will be willing to move as that happens.

The Fear of Not Finding Something To Buy

The other factor holding back potential sellers is the fear of not finding another home to buy if they move. Worrying about where they’ll go has left many on the sidelines as they wait for more homes to come to the market. That’s why, if you’re on the fence about selling, it’s important to consider all your options. That includes newly built homes, especially right now when builders are offering concessions like mortgage rate buydowns.

What Does This Mean for You?

Let’s take a deeper dive into the facts and see what they say about what buyers and sellers should do now.

These two issues are keeping the supply of homes for sale lower than pre-pandemic levels. But if you want to sell your house, today’s market is a sweet spot that can work to your advantage. In Delaware county,  houses are still selling quickly. Just check out the below data.

DELAWARE COUNTY, MEDIAN DAYS ON MARKET
JAN 2021 – FEB 2023
Month CDOM 2021 CDOM 2022 CDOM  2023
Jan 7 15 12
Feb 12 12 12
Mar 7 7
Apr 6 7
May 6 6
Jun 6 6
Jul 7 6
Aug 7 8
Sep 10 9
Oct 10 11
Nov 10 8
Dec 12 9

Median Days on Market increased from 6-10 days over the past two years, up to 12 days in December and January. What that means is that if you put your house on the market you can reasonably expect to get an acceptable agreement of sale in 12 days or in a little less than two weeks.  Bottom line, when your house is professionally marketed and priced, you should have no problem selling.

But how about finding that next place to live? For first time buyers with no existing house to sell, that is not an issue. It just will probably take a little longer than it would have a year or so ago.

DELAWARE COUNTY, MONTHS OF INVENTORY, JAN 21 THRU FEB 23
Month Months Of Months Of Months Of
Inventory, 2021 Inventory, 2022 Inventory, 2023
Jan 3 3 4
Feb 5 3 3
Mar 4 3
Apr 4 3
May 4 3
Jun 3 3
Jul 3 3
Aug 3 2
Sep 4 3
Oct 3 3
Nov 3 3
Dec 2 2

 

Also prices are stable and still increasing. To verify please check out the below chart. Median sales price was higher than the same month in the previous year for 9 of the 12 months in 2022.  The same trend continued into 2023.

DELAWARE COUNTY, MEDIAN SALES  PRICE
JAN 2021 THRU FEB 2023
Month Sale Price Sale Price Sale Price
Median 2021 Median 2022 Median 2023
Jan $359,000 $360,000 $375,000
Feb $335,450 $376,000 $390,000
Mar $369,500 $403,500
Apr $400,000 $415,000
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

 

For the Move Up Buyer, my advice is to consider finding the  house you want and getting an Agreement of Sale before putting your house on the market. Try to negotiate a long settlement (like 90 days) to give you more time to find your next house. Because the Median Days on Market are only 12 days, this should not present a problem.

Is this a little risky? Yes,  but in this low inventory market I think it is a reasonable risk to take to lock in the price for your next house before they go higher.

Be sure to work with a local real estate professional to explore the options you have right now, which could include leveraging your current home equity. According to ATTOM:

“. . . 48 percent of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50 percent of their estimated market values.”

This could make a major difference when you move. Work with a local real estate expert to learn how putting your equity to work can keep the cost of your next home down.

RECOMMENDATIONS:

  • For First Time Buyers: Prices are still stable and moving up in Delaware county. Thus it makes sense for you to buy that first house NOW. That way you begin to build your family’s wealth and net worth right away.
  • For Move Up Buyers: Given the low inventory or houses in Delaware county,  your first step should be to get an agreement of sale on the house to which you want to move. That could take longer than normal and you want to insure that you can get into a house you really like.
  • Then get your house on the market. Given the speed with which houses are selling, this presents minimal risk to 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.
  • 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. 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.

CHESTER COUNTY, TWO BIG ISSUES IN THE HOUSING MARKET; WHAT THAT MEANS TO YOU

CHESTER COUNTY, Two Big Issues IN THE HOUSING MARKET, WHAT THAT MEANS TO YOU

The Two Big Issues the Housing Market’s Facing Right Now | MyKCM

CONCLUSIONS:

  • First issue is that we still have a limited number of houses for sale.
  • Second issue is that higher mortgage rates have some prospective buyers and sellers on the sidelines.
  • In spite of this right now is a better time for both first time buyers and move up sellers and buyers than waiting for interest rates and/or prices to come down.

DISCUSSION

The biggest challenge the housing market’s facing is how few homes there are for sale. Mark Fleming, Chief Economist at First American, explains the root causes of today’s low supply:

“Two dynamics are keeping existing-home inventory historically low – rate-locked existing homeownersandthe fear of not finding something to buy.”

Let’s break down these two big issues in today’s housing market.

Rate-Locked Homeowners

According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% (see graph below):

But today, the typical mortgage rate offered to buyers is over 6%. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as being rate locked.

When so many homeowners are rate locked and reluctant to sell, it’s a challenge for a housing market that needs more inventory. However, experts project mortgage rates will gradually fall this year, and that could mean more people will be willing to move as that happens.

The Fear of Not Finding Something To Buy

The other factor holding back potential sellers is the fear of not finding another home to buy if they move. Worrying about where they’ll go has left many on the sidelines as they wait for more homes to come to the market. That’s why, if you’re on the fence about selling, it’s important to consider all your options. That includes newly built homes, especially right now when builders are offering concessions like mortgage rate buydowns.

What Does This Mean for You?

Let’s take a deeper dive into the facts and see what they say about what buyers and sellers should do now.

These two issues are keeping the supply of homes for sale lower than pre-pandemic levels. But if you want to sell your house, today’s market is a sweet spot that can work to your advantage. In Chester county,  houses are still selling quickly. Just check out the below data.

CHESTER COUNTY, MEDIAN DAYS ON MARKET, JAN 21 – FEB 23
Month CDOM, 2021 CDOM, 2022 CDOM, 2023
Jan 8 7 14
Feb 9 8 8
Mar 7 6
Apr 6 5
May 5 6
Jun 6 6
Jul 6 6
Aug 6 7
Sep 7 7
Oct 6 7
Nov 8 7
Dec 7 12

Median Days on Market increased from 6-7 days over the past two years, up to 12 and 14 days in December and January, then got back into more familiar territory in February at 8 days. What that means is that if you put your house on the market you can reasonably expect to get an acceptable agreement of sale in 8 days or about one week which is where we have been for 2 years plus.  Also prices are stable and still increasing.  Bottom line, when your house is professionally marketed and priced, you should have no problem selling.

But how about finding that next place to live? For first time buyers with no existing house to sell, that is not an issue. It just will probably take a little longer than it would have a year or so ago.

For the Move Up Buyer, my advice is to consider finding the  house you want and getting an Agreement of Sale before putting your house on the market. Try to negotiate a long settlement (like 90 days) to give you more time to find your next house. Because the Median Days on Market are only 8 days, this should not present a problem.

Is this a little risky? Yes,  but in this low inventory market I think it is a reasonable risk to take to lock in the price for your next house before they go higher.

Be sure to work with a local real estate professional to explore the options you have right now, which could include leveraging your current home equity. According to ATTOM:

“. . . 48 percent of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50 percent of their estimated market values.”

This could make a major difference when you move. Work with a local real estate expert to learn how putting your equity to work can keep the cost of your next home down.

RECOMMENDATIONS:

  • For First Time Buyers: Prices are still stable and moving up in Chester county. Thus it makes sense for you to buy that first house NOW. That way you begin to build your family’s wealth and net worth right away.
  • For Move Up Buyers: Given the low inventory or houses in Chester county,  your first step should be to get an agreement of sale on the house to which you want to move. That could take longer than normal and you want to insure that you can get into a house you really like.
  • Then get your house on the market. Given the speed with which houses are selling, this presents minimal risk to 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.
  • 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. 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.

RADNOR, WALLINGFORD-SWARTHMORE, MEDIA, MARPLE NEWTOWN, GARNET VALLEY, SPRINGFIELD; THE MAJOR BENEFIT OF INVESTING IN A HOME

RADNOR, WALLINGFORD-SWARTHMORE, MEDIA, MARPLE NEWTOWN, GARNET VALLEY, SPRINGFIELD; THE Major Benefit of Investing in a Home

One Major Benefit of Investing in a Home | MyKCM

CONCLUSIONS

  • Is now  good time to buy that first home or
  • Is now a good time to make that Move Up Buy?
  • Almost unequivocally the answer is YES!!!!!

DISCUSSION

Or if you would like to listen to our recent 12 minute long Dad and Daughter Talk Real Estate Broadcast of this topic, just click on https://bit.ly/Major_Benefit_of_Investing_in_a_Home 

One of the many reasons to buy a home is that it’s a major way to build wealth and gain financial stability. According to Freddie Mac: “Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”

With spring approaching, now’s a great time to consider if buying a home makes sense for you. The best way to figure that out is to talk with a trusted real estate professional.

The Largest Part of Most Homeowners’ Net Worth Is Their Equity

You may be surprised to learn just how much of a homeowner’s net worth actually comes from owning their home. The National Association of Realtors (NAR) shares:

“Homeownership is the largest source of wealth among families, with the median value of a primary residence worth about ten times the median value of financial assets held by families. Housing wealth (home equity or net worth) gains are built up through price appreciation and by paying off the mortgage.”

In other words, home equity does more to build the average household’s wealth than anything else. And according to data from First American, this holds true across different income levels (see graph below):

INVESTMENT CASE HISTORY, AUTHOR’S HOME OWNERSHIP EXPERIENCE

We moved to Pennsylvania in 1979 for a job  with Scott Paper Company, back when there was a Scott Paper Company.  Conversations with fellow employees to find a house that was convenient to the job and in a great school district for our 11, 9 and 5 year old daughters led to Wallingford, Delaware county.  We purchased a structurally sound, cosmetically all beat to pieces home for a fixer upper price (still high for the time, please don’t laugh) of $83,000.

After lots of love, elbow grease, marvelous neighbors and wonderful family times, we sold in 2023 (44 years later for $695,000). That is a gain of $612,000. Capital improvements reduce the taxable gain to just under $500,000. That makes the entire gain exempt from income taxes. As opposed to stock market investments on which we pay short or long term capital gains taxes on every profitable transaction. And we also had income tax deductions every year for mortgage interest and property taxes.

That is a compounded rate of return of 4.93% per year.  Historical average annual appreciation rate over several decades in the United States is 3.5%, so we beat the averages. I should add that, for people who are concerned about short term market corrections (like 1980-1986 when prices were flat and 2008-2013 when prices declined by a lot), our gain was achieved despite those lean years.

Now lets take a peek into the future. What probably is in store for a family who buys the median priced home in the above mentioned school districts ($577,000)?  If we assume the average appreciation rate of 3.5%, That is a minimal risk if you plan to stay in the house for at least 5-10 years. With those conditions, here is the estimated home value at 10, 20 and 20 years into the future.

  • 2033, $814,000 Gain of $237,000
  • 2043, $1,148,000, Gain of $571,000
  • 2053, $1,620,000, Gain of $1,043,000

I think you can see how making this investment is going to provide for a much improved net worth after just  few years.

To give you an actual historical summary of how this would have worked for you if you had bought the median priced house in these areas back in 2014, here is the data. This is probably the best estimate we can give you for how it will probably work out in the future also.

MEDIAN SALES PRICE, RADNOR, WALLINGFORD-SWARTHMORE
MEDIA, MARPLE NEWTOWN, GARNET VALLEY AND SPRINGFIELD
Primary Year Sale Price, Median Difference Diff %
2014 $365,000
2015 $375,000 $10,000 2.7%
2016 $390,000 $15,000 4.0%
2017 $415,000 $25,000 6.4%
2018 $415,750 $750 0.2%
2019 $425,000 $9,250 2.2%
2020 $475,000 $50,000 11.8%
2021 $549,450 $74,450 15.7%
2022 $577,000 $27,550 5.0%
Overall $212,000 58.1%

Unfortunately my data does not go back any farther than that. But you get the idea. Eight years ago that would have been an amazing investment.  There is always risk associated with any investment, but with residential real estate, the risk is minimal.

RECOMMENDATIONS FOR YOU

  • 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. 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.

WEST CHESTER, PA; THE MAJOR BENEFIT OF INVESTING IN A HOME

WEST CHESTER, PA; THE Major Benefit of Investing in a Home

One Major Benefit of Investing in a Home | MyKCM

CONCLUSIONS

  • Is now  good time to buy that first home or
  • Is now a good time to make that Move Up Buy?
  • Almost unequivocally the answer is YES!!!!!

DISCUSSION

Or if you would like to listen to our recent 12 minute long Dad and Daughter Talk Real Estate Broadcast of this topic, just click on https://bit.ly/Major_Benefit_of_Investing_in_a_Home 

One of the many reasons to buy a home is that it’s a major way to build wealth and gain financial stability. According to Freddie Mac: “Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”

With spring approaching, now’s a great time to consider if buying a home makes sense for you. The best way to figure that out is to talk with a trusted real estate professional.

The Largest Part of Most Homeowners’ Net Worth Is Their Equity

You may be surprised to learn just how much of a homeowner’s net worth actually comes from owning their home. The National Association of Realtors (NAR) shares:

“Homeownership is the largest source of wealth among families, with the median value of a primary residence worth about ten times the median value of financial assets held by families. Housing wealth (home equity or net worth) gains are built up through price appreciation and by paying off the mortgage.”

In other words, home equity does more to build the average household’s wealth than anything else. And according to data from First American, this holds true across different income levels (see graph below):

INVESTMENT CASE HISTORY, AUTHOR’S HOME OWNERSHIP EXPERIENCE

We moved to Pennsylvania in 1979 for a job  with Scott Paper Company, back when there was a Scott Paper Company.  Conversations with fellow employees to find a house that was convenient to the job and in a great school district for our 11, 9 and 5 year old daughters led to Wallingford, Delaware county.  We purchased a structurally sound, cosmetically all beat to pieces home for a fixer upper price (still high for the time, please don’t laugh) of $83,000.

After lots of love, elbow grease, marvelous neighbors and wonderful family times, we sold in 2023 (44 years later for $695,000). That is a gain of $612,000. Capital improvements reduce the taxable gain to just under $500,000. That makes the entire gain exempt from income taxes. As opposed to stock market investments on which we pay short or long term capital gains taxes on every profitable transaction. And we also had income tax deductions every year for mortgage interest and property taxes.

That is a compounded rate of return of 4.93% per year.  Historical average annual appreciation rate over several decades in the United States is 3.5%, so we beat the averages. I should add that, for people who are concerned about short term market corrections (like 1980-1986 when prices were flat and 2008-2013 when prices declined by a lot), our gain was achieved despite those lean years.

Now lets take a peek into the future. What probably is in store for a family who buys the median priced home in West Chester ($540,000)? If we assume the average appreciation rate of 3.5%, That is a minimal risk if you plan to stay in the house for at least 5-10 years. With those conditions, here is the estimated home value at 10, 20 and 20 years into the future.

  • 2033, $762,000, Gain of $222,000
  • 2043, $1,074,000, Gain of $534,000
  • 2053, $1,516,000, Gain of $976,000

I think you can see how making this investment is going to provide for a much improved net worth after just  few years.

To give you an actual historical summary of how this would have worked for you if you had bought the median priced house in West Chester back in 2014, here is the data. This is probably the best estimate we can give you for how it will probably work out in the future also.

Median Sales Price, West Chester, PA
Primary Year Sale Price, Median Difference Diff %
2014 $415,000
2015 $429,950 $14,950 3.5%
2016 $434,900 $4,950 1.1%
2017 $450,000 $15,100 3.4%
2018 $482,395 $32,395 6.7%
2019 $500,000 $17,605 3.5%
2020 $530,000 $30,000 5.7%
2021 $625,000 $95,000 15.2%
2022 $695,000 $70,000 10.1%
Overall $280,000 67.5%

Unfortunately my data does not go back any farther than that. But you get the idea. Eight years ago that would have been an amazing investment.  There is always risk associated with any investment, but with residential real estate, the risk is minimal.

RECOMMENDATIONS FOR YOU

  • 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. 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.

CHESTER COUNTY HOME VALUES, HAVE WE HIT BOTTOM?

CHESTER COUNTY Home Values, HAVE WE  Hit BottoM?

Whether you’re already a homeowner or you’re looking to become one, the recent headlines about home prices may leave you with more questions than answers. News stories are talking about home prices falling, and that’s raising concerns about a repeat of what happened to prices in the crash in 2008.

One of the questions that’s on many minds, based on those headlines, is: how much will home prices decline? But what you may not realize is expert forecasters aren’t calling for a free fall in prices. In fact, if you look at the latest data, there’s a case to be made that the biggest portion of month-over-month price depreciation nationally may already behind us – and even those numbers weren’t significant declines on the national level. Instead of how far will they drop, the question becomes: have home values hit bottom?

Let’s take a look at the latest data from several reputable industry sources (see chart below):

Have Home Values Hit Bottom? | MyKCM

The chart above provides a look at the most recent reports from Case-Shiller, the Federal Housing Finance Agency (FHFA), Black Knight, and CoreLogic. It shows how, on a national scale, home values have changed month-over-month since January 2022. November and December numbers have yet to come out.

Let’s focus in on what the red numbers tell us. The red numbers are the change in home values over the last four months that have been published. And if we isolate the last four months, what the data shows is, in each case, home price depreciation peaked in August.

While that doesn’t guarantee home price depreciation has hit bottom, it confirms prices aren’t in a free fall, and it may be an early signal that the worst is already behind us. As the numbers for November and December are released, data will be able to further validate this national trend.

SO WHAT IS HAPPENING IN CHESTER COUNTY?

However, it is true in politics and real estate that all the relevant action is local. So, lets take a look at what has happened to median single family home prices in Chester county.  The below chart brings it home for a month by month comparison between 2021 and 2022.

CHESTER COUNTY,MEDIAN SALES PRICES
2021 AND 2022
Month Sale Price, Median 2021 Sale Price, Median 2022 Difference Diff %
Jan $452,500 $481,948 $29,448 6.5%
Feb $441,700 $510,000 $68,300 15.5%
Mar $495,000 $526,821 $31,821 6.4%
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 $537,500 $57,600 12.0%
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%
Totals $492,367 $537,652 $45,285 9.2%
Month by month every data point for Chester county shows increasing year over year home prices for every month in 2022 until December.
For the entire year prices were up by a very robust 9.2%. That is too much of a good thing and is not sustainable long term. But, short term, like the national data points,  it shows that we are not heading for a price collapse.
But what about numbers of home sales. Here is the chart and verbiage on that:
Chester County, Number of Sales, 2021/22
Month Sales, Number of 2021 Sales, Number of 2022 Difference Diff %
Jan 319 302 17 -5.3%
Feb 239 219 20 -8.4%
Mar 345 304 41 -11.9%
Apr 380 338 42 -11.1%
May 437 363 74 -16.9%
Jun 644 509 135 -21.0%
Jul 551 443 108 -19.6%
Aug 584 467 117 -20.0%
Sep 479 350 129 -26.9%
Oct 456 274 182 -39.9%
Nov 419 265 154 -36.8%
Dec 421 253 168 -39.9%
Totals 440 341 99 -22.5%

If one is among the ankle biting nay sayers for whom there is never good news,  you could make a case that the real estate market in Chester county has indeed gone to hell in a hand basket and that dramatic overall collapse must be on the way.

However, two other major indicators say no. Inventory is still low at only 2 months. That says there are still a lot more buyers than sellers (more demand than there is supply) which is very bullish for prices.

Also, Days on Market is at a low 12 days. That means that when a home comes on the market, if it is well priced and marketed, the seller can reasonably expect to have an acceptable offer in about 12 days. A “normal” market would be about 30 days. This again indicates that we have a lot more buyers than sellers (more demand than there is supply) which is very bullish for prices.

Bottom Line

Nationally, home prices month-over-month have depreciated for the four months of July through October. However, that is not the case for our local market.

If you’re looking to buy or sell a home 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.

WHAT SHOULD BE NEXT FOR YOU?

If you have questions about home prices or how much equity you have in your current home, let’s connect so you have an expert’s advice.

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.

CHESTER COUNTY, PA – HOW TO BUILD NET WORTH IN A HURRY THROUGH REAL ESTATE

CHESTER COUNTY, PA – HOW TO BUILD NET WORTH IN A HURRY THROUGH REAL ESTATE

How Homeownership Can Help Shield You from Inflation | MyKCM

CHESTER COUNTY, PA – YOU CAN BUILD NET WORTH IN A HURRY THROUGH REAL ESTATE AND PROTECT YOURSELF FROM INLATION AT THE SAME TIME.

If you would rather listen to the podcast of April 30 and May 1, just click on this hyperlink to listen to the 14 minute weekly program of “DAD AND DAUGHTER TALK REAL ESTATE”, https://bit.ly/Build_Wealth_Quick

If you’re following along with the news today, you’ve likely heard about rising inflation. You’re also likely feeling the impact in your day-to-day life as prices go up for gas, groceries, and more. These rising consumer costs can put a pinch on your wallet and make you re-evaluate any big purchases you have planned to ensure they’re still worthwhile.

If you’ve been thinking about purchasing a home this year, you’re probably wondering if you should continue down that path or if it makes more sense to wait. While the answer depends on your situation, here’s how homeownership can help you combat the rising costs that come with inflation.

Homeownership Offers Stability and Security

Investopedia explains that during a period of high inflation, prices rise across the board. That’s true for things like food, entertainment, and other goods and services, even housing. Both rental prices and home prices are on the rise. So, as a buyer, how can you protect yourself from increasing costs? The answer lies in homeownership.

Buying a home allows you to stabilize what’s typically your biggest monthly expense: your housing cost. If you get a fixed-rate mortgage on your home, you lock in your monthly payment for the duration of your loan, often 15 to 30 years. James Royal, Senior Wealth Management Reporter at Bankrate, says:

“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.” 

So even if other prices rise, your housing payment will be a reliable amount that can help keep your budget in check. If you rent, you don’t have that same benefit, and you won’t be protected from rising housing costs.

Use Home Price Appreciation to Your Benefit

While it’s true rising mortgage rates and home prices mean buying a house today costs more than it did a year ago, you still have an opportunity to set yourself up for a long-term win. Buying now lets you lock in at today’s rates and prices before both climb higher.

In inflationary times, it’s especially important to invest your money in an asset that traditionally holds or grows in value. The graph below shows how home price appreciation outperformed inflation in most decades going all the way back to the seventies – making homeownership a historically strong hedge against inflation (see graph below):

How Homeownership Can Help Shield You from Inflation | MyKCMSo, what does that mean for you?

If you had bought the median priced house in 2012 for $329,900, by 2022 (right now)  that median priced house would be selling for $510,000. That is a gain of $180,100 or a net gain or about $144,400 after deducting normal sales expenses and commissions.

Considering that it would cost you as little as $26,400 to get into that deal, That comes out to an annual rate of return of just above 18%.

If you bought the median priced house only five years ago for $380,000, your gain would be about $94,000; rate of return would be about 25% per year.

Today, experts say home prices will only go up from here thanks to the ongoing imbalance in supply and demand. Once you buy a house, any home price appreciation that does occur will be good for your equity and your net worth. And since homes are typically assets that grow in value (even in inflationary times), you have peace of mind that history shows your investment is a strong one.

Bottom Line

If you’re ready to buy a home, it probably makes a lot of sense to move forward with your plans especially in view of the  rising inflation. If you want expert advice on your specific situation and how to time your purchase, let’s connect. Just call or text to 484-574-4088 or check out my web site, www.johnnherreid.com for ways to get in touch.

If you would rather listen to the podcast of April 30 and May 1, just click on this hyperlink to listen to the 14 minute weekly program of “DAD AND DAUGHTER TALK REAL ESTATE”, https://bit.ly/Build_Wealth_Quick