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

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

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

Selma Hepp, Chief Economist at CoreLogic, says:

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

 

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

IMPLICATIONS FOR BUYERS AND SELLERS TODAY

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

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

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

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

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

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

Selma Hepp, Chief Economist at CoreLogic, says:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

IMPLICATIONS FOR BUYERS AND SELLERS TODAY

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

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

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

CHESTER COUNTY, ARE HOME PRICES GOING TO CRASH?

CHESTER COUNTY, ARE HOME PRICES GOING TO CRASH?

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

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

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

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

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

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

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

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

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

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

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

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

Here is the recent history for Chester county.

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

 

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

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

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

 

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

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

IMPLICATIONS FOR BUYERS AND SELLERS TODAY

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

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

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

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.