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, 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.

DELAWARE COUNTY, WONDERING WHAT’S GOING ON WITH HOME PRICES?

DELAWARE COUNTY, WONDERING WHAT’S GOING ON WITH HOME PRICES?

Wondering What’s Going on with Home Prices? | MyKCM

CONCLUSIONS

  • Is now a good time to buy your first home, Yes. Indications are that home prices will continue to increase, even  with the recent increases in mortgage interest rates.
  • If you have been in your home for a few years and have built up equity, is now a good time to sell and make that move up buy, Yes,  for the same reasons as above.
  • If mortgage rates go up, you are protected for the life of your mortgage.
  • If mortgage rates go down, many lenders are offering free refi’s which will protect you on the downside.
  • People who want to sell will be able to sell for a price they will like and in a reasonable period of time.
  • People who want to buy will still be able to find a house they will like.

DISCUSSION

The recent changes in home prices are top of mind for many as the housing market begins gearing up for spring. It can be hard to navigate misleading headlines and confusing data, so here’s what you should know about today’s home prices.

Local price trends still vary by market. But looking at national data, Nataliya Polkovnichenko, Ph.D., Supervisory Economist at the Federal Housing Finance Agency (FHFA), explains:

“U.S. house prices were largely unchanged in the last four months and remained near the peak levels reached over the summer of 2022. While higher mortgage rates have suppressed demand, low inventories of homes for sale have helped maintain relatively flat house prices.”

Month-over-month home price changes can be seen in the chart below. The data also shows that price depreciation peaked around August. Since then, any depreciation has been even milder. In other words, today’s home prices aren’t in a freefall.

The national figures were almost uniformly negative for the last half of 2022.  Not so for Delaware county which was  positive for 10 of the last 12 months. And the trend continued into 2023. Please see below:

MEDIAN SALES PRICE BY MONTH, DELAWARE COUNTY 2021, 22 AND 23
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% $385,000 $9,000 2.4%
Mar $369,500 $403,500 $34,000 9.2%
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%

 

Several  other variables  are important when assessing’s  the health of the real estate market.  Three of the most important are Number of Sales, Days on Market (how much time does it take to get a satisfactory agreement of sale), and Average Inventory (how many houses do we have for sale?)

Number of Sales are down a lot in 2022. From 4,206 in 2021 to 3,512 in 2022, a 17% decline. But for people who want to buy or sell right now, that really makes little difference. The more important variables are Days on Market and Months of Inventory

Days on Market have generally been around a week for the last 2 years.  Starting in August, that began to increase. That meant that if your house is put on the market at a reasonable price and well marketed you could reasonably expect to have an Agreement of Sale in about a week or maybe a little bit more.  In December, January and February that got up to 18 to 24. That means the market is slower, but a “normal market” is about 30 days so houses are still moving. If you are thinking about selling, you should still be able to do that for a price that will be acceptable.

Months of Inventory. History tells us that to have a balanced market with about the same number of buyers and sellers, we need 6 months of inventory. Recently that has been very low, about 2-3 months. In December, January and February our inventory was still at 3 and 4 months.  That tells us that there are still more buyers than sellers which means that the demand is higher  than the supply. What happens when we have high demand and low supply,  prices go up.

Stated differently, months of inventory are basically unchanged from the last two years. That means that if you want to buy, either first time or move up, the inventory is there for you to do that.

If you want to buy, chances that the price of your new house will continue to go up.

WHAT DOES THIS MEAN FOR YOU?

If you currently own your house, you may be concerned about even the smallest decline in prices. But keep in mind how much home values grew over the last few years. Compared to that growth, any declines we’re seeing nationally are likely to be minimal. Selma Hepp, Chief Economist at CoreLogic, shares:

“. . . while prices continued to fall from November, the rate of decline was lower than that seen in the summer and still adds up to only a 3% cumulative drop in prices since last spring’s peak.”

Because months of inventory are relatively unchanged from the last 2-3 years, my opinion is that this is still a good time to either buy or sell.  A little different, yes but still a good time.

That is what we have seen and what I believe we will continue to see.

 

RECOMMENDATIONS FOR YOU

  • 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 home prices 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.

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.

WEST CHESTER, PA WHAT’S REALLY HAPPENING WITH HOME PRICES? AND WHAT DOES IT MEAN FOR YOU?

WEST CHESTER, PA What’s Really Happening with Home Prices?

What’s Really Happening with Home Prices? [INFOGRAPHIC] | MyKCM

CONCLUSIONS:

  • Home prices in Chester county are not only maintaining their previous levels, they are still strongly accelerating
  • If you are thinking about buying or selling a home, you can be assured that prices will be stable or increasing for the foreseeable future.
  • Numbers of sales are down a lot, but
  • Houses are still selling quickly.
  • Stated differently, you can buy or sell without fear that prices will go down.

DISCUSSION

  • If you’re thinking about selling your house, recent headlines about home prices falling month-over-month may have you second guessing your decision—but perspective matters.
  • While home prices are down slightly month-over-month in some markets, home values are still up almost 10% nationally on a year-over-year basis. A nearly 10% gain is still dramatic compared to the more normal level of appreciation, which is 3-4%.
  • 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.

WHAT’S REALLY GOING ON FOR CHESTER COUNTY

Like the fellow says, all politics is local. Same is true for real estate. The only factors that really matter are those that are happening in our neighborhoods.

Here is a snapshot of Sales Prices in Chester county over the last 2 years +

WEST CHESTER PENNSYLVANIA, MEDIAN SALES PRICES, 2021 THROUGH JANUARY 2023
Month     Sale Price     Sale Price Difference  % Diff Sale Price
Median 2021 Median 2022 Median 2022
Jan $590,000 $615,000 $25,000 4.2% $680,000
Feb $629,000 $625,000 ($4,000) -0.6%
Mar $585,000 $687,800 $102,800 17.6%
Apr $565,000 $730,000 $165,000 29.2%
May $646,300 $730,000 $83,700 13.0%
Jun $575,000 $758,750 $183,750 32.0%
Jul $689,450 $676,000 ($13,450) -2.0%
Aug $649,817 $675,000 $25,183 3.9%
Sep $618,000 $710,000 $92,000 14.9%
Oct $612,500 $655,000 $42,500 6.9%
Nov $630,000 $564,500 ($65,500) -10.4%
Dec $610,000 $685,000 $75,000 12.3%
Totals $616,672 $676,004 $59,332 9.6%

 

As you can see the price realization in West Chester is real and robust.  The entire year from 2021 to 2022 showed a 9.6% gain. The trend continues through January 2023. That is too real and robust to continue as the long term average is about 3.5%. However these data show that the local market is healthy with a strong demand.

What about the scare  headlines that say, THE REAL ESTATE MARKET HAS COLLAPSED. If we only look at numbers of sales, that is true. But if you are a seller or a buyer, what matters to you is can I sell or can I buy and what are the prices. Below is a chart of the numbers of sales in West Chester over the past 2 years +

WEST CHESTER, PA; NUMBERS OF SALES, SINGLE FAMILY HOMES,
Month Sales Sales Diff % Diff Sales Diff % Diff
2021 2022 2023
Jan 53 51 (2) -4% 23 (28) -55%
Feb 34 33 (1) -3%
Mar 67 56 (11) -16%
Apr 51 51 0 0%
May 70 56 (14) -20%
Jun 101 94 (7) -7%
Jul 80 69 (11) -14%
Aug 100 64 (36) -36%
Sep 76 59 (17) -22%
Oct 78 49 (29) -37%
Nov 65 40 (25) -38%
Dec 68 43 (25) -37%
Totals 843 665 (178) -21%

 

Numbers of sales are down a lot. -21% in 2022 and -55% in January, 2023. But that is only part of the story. As we saw above prices are still holding very steady and increasing.  Now how about another huge indicator, how long does it take to get a house sold? Below are the numbers that tell the tale. Homes are still selling rapidly in Chester County. That says there iare still more buyers than sellers. As long as that is true, prices will still be stable or rising, homes will sell quickly and both buyers and sellers can be assured that the market is not collapsing like it did in 2008/9.

CHESTER COUNTY, SINGLE FAMILY HOMES, DAYS ON MARKET
 JAN 2021 THRU JAN 2023
Month CDOM CDOM CDOM
Median 2021 Median 2022 Median 2023
Jan 8 7 15
Feb 9 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

 

RECOMMENDATIONS

  • 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.
  • 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.

WHAT EVERY SELLER IN CHESTER COUNTY SHOULD KNOW ABOUT HOME PRICES

What Every Seller in chester county Should Know About Home Prices

What Every Seller Should Know About Home Prices | MyKCM

If you’re trying to decide whether or not to sell your house, recent headlines about home prices may be top of mind. And if those stories have you wondering what that means for your home’s value, here’s what you really need to know.

What’s Really Happening with Home Prices?

It’s possible you’ve seen news stories mentioning a drop in home values or home price depreciation, but it’s important to remember those headlines are designed to make a big impression in just a few words. But what headlines aren’t always great at is painting the full picture.

First, lets take a look at national trends in home price appreciation. While home prices are down slightly month-over-month in some markets, it’s also true that home values are up nationally on a year-over-year basis. The graph below uses the latest data from S&P Case-Shiller to help tell the story of what’s actually happening in the housing market today:

What Every Seller Should Know About Home Prices | MyKCM

As the graph shows, it’s true home price growth has moderated in recent months (shown in green) as buyer demand has pulled back in response to higher mortgage rates. This is what the headlines are drawing attention to today.

Like politics, all real estate is local. Lets take a look at the local price trends in Chester county.

CHESTER COUNTY, SINGLE      FAMILY HOMES
MEDIAN SALES PRICE FOR 2021 AND 2022
Month    Price    Price      % Change
    2021    2022
Jan $452,500 $484,900 7.2%
Feb $441,700 $510,000 15.5%
Mar $495,000 $526,821 6.4%
Apr $481,250 $545,000 13.2%
May $512,021 $531,055 3.7%
Jun $515,000 $600,000 16.5%
Jul $531,000 $575,000 8.3%
Aug $498,000 $550,000 10.4%
Sep $479,900 $537,500 12.0%
Oct $494,075 $549,500 11.2%
Nov $499,000 $545,000 9.2%
Dec $508,961 $500,000 -1.8%
Year $492,367 $537,898 9.2%

 

As you can see,  we in Chester County had robust year over year price growth in every month except December. I expect price growth to continue, but at a lower rate than the 9.2% we saw in 2022.

But what’s important to notice, on the national picture, is the bigger, longer-term picture. While home price growth is moderating month-over-month, the percent of appreciation year-over-year is still well above the home price change we saw during more normal years in the market.

The bars for January 2019 through mid-2020 show home price appreciation around 3-4% a year was more typical (see bars for January 2019 through mid-2020). But even the latest data for this year shows prices have still climbed by roughly 10% over last year. 3-4% a year is normal for home price changes in the United States.

What Does This Mean for Your Home’s Equity?

While you may not be able to capitalize on the 9+% appreciation we saw in 2022, we should still see price increases through 2023.

The big takeaway? Don’t let the headlines get in the way of your plans to sell. Over the past two years alone, you’ve likely gained a substantial amount of equity in your home as home prices climbed. Even though home price moderation will vary by market moving forward, you can still use the boost your equity got to help power your move.

As Mark Fleming, Chief Economist at First American, says:

“Potential home sellers gained significant amounts of equity over the pandemic, so even as affordability-constrained buyer demand spurs price declines in some markets, potential sellers are unlikely to lose all that they have gained.”

NEXT STEPS 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. And I would like to interview for the job of becoming your trusted real estate expert.

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.

WHAT IS GOING TO HAPPEN WITH HOUSING PRICES IN CHESTER COUNTY

Confused About HOUSING PRICES IN CHESTER COUNTY?  LET ME BE YOUR RESOURCE and clear away the confusion!!!

l.Confused About What’s Going on in the Housing Market? Lean on a Professional. | MyKCM

 

If you’re thinking about buying or selling a home, you probably want to know what’s really happening with home prices, mortgage rates, housing supply, and more. That’s not an easy task considering how sensationalized headlines are today. Jay Thompson, Real Estate Industry Consultant, explains:

“Housing market headlines are everywhere. Many are quite sensational, ending with exclamation points or predicting impending doom for the industry. Clickbait, the sensationalizing of headlines and content, has been an issue since the dawn of the internet, and housing news is not immune to it.”

Unfortunately, when information in the media isn’t clear, it can generate a lot of fear and uncertainty in the market. As Jason Lewris, Cofounder and Chief Data Officer at Parcl, says:

“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”

But it doesn’t have to be that way. Buying or selling a home is a big decision, and it should be one you feel confident making. To help you separate fact from fiction and get the answers you need, lean on a local real estate advisor.

A trusted expert is your best resource to understand what’s happening at the national and local levels.  I would appreciate a chance to interview for the job as your trusted expert.  No cost or obligation of course. I will debunk the headlines using data you can trust. And I will  provide context so you know how current trends compare to the normal ebbs and flows in the industry, historical data and more.

Together, we will use all of that information to make the best possible decision for you.

Here are some of the data points that can help you to make your decision,

After all, making a move is a potentially life-changing milestone. It should be something you feel ready for and excited about. And that’s where I can come in.

Bottom Line

Is now a good time to either buy or sell a single family detached house in Chester county? My answer is yes.

Here are data points about the Chester county market which explain why I feel that way.

Recent price trends: Median sales price peaked at $600,000 in June, 2022. Since then prices are down to a median of $546,500 in November, decline of 9%. Cause for panic? Not in my opinion.  Sales prices typically peak in mid Summer when most buyers want to get their deals done before the kids go back to school. A typical decline from Juneish to Novemberish is about 5 to 10%.  This year follows that pattern.  Year to date, median selling price is $540,000, up 8.2% from 2021 at $499,000.

Housing Inventory: Chester county  inventory has been mostly between 3 and 6 months for the last two years. Below six months indicates there are more buyers than sellers which is bullish for prices.  November inventory was only 2 months. This is very bullish for prices.

Median Days on Market: This indicates how long it will probably take to get an acceptable offer on your house, once you get it on the market. 30 days is about right for a normal market. For the last two years it has been about 6-7 days which indicates very high demand and that is bullish for prices. In November, it went up to 13 days which is still speedy and indicates high demand.

Active Listings; In November, 2021 there were 1,632 active listings for sale.  In November 2022, there were 816, a drop of 50%.  Not sure why this happened.

Number of Sales: November 2022 we had 264 sales, compared to 419 in November 2021. That is a drop of 37% and indicates a much slower market.

Sales Price as a % of Original Price: For the last two years, most sales prices have been above the asking price. In November, that dipped below 100% for the first time since at least 2020. Ratio was 98.8% which still indicates a strong buyer demand.

Why is this a good time to buy? A cross section of the key market variables tells me that price increases will still happen, but they are slowing down. That gives buyers a little more leverage.

Why is this a good time to sell? If you are needing a bigger house in a different area, I think you can still be confident that prices will continue to increase, but at a slower rate. This is not 2008 and chances of losing a lot of your equity are very small.

NEXT STEPS 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.

WHAT’S AHEAD FOR HOME PRICES IN DOWNINGTOWN NEXT YEAR

What’s Ahead for Home Prices IN DOWNINGTOWN NEXT YEAR?

What’s Ahead for Home Prices? | MyKCM

As the housing market cools in response to the dramatic rise in mortgage rates, home price appreciation will probably be cooling as well. And if you’re following along with headlines in the media, you’re probably seeing a wide range of opinions calling for everything from falling home prices to ongoing appreciation. But what’s true? What’s most likely to happen moving forward?

While opinions differ, the most likely outcome is we’ll fall somewhere in the middle of slight appreciation and slight depreciation. Here’s a look at the latest expert projections so you have the best information possible today.

What the Experts Are Saying About Home Prices Next Year

The graph below shows the most up-to-date forecasts from five experts in the housing industry. These are the experts that have most recently updated their projections based on current market trends:

What’s Ahead for Home Prices? | MyKCM

As the graph shows, the three blue bars represent experts calling for ongoing home price appreciation, just at a more moderate rate than recent years. The red bars on the graph are experts calling for home price depreciation.

While there isn’t a clear consensus, if you take the average (shown in green) of all five of these forecasts, the most likely outcome is, nationally, home price appreciation will be fairly flat next year.

What Does This Mean?

2022 was clearly an aberration with double digit home value increases in much of the United States as we recovered from COVID

Basically, experts are divided on what’s ahead for 2023. Home prices will likely depreciate slightly in some markets and will continue to gain ground in others. It all depends on the conditions in your local market, like how overheated that market was in recent years, current inventory levels, buyer demand, and more.

And the Home Price Expectation Survey (HPES) from Pulsenomics, a poll of over one hundred industry experts, also calls for ongoing appreciation of roughly 3.0 to 4% from 2023-2026. This goes to show, even if prices decline slightly next year, it’s not expected to be a lasting trend.

To understand what is probably going to happen to home prices in Downingtown next year, it is helpful to understand where we have been in recent years and how the present market stacks up with that track record.  Below is a table that shows those data for the Downingtown Area School District for the last five years. We had robust appreciation in home values over the past five years. From $453,750 in 2018 to $610,000,  in 2022 (35.5%). Something of a drop off in 2023 could be expected. But recent sales are indicating ongoing price increases. Although at a lower rate because of the increased mortgage rates.

Median Sales Price, Downingtown
Area School District
Primary Year Sale Price, Median
2018 $453,750
2019 $472,493
2020 $490,000
2021 $560,000
2022 $610,000

 

One could make a case that prices are already declining. In fact, the normal suspects who are always looking for Armageddon are predicting a housing market collapse. But lets take a look at the facts. The below table shows median sales price, by month,  for a single family home  in Downingtown School District in 2022.

Month Downingtown Schools
Sale Price, Median
Jan $464,000
Feb $515,000
Mar $565,000
Apr $651,000
May $550,602
Jun $627,500
Jul $662,500
Aug $650,000
Sep $592,500
Oct $601,250
Nov $635,000
Dec $540,000

 

From a high of $662,500 in July, median sales price is down to $540,000 in December. That is a decline of $122,500 or  19%. But, that is pretty typical of price changes every year. Prices usually peak in mid Summer because parents wat to get their deals done in time for the children to start school in the Fall.

POSSIBLE NEXT STEPS FOR YOU

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. Let’s connect so that I can help you make confident and informed decisions about what’s happening in our market. Don’t let fear or uncertainty change your plans. If you’re unsure about where prices are headed or how to make sense of what’s going on in today’s housing market, reach out to 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.