WEST CHESTER, PA REAL ESTATE. WEATHERING UNCERTAINTIES WITH OPTIMISM

Please watch the video first. It kind of sets up the whole article.

West Chester, PA Real Estate: Weathering Uncertainties with Optimism

The real estate market in West Chester, PA, is a focal point of discussion for buyers and sellers alike, especially with the looming concerns about a potential recession and its possible effects on the economy. This raises questions about the implications for the housing market in our picturesque Pennsylvania town.

Recent talks have been dominated by the potential of a recession, sparking fears such as increased unemployment rates and the possibility of foreclosures like those witnessed 15 years ago. However, the sentiment is shifting towards optimism.

A key report from the Wall Street Journal’s Economic Forecasting Survey underscores this change in attitude. Now, less than half of the economists (48%) foresee a recession in the next year, a notable decrease from the 54% average in July. This is the first instance in over a year where the likelihood has fallen below 50%, indicating a more stable economic forecast for the West Chester area.

The concern regarding rising unemployment rates is pertinent to its impact on the housing market. Yet, current projections are reassuring. While some job losses might occur, they are not expected to be severe enough to trigger a widespread wave of foreclosures or significantly destabilize the housing market.

To understand this better, it’s useful to look at historical data from Macrotrends and the Bureau of Labor Statistics. The current unemployment rate is close to historic lows. For context, the average unemployment rate since 1948 is 5.7%, and it peaked at 8.3% during the 2008 crisis. Today’s figures are substantially lower than these historical benchmarks, indicating a stronger employment landscape.

Future projections suggest that the unemployment rate will likely stay below the 75-year average, a positive sign for the housing market in West Chester, PA. This implies a low risk of a housing market crash due to a surge in foreclosures.

For sellers, the situation is favorable. Homes in West Chester are selling quickly, often within a week of listing, provided they are well-marketed and priced appropriately. Prices have risen by 13% in the past two years through November, and the trend is expected to continue due to the limited housing inventory, which currently stands at a 3-4 month supply.

For buyers, especially those upgrading their homes, finding the right property requires a skilled realtor, especially in this competitive market. I have a strategy just for move up buyers that works successfully and avoids the risk of not finding that house that you will love.

For first-time buyers, while higher mortgage rates may be a concern, there are innovative strategies to manage this challenge. With house prices predicted to keep rising in the coming years, now is an opportune time to enter the market.

In summary, the West Chester, PA real estate market stands resilient and strong, even amidst economic uncertainties. Most economists now discount the likelihood of an imminent recession and do not anticipate a significant rise in unemployment leading to a housing market downturn. For those concerned about unemployment and its effect on the West Chester housing market, it’s an excellent time to seek expert advice and explore local real estate opportunities.

here is what you need to do to make the right decision for you

  • Buyers: If you’ve been holding off on buying because you were worried the value of your home would go down, knowing home prices are stable and increasing is reasuring. It also gives you the opportunity to own something that usually becomes more valuable as time goes on.
  • Sellers: If you’ve been waiting to sell your house because you were concerned about how changing home prices would affect its value, this should also reassure you. Even with the recent increase in mortgage rates, teaming with a real estate agent and getting your house on the market is the logical and smartest thing to do.
  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move. I would like to become that real estate expert upon whom you can lean.
  • Let’s connect on the computer and have a virtual meeting. That is a great way to learn and see if I am the person you would like to do business with. Just call or text to 484-574-4088 or email to john@johnherreid.com
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is changing, 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.
  • 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. Again we can do that in person or on the computer.
  • 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 clear opportunities for sellers right now. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect on Zoom, in person or on the phone at 484 574 4088.

MEDIA, PA REAL ESTATE MARKET: RESILIENT IN THE FACE OF UNCERTAINTLY

Media, PA Real Estate Market: Resilient in the Face of Uncertainty

In Media, PA, the real estate market is a hot topic for both buyers and sellers. Amidst widespread concerns about a potential recession and its effects on the economy, it’s natural to wonder how this might impact the housing market in our charming Pennsylvania town.

Recent discussions have centered around the possibility of a recession, and the fears that come with it, such as rising unemployment rates and the specter of foreclosures reminiscent of those seen 15 years ago. However, the narrative is changing, and there’s a growing sense of optimism.

A pivotal report from the Wall Street Journal’s Economic Forecasting Survey highlights this shift in perspective. Less than half of economists (48%) now predict a recession within the next year. This marks a significant drop from the 54% average in July and is the first time in over a year that the probability has dipped below 50%. This growing optimism among experts suggests a more stable economic outlook for the Media area.

The concern of rising unemployment rates naturally extends to its potential impact on the housing market. However, current projections offer a reassuring picture. Data indicates that while some job losses may occur, they are unlikely to reach a magnitude that would trigger a widespread wave of foreclosures or destabilize the housing market significantly.

It’s essential to understand this in the context of historical data from Macrotrends and the Bureau of Labor Statistics. The current unemployment rate is near historic lows. To put it in perspective, the average unemployment rate since 1948 is 5.7%, and during the 2008 financial crisis, it rose to 8.3%. Today’s figures are considerably lower than these benchmarks, suggesting a more robust employment landscape.

Looking ahead, projections indicate that the unemployment rate will likely remain below the 75-year average. This is an encouraging sign for the housing market in Media, PA, suggesting that the risks of a housing market crash caused by a wave of foreclosures are low.

What does this mean for sellers? Houses are selling rapidly in Media for prices that are making sellers happy.

  • Only about a week on the market until there is an agreement of sale, if the house is well marketed and well priced. If you are thinking about selling, this is very good news.
  • Prices continue to go up, 13% in the last two years, through November.
  • Will this continue, yes I think it will because there are very few houses on the market. Only a 3-4 month inventory.

What does this mean for buyers?

  • If you are a move up buyer, you will need a good realtor to make sure you can find the house you want to move into. I have a strategy that has worked well for move up buyers in this tight market. It will work for  yiou and I would love to share it with you.
  • If you are a first time buyer, the hgher mortgage rates have no doubt got you concerned. However there are inventive ways to manage this and again I would love to share them with you.
  • House prices are forecast to continue to go up for the next several years so the best time to make that move is now.

In summary, the Media, PA real estate market remains strong and resilient, even in the face of economic uncertainties. Most economists no longer anticipate a recession in the near future, nor do they foresee a dramatic spike in unemployment leading to widespread foreclosures and a housing market collapse. For those with questions about unemployment and its impact on the housing market in Media, PA, it’s a great time to seek expert advice and explore the opportunities in our local real estate landscape.

here is what you need to do to make the right decision for you

  • Buyers: If you’ve been holding off on buying because you were worried the value of your home would go down, knowing home prices are stable and increasing is reasuring. It also gives you the opportunity to own something that usually becomes more valuable as time goes on.
  • Sellers: If you’ve been waiting to sell your house because you were concerned about how changing home prices would affect its value, this should also reassure you. Even with the recent increase in mortgage rates, teaming with a real estate agent and getting your house on the market is the logical and smartest thing to do.
  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move. I would like to become that real estate expert upon whom you can lean.
  • Let’s connect on the computer and have a virtual meeting. That is a great way to learn and see if I am the person you would like to do business with. Just call or text to 484-574-4088 or email to john@johnherreid.com
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is changing, 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.
  • 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. Again we can do that in person or on the computer.
  • 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 clear opportunities for sellers right now. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect on Zoom, in person or on the phone at 484 574 4088.

STEADY GROWTH AMID SEASONALITY: WEST CHESTER, PA HOME PRICES CONTINUE UPWARD TREND

Steady Growth Amid Seasonality: West Chester, PA Home Prices Continue Upward Trend

As residents of West Chester, PA search for clarity amid conflicting reports on home prices, it’s essential to cut through the noise and understand the real trends at play. The narrative that home prices are plummeting is a misinterpretation of the current market dynamics. In truth, the West Chester area is experiencing a healthy progression in home values.

Understanding the Seasonal Nature of Home Prices

West Chester’s real estate market, like many others, experiences its own seasonal rhythms. Springtime blooms not just with flowers but with heightened home-buying activity, propelling prices upward. The momentum usually carries into the summer before calming down with the arrival of autumn’s cooler winds. This pattern is a dance of supply and demand, with prices naturally appreciating most during the high-demand spring and summer months.

However, month over month sales prices are an unreliable guide to the actual market trend.  A much better lnger term indicator is year over year which compares data for this month with the same month for last year. Please check the below chart.

MEDIAN SALES PRICES, WEST CHESTER AREA, SINGLE FAMILY DETACHED, 2021 THRU 10/2023
Month Sale Price Sale Price Sale Price
2021 2022 2023
Jan $525,000 $565,000 $636,500
Feb $577,000 $554,000 $620,000
Mar $557,188 $635,000 $671,500
Apr $557,500 $685,600 $660,750
May $591,820 $657,000 $705,500
Jun $575,000 $687,977 $731,750
Jul $642,500 $675,000 $711,000
Aug $604,000 $647,500 $702,000
Sep $575,000 $637,401 $700,000
Oct $580,000 $605,000 $684,500
Nov $550,000 $599,500
Dec $610,000 $590,000
Annual Average $578,751 $628,248
Difference $49,498
% Difference 8.6%
Annual Thru October $584,445 $642,720 $687,444
Difference $58,274 $44,725
% Difference 10.0% 7.0%
Year over Year Positive, 10 of 12 months from 2021 to 2022
Year over Year Positive, 9 of 10 months from 2022 to 2023, Year to Date
Overall assessment, strong selling price growth is continuing.

 

Dispelling Misconceptions and Media Misinterpretations

National headlines, or sometimes even local stories may sometimes paint a picture of declining prices, but this is a misreading of a market that is simply recalibrating to a more regular rhythm of growth. As West Chester residents, it’s prudent to look beyond sensational headlines and seek insights from local real estate professionals who understand the nuances of our community’s market.

For example, in 2022, month over month home sales prices were lower in four of the last five months. But the longer term more reliable data was the annual figures which showed robust growth.  A similar pattern is developing in 2023  but the year over year figures show solid growth.

The Reality of Home Prices in West Chester, PA.

As the year progresses, it’s normal for the rate of home price growth to decelerate, or even go down a little bit. But this is not indicative of an overall downturn. In West Chester, homes are continuing to appreciate in value, just at a rate that reflects the natural seasonal cycle.

here is what you need to do to make the right decision for you

  • Buyers: If you’ve been holding off on buying because you were worried the value of your home would go down, knowing home prices are stable and increasing is reasuring. It also gives you the opportunity to own something that usually becomes more valuable as time goes on.
  • Sellers: If you’ve been waiting to sell your house because you were concerned about how changing home prices would affect its value, this should also reassure you. Even with the recent increase in mortgage rates, teaming with a real estate agent and getting your house on the market is the logical and smartest thing to do.
  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move. I would like to become that real estate expert upon whom you can lean.
  • Let’s connect on the computer and have a virtual meeting. That is a great way to learn and see if I am the person you would like to do business with. Just call or text to 484-574-4088 or email to john@johnherreid.com
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is changing, 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.
  • 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. Again we can do that in person or on the computer.
  • 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 clear opportunities for sellers right now. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect on Zoom, in person or on the phone at 484 574 4088.

WEALTHY IN WEST CHESTER, PA; OWNING YOUR HOME MAKES ALL THE DIFFERENCE

WEALTHY IN WEST CHESTER, PA; OWNING YOUR HOME MAKES ALL THE DIFFERENCE

If you’re a resident of the charming town of West Chester, PA, you’re probably aware of the unique blend of historic beauty and modern convenience that makes this place so special. Nestled in the heart of Chester County, West Chester is not just a great place to live but also a smart place to invest in homeownership. In this article, we’ll explore how owning your home in West Chester is the key strategy for most people for building wealth in our community.

Why West Chester, PA is a Wealth-Building Haven

West Chester, PA, is more than just a picturesque town; it’s a community that offers a wealth of opportunities for those who choose to call it home. Here are some compelling reasons why owning a piece of West Chester real estate can set you on the path to financial success:

Steady Property Appreciation: West Chester’s real estate market has shown consistent growth over the years. Owning a home here means you’re likely to see your property’s value appreciate steadily over time, providing you with a solid return on your investment. For example, please check out this chart to show how  your wealth would have built up in you bought the median priced home just five years ago.

CHESTER COUNTY, ESTIMATED EQUITY GROWTH, LAST FIVE YEARS
Purchase Sale Price Down Payment Estimated Total Price Growth Estimated Total Equity Equity, %
Year Median at 3.5% Closing Costs Equity to 12/22 Pay Down of Sale Price
2017 $380,000 $13,300 $30,400 $160,000 $63,333 $236,633 62%
2018 $399,000 $13,965 $31,920 $141,000 $53,200 $208,165 52%
2019 $405,000 $14,175 $32,400 $135,000 $40,500 $189,675 47%
2020 $440,000 $15,400 $35,200 $100,000 $29,333 $144,733 33%
2021 $499,000 $17,465 $39,920 $41,000 $16,633 $75,098 15%
2022 $540,000 $18,900 $43,200 $0 $0 $18,900 4%

 

Take a look at the top row, in bold blue italics. If you bought the median priced house in 2017 for $380,000 and a minimum down payment of 3.5%, your total closing costs would have been about $30,400.  After 5 years, that same median priced house is priced at $540,000. That means your equity just due to the value increase is $160,000. You have also been paying your mortgage down for 5 years resulting in a balance reduction of $63,333.  Your total equity then comes to $236,633 or 62% of the initial cost of the house. Your investment of $30,400 grew to $236,633 which is a 778% gain. 

That is why real estate has been ranked as the #1 investment opportunity in the United States for several years running.

Local Economy: West Chester boasts a strong local economy with diverse industries, including education (West Chester University), healthcare, and technology. With numerous employment opportunities in the area, you’ll have the financial stability needed to build wealth through homeownership.

Historic Charm and Community Spirit: West Chester is known for its vibrant community and historic charm. This attracts not only residents but also tourists.

Educational Opportunities: The presence of West Chester University adds to the town’s allure. Whether you’re looking to further your education or invest in properties for student housing, the university’s presence can be a significant advantage.

Higher Interest Rates: True, interest rates have risen dramatically from about 3% to as high as 8%. However, even with this headwind, home prices are predicted to keep on rising so it’s still an opportune time to buy a home in West Chester. Your payments will be higher but you still start building equity right away.

Tax Benefits: As a homeowner in West Chester, you can benefit from various tax incentives and deductions, which can help you save money and grow your wealth over time.

Community Involvement: Being part of the West Chester community means you have the opportunity to engage in local events and initiatives, which can enhance your sense of belonging and connection to your neighborhood.

Steps to Owning Your Home in West Chester

Now that you understand the potential wealth-building benefits of owning a home in West Chester, it’s time to take action. Here are some steps to help you get started on your homeownership journey:

Financial Preparation: Assess your financial situation and create a budget to determine how much you can comfortably afford for your new home. Consider saving for a down payment, as a larger down payment can lead to lower monthly mortgage payments.

Research Local Real Estate: Work with a local real estate agent who knows the West Chester market inside and out. They can help you find the right neighborhood and property that fits your budget and goals.

Mortgage Pre-Approval: Get pre-approved for a mortgage to show sellers that you’re a serious buyer. This can give you a competitive edge in a hot market.

Home Inspection: Once you find a property you love, work with your realtor to decide if you need to inspect the house or if competitive conditions dictate that you should make your offer with no inspection.

Closing the Deal: Work closely with your real estate agent and lender to complete the necessary paperwork and finalize your purchase.

By following these steps and embracing the wealth-building opportunities that West Chester, PA, has to offer, you can secure your financial future while enjoying all the benefits of living in this wonderful community. Owning your home in West Chester isn’t just about having a place to live—it’s about investing in your future and building wealth right here in our beautiful town. Don’t miss out on the opportunity to make West Chester, PA, your home and your key to financial success.

here is what you need to do to make the right decision for you

  • Buyers: If you’ve been holding off on buying because you were worried the value of your home would go down, knowing home prices are stable and increasing is reasuring. It also gives you the opportunity to own something that usually becomes more valuable as time goes on.
  • Sellers: If you’ve been waiting to sell your house because you were concerned about how changing home prices would affect its value, this should also reassure you. Even with the recent increase in mortgage rates, teaming with a real estate agent and getting your house on the market is the logical and smartest thing to do.
  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move. I would like to become that real estate expert upon whom you can lean.
  • Let’s connect on the computer and have a virtual meeting. That is a great way to learn and see if I am the person you would like to do business with. Just call or text to 484-574-4088 or email to john@johnherreid.com
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is changing, 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.
  • 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. Again we can do that in person or on the computer.
  • 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 clear opportunities for sellers right now. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect on Zoom, in person or on the phone at 484 574 4088.

 

UNDERSTANDING WEST CHESTER, PA HOME PRICES: INSIGHTS BEYOND THE HEADINES

Understanding West Chester, PA Home Prices: Insights Beyond the Headlines

As a West Chester, PA local, you’ve likely heard whispers at the corner café or seen bold headlines online predicting a downturn in home prices. You may have encountered some conversations at the neighborhood park or scrolled past doomsday predictions on your social media feed. It’s hard not to wonder if a housing slump is on the horizon for our charming borough.

But before you let those rumors influence your perspective on West Chester, PA home prices, it’s crucial to take a closer look at the data and expert analysis that provide a clearer picture of the real estate landscape.

The Misconception of Falling Home Prices

The buzz around declining home prices has been persistent. Influencers and news outlets often seize upon this narrative, amplifying fears that can overshadow the real story. Fannie Mae’s recent survey highlighted that a significant portion of Americans are bracing for a decrease in home values over the next year. But is this sentiment in line with reality, especially in our vibrant community of West Chester, PA?

The fact is, the media’s portrayal of a collapsing market doesn’t quite hold up against the scrutiny of industry professionals who eat, sleep, and breathe real estate trends. They’re the first to acknowledge that while the national market experienced a modest dip late last year, it was a brief ebb in an otherwise resilient trend.

West Chester, PA: A Market Rebounding with Confidence

West Chester’s housing market, much like the national trend, has shown remarkable elasticity. While nationwide figures can offer a broad stroke, local expertise is where the true narrative unfolds. In West Chester, PA, the enduring appeal of our community – with its vibrant downtown, excellent schools, and rich history – continues to underpin a robust housing market.

Recent local data indicates that not only have prices stabilized, but we are witnessing a gradual uptrend as we advance through the year. Contrary to the one-size-fits-all forecasts, West Chester’s unique market dynamics continue to attract buyers, signaling a healthy demand that underpins property values.

For backup to this opinion, please check out this chart of median home prices in the West Chester area over the last three years.

Westchester Area, Median Sale Price, Single Family, Jan 2021 through Sep 2023
Month Sale Price Sale Price Difference % Diff Sale Price Difference % Diff
2021 2022 22-21 2023 23-22
Jan $525,000 $565,000 $40,000 7.6% $636,500 $71,500 12.7%
Feb $577,000 $554,000 ($23,000) -4.0% $620,000 $66,000 11.9%
Mar $557,188 $635,000 $77,812 14.0% $671,500 $36,500 5.7%
Apr $557,500 $685,600 $128,100 23.0% $660,750 ($24,850) -3.6%
May $591,820 $657,000 $65,180 11.0% $705,500 $48,500 7.4%
Jun $575,000 $687,977 $112,977 19.6% $731,750 $43,773 6.4%
Jul $642,500 $675,000 $32,500 5.1% $711,000 $36,000 5.3%
Aug $604,000 $647,500 $43,500 7.2% $702,000 $54,500 8.4%
Sep $575,000 $637,401 $62,401 10.9% $700,000 $62,599 9.8%
Oct $580,000 $605,000 $25,000 4.3% $684,500 $79,500 13.1%
Nov $550,000 $599,500 $49,500 9.0%
Dec $610,000 $590,000 ($20,000) -3.3%
Annual $578,751 $628,248 $49,498 8.6%
YTD, thru Aug $578,501 $634,948 $56,447 9.8% $682,350 $47,402 7.5%
Sumary: Year over Year Sales Price Up 10 of 12 months, 2022 to 2021
Year over Year Sales Price Up 9 of 10 months, 2023 to 2022
Prices still steady and going up in the West Chester Area.
Areas included, Westchester, Downingtown, Great Valley

 

What are the implications from these data?

For First Time Home Buyers,  concerned about possible falling prices.  Chances are excellent that if you buy now, the value of your new house will continue to go up.

For Sellers/Move Up Buyers – if your family needs a different house because of changing conditions, make the move now. Houses are selling fast if they are properly marketed and priced. And values in West Chester are forecast to go up.

Forecasting Beyond the Fear

It’s intriguing to note that even Fannie Mae revised their forecast from a conservative 3.9% appreciation to a more optimistic 6.7% for the current year. This upward adjustment isn’t a mere statistical blip; it’s a testament to the underlying confidence experts have in the housing market’s resilience.

West Chester’s Local Expertise: Your Compass in the Housing Market

For those residing in West Chester, PA, or considering joining our community, it’s essential to look beyond the alarmist headlines. Engaging with local real estate professionals who are deeply entrenched in the day-to-day dynamics of our market will offer the most accurate and pertinent insights into home prices.

Bottom Line: Seek Trusted Sources

In a world where everyone has an opinion and a platform to share it, discernment becomes your most valuable tool. For those concerned or curious about West Chester, PA home prices, it’s wise to consult those with a finger on the pulse of our local market. The data is clear: the narrative of plummeting home prices doesn’t hold up here.

If you’re in need of reliable, data-driven, and locally informed real estate advice, reach out to the experts who specialize in our area. Together, we can navigate the market, ensuring that you’re making decisions based on facts, not fear.

here is what you need to do to make the right decision for you

  • Buyers: If you’ve been holding off on buying because you were worried the value of your home would go down, knowing home prices are stable and increasing is reasuring. It also gives you the opportunity to own something that usually becomes more valuable as time goes on.
  • Sellers: If you’ve been waiting to sell your house because you were concerned about how changing home prices would affect its value, this should also reassure you. Even with the recent increase in mortgage rates, teaming with a real estate agent and getting your house on the market is the logical and smartest thing to do.
  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move. I would like to become that real estate expert upon whom you can lean.
  • Let’s connect on the computer and have a virtual meeting. That is a great way to learn and see if I am the person you would like to do business with. Just call or text to 484-574-4088 or email to john@johnherreid.com
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is changing, 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.
  • 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. Again we can do that in person or on the computer.
  • 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 clear opportunities for sellers right now. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect on Zoom, in person or on the phone at 484 574 4088.

WEST CHESTER, PA – BUILD FAMILY WEALTH THROUGH HOME OWNERSHIP

WEST CHESTER, PA – BUILD FAMILY WEALTH THROUGH HOME OWNERSHIP

Here are the main factors that make residential real estate the most important investment most people ever make.  We will explore every one in this article

  • Home values have been steadily increasing over the past 60 years, providing an opportunity for homeowners to build equity.
  • Rent prices are consistently rising, making homeownership a more appealing option than renting.
  • Home prices have seen dramatic increases and slight declines in the past year but are now appreciating at a more normal pace.
  • Low inventory of homes on the market is leading to fewer choices for buyers and resulting in faster sales, multiple offers, and potentially higher sale prices for sellers.
HOME VALUES HAVE BEEN STEADILY INCREASING OVER THE PAST 60 YEARS

Homeownership is a powerful wealth-building tool, offering several significant financial advantages. Firstly, as a homeowner, you enjoy potential capital gains as your property value appreciates over time. This can significantly contribute to your net worth. Secondly, monthly mortgage payments often replace rent, and these payments can act as a form of forced savings as you gradually own more of your property. This contributes to building equity that can be leveraged in the future for financial needs. Lastly, homeownership comes with tax benefits, such as the potential to deduct mortgage interest and property tax payments. These factors combine to make homeownership a financially savvy move.

Check out this graph for the long term trend.  The only downtrend was in the 2008-2013 time frame when the federal government mandated that sub prime mortgages be granted to people who had poor credit.

Over the long term, homeownership can prove to be a highly beneficial financial strategy. One advantage is the potential for substantial appreciation in property value, a trend that has been consistent throughout history. This not only contributes to overall wealth, but also offers opportunities for refinancing or drawing on home equity in times of need. Furthermore, the fixed-rate mortgage payments act as a hedge against inflation, keeping housing costs stable while rents may increase over time. Lastly, owning a home can also be a part of a well-rounded retirement plan. Once the mortgage is fully paid off, housing costs are significantly reduced, and the home can even be sold as a part of a downsizing strategy, potentially adding a significant sum to your retirement nest egg. In essence, homeownership can be a powerful tool for financial planning and long-term wealth generation.

For an actual example, consider the below chart which shows actual wealth buildup if a person bought a median priced house in West Chester in 2014 and held it until 2023.

MEDIAN SALES PRICE, WEST CHESTER AREA, SINGLE FAMILY
Primary Year Sale Price, Median Annual % Change Cumulative % Change Equity Buildup.
2014 $415,000
2015 $417,500 0.6% 0.6% $2,500
2016 $423,500 1.4% 2.0% $8,500
2017 $441,000 4.1% 6.3% $26,000
2018 $469,900 6.6% 13.2% $54,900
2019 $480,000 2.1% 15.7% $65,000
2020 $510,000 6.3% 22.9% $95,000
2021 $580,000 13.7% 39.8% $165,000
2022 $640,000 10.3% 54.2% $225,000
2023 $693,000 8.3% 67.0% $278,000
West Chester, Downingtown and Great Valley School Districts
All Positive Years since 2014
Trend Expected to Continue
Assume 10% Down in 2014, Mortgage Amount = $373,500
Interest Rate = 7%
% of Principal Remaning After 9 Years 88%
Amount Remaining After 9 Years $329,147
Principal Reduction $44,353
Total Equity (Net Worth) Increase $322,353

As you can see, the wealth improvement of $322,353 in this example is composed of the value increase of the home  ($278,000), plus the reduction in the remaining mortage balance ($44,353).

RENT PRICES ARE CONSISTENTLY RISING MAKING HOMEOWNERSHIP  MORE APPEALING

In comparison to homeownership, renting offers its own unique set of benefits and drawbacks. From a financial perspective, renters often have lower monthly costs and aren’t responsible for maintenance or repair expenses, providing greater budget flexibility. Renting also offers more geographical mobility for those who aren’t locked into a long-term location due to career or lifestyle. On the downside, renters don’t accumulate equity and don’t enjoy the potential capital appreciation that homeowners do. They are also subject to annual rent increases and have less control over their living space.

Consider this graph of rent increases over time.

In contrast, homeownership provides a long-term investment and opportunity to build equity. However, it also involves higher upfront costs, ongoing maintenance responsibilities, and less flexibility to move. In essence, the decision between renting and homeownership largely depends on individual financial circumstances, lifestyle preferences, and long-term goals. But if you can swing it, owning your own home has humungous financial benefts (in this case $322,353) as opposed to renting which has a financial benefit of absolute ZERO!!!!!

And the basic question is this. To whose wealth do you want to contribute? Yours or your landlord ? I think know which one you should pick.

HOME PRICES HAVE SEEN DRAMATIC INCREASES AND SLIGHT DECLINES IN THE PAST YEAR, BUT ARE NOW APPRECIATING AT A MORE NORMAL PACE

The current surge in home prices is largely attributed to a dynamic interplay of supply and demand factors. On the supply side, there’s a noticeable shortage of homes available for sale. Furthermore, the demographic shift characterized by millennials entering their prime home-buying years has fueled demand. Additionally, the ongoing pandemic has underscored the value of homeownership, leading more people to aspire for their own space. These factors combined create a sellers’ market where the demand for houses outstrips supply, causing a surge in home prices.

LOW INVENTORY OF HOMES MEANS FEWER CHOICES FOR BUYERS AND HIGHER PRICES FOR SELLERS

In a low inventory market, selling your property can be a strategic move, especially if you’re considering moving to a higher-priced home. Firstly, you’re likely to sell your current home at a competitive price due to high demand and low supply. Consider the below graph which shows supply of homes for sale.

Secondly, while prices for higher-end homes may also be inflated, typically, the rate of price appreciation is slower for more expensive homes. This disparity in price growth rates between lower and higher-priced properties means that the ‘price gap’ between your current home and your next, more expensive home could be narrowing. Thus, upgrading to a more expensive home in a low inventory, high demand market might not be as financially demanding as it would be in a balanced market.

here is what you need to do to make the right decision for you

  • Buyers: If you’ve been holding off on buying because you were worried the value of your home would go down, knowing home prices are stable and increasing is reasuring. It also gives you the opportunity to own something that usually becomes more valuable as time goes on.
  • Sellers: If you’ve been waiting to sell your house because you were concerned about how changing home prices would affect its value, this should also reassure you. Even with the recent increase in mortgage rates, teaming with a real estate agent and getting your house on the market is the logical and smartest thing to do.
  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move. I would like to become that real estate expert upon whom you can lean.
  • Let’s connect on the computer and have a virtual meeting. That is a great way to learn and see if I am the person you would like to do business with. Just call or text to 484-574-4088 or email to john@johnherreid.com
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is changing, 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.
  • 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. Again we can do that in person or on the computer.
  • 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 clear opportunities for sellers right now. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect on Zoom, in person or on the phone at 484 574 4088.

 

WEST CHESTER, PA – WHY OWNING A HOME IS A SMART INVESTMENT

WEST CHESTER, PA – WHY OWNING A HOME IS A SMART INVESTMENT

As the world comes out of the COVID-19 pandemic, many people are looking to invest their money in ways that are safe and secure. One investment that experts predict will see positive growth is homeownership. In this blog post, we’ll explore why owning a home is a smart investment in 2023, and we’ll look at some of the key factors driving positive growth in home prices. We’ll also examine the benefits of owning a home, including the potential for appreciation and long-term equity growth, tax benefits, and more. Finally, we’ll offer some practical tips for successful homeownership and explain how growing home equity can positively affect your net worth.

Key Factors Driving Positive Growth in Home Prices

The housing market is constantly fluctuating, and this year has been no exception. Earlier forecasts predicted that prices would remain stagnant or even fall, but recent data from six organizations and a survey of 100 economists, investment strategists, and housing market analysts suggest otherwise. The results indicate that prices will see a positive growth of around 3.3%. It just proves that sometimes, even the experts’ predictions can be wrong. The good news is that the market is expected to remain steady and even outperform previous expectations. So, whether you’re a buyer, seller or just interested in the housing market, it’s always good to keep an eye on the trends and be prepared for any changes that might come your way.

Why Is This So? Two Reasons:

  • There are few homes for sale and
  • There are more buyers than sellers which means that homes will sell in about a week if they are properly marketed and priced.

Benefits of Owning a Home

Owning a home isn’t just about having somewhere to live. It also offers significant financial benefits. For example, you can deduct your mortgage interest and property taxes from your federal income taxes, resulting in significant savings. Additionally, owning a home offers the potential for appreciation and long-term equity growth. In other words, as your home increases in value over time, your net worth will increase as well. Owning a home also provides a sense of security and stability, as you have control over your living space and don’t have to worry about a landlord raising your rent or asking you to move out.

How Home Equity Affects Net Worth

Home equity is the difference between the current market value of your home and the amount you owe on your mortgage. As you pay down your mortgage and your home increases in value, your home equity increases as well. This can positively affect your net worth, which is the total value of your assets (including your home) minus your liabilities (such as your mortgage and other debts). For example, if your home increases in value by $50,000 over five years, and you pay off $20,000 of your mortgage during that time, your net worth will have increased by $70,000. As you can see, growing your home equity is an excellent way to increase your net worth over time.

For real live examples, check out this chart of median sales prices in the West Chester area:

MEDIAN SALES PRICE, WEST CHESTER AREA, SINGLE FAMILY
Primary Year Sale Price, Median Annual % Change Cumulative % Change Equity Buildup.
2014 $415,000
2015 $417,500 0.6% 0.6% $2,500
2016 $423,500 1.4% 2.0% $8,500
2017 $441,000 4.1% 6.3% $26,000
2018 $469,900 6.6% 13.2% $54,900
2019 $480,000 2.1% 15.7% $65,000
2020 $510,000 6.3% 22.9% $95,000
2021 $580,000 13.7% 39.8% $165,000
2022 $640,000 10.3% 54.2% $225,000
2023 $693,000 8.3% 67.0% $278,000
West Chester, Downingtown and Great Valley School Districts
All Positive Years since 2014
Trend Expected to Continue

In nine years after buying the median priced house in the West Chester area, the equity build up from value increases alone is $278,000.

And that performance is also very safe. I also see this trend continuing over time.

here is what you need to do to make the right decision for you

  • Buyers: If you’ve been holding off on buying because you were worried the value of your home would go down, knowing home prices are stable and increasing is reasuring. It also gives you the opportunity to own something that usually becomes more valuable as time goes on.
  • Sellers: If you’ve been waiting to sell your house because you were concerned about how changing home prices would affect its value, this should also reassure you. Even with the recent increase in mortgage rates, teaming with a real estate agent and getting your house on the market is the logical and smartest thing to do.
  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move. I would like to become that real estate expert upon whom you can lean.
  • Let’s connect on the computer and have a virtual meeting. That is a great way to learn and see if I am the person you would like to do business with. Just call or text to 484-574-4088 or email to john@johnherreid.com
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is changing, 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.
  • 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. Again we can do that in person or on the computer.
  • 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 right now. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect.

 

WESTCHESTER AREA, WHY NOW IS A GREAT TIME FOR HOME SELLERS

WESTCHESTER AREA, WHY NOW IS A GREAT TIME FOR HOME SELLERS

Price levels for residential real estate in the Westchester area  have been very stable and increasing in recent years. As of late, the market has seen a dramatic increase in home prices. This upswing in home values has an incredible benefit for home sellers. With the increased demand for homeownership and the lack of supply in our current housing market, now is the best time to take advantage of this seller’s market.

Increased Home Prices
The continuous increase in home prices is a primary indicator that the housing market is thriving. Buyers are willing to pay more for a home, making this the best time for sellers to make an excellent profit. Homeowners who have been on the market for extended periods will appreciate the unexpected price increases, no matter how small or large. While some sellers might worry about overpriced homes that don’t sell, it’s a challenge for any market. As long as the asking price is realistic, sellers can be assured that buyers will show interest.

Please check out the below chart for the recent history of home value increases in the Westchester area.

Westchester Area, Median Sale Price, Single Family Houses, 2021 through 2023
Month Sale Price Sale Price Difference % Diff Sale Price Difference % Diff
2021 2022 22-21 2023 23-22
Jan $411,000 $450,000 $39,000 9.5% $447,500 ($2,500) -0.6%
Feb $430,000 $453,275 $23,275 5.4% $467,450 $14,175 3.1%
Mar $466,403 $480,000 $13,597 2.9% $480,000 $0 0.0%
Apr $446,551 $490,000 $43,449 9.7% $528,420 $38,420 7.8%
May $478,700 $495,000 $16,300 3.4% $525,000 $30,000 6.1%
Jun $466,150 $540,000 $73,850 15.8% $540,388 $388 0.1%
Jul $449,050 $535,000 $85,950 19.1% $507,000 ($28,000) -5.2%
Aug $470,674 $482,500 $11,826 2.5%
Sep $453,614 $465,000 $11,386 2.5%
Oct $460,000 $490,000 $30,000 6.5%
Nov $449,385 $485,000 $35,615 7.9%
Dec $455,500 $435,000 ($20,500) -4.5%
Annual $453,086 $483,398 $30,312 6.7%
YTD, July $449,693 $491,896 $42,203 9.4% $499,394 $7,498 1.5%
Sumary:  Year over Year Sales Price Up 11 of 12 months, 2022 to 2021
Year over Year Sales Price Up 5 of 7 months, 2023 to 2022
Prices still steady and going up in the West Chester Area. 
Areas included, Westchester, Downingtown, Great Valley

 

As you can see, prices are still on the rise in our area. And with low inventories, houses are selling quickly, usually in about a week or less. That is good news for buyers looking for the best way to  build family wealth.

High Interest Rates
One hurdle for homebuyers is the recent dramatic rise in interest rates from about 3-4% up to 7% and higher. However, home prices are stable and rising in the area. I advise people who can make the purchase to do it now so that they start to realize the immediate appreciation in the value of their home.

High Demand
The demand for homes is on the rise with more Gen Z and Millennials leaving apartments to start families or search for more extensive living spaces for remote work purposes. A high demand means a higher chance for a bidding war, driving up home prices and increasing the home seller’s profit margins. With remote work becoming more common, families are searching for larger homes or better spaces suited for a work-from-home environment, driving the market even more.

Easy Listing and Closing Processes
Real estate agencies are streamlining the selling process by listing homes in more traditional ways like architectural listings or on MLS platforms. Selling a house no longer requires significant efforts from the homeowners dealing with the stresses of repairs, staging, and accompanied showings. The market’s high demand is also making the closing process more efficient, with fewer contingencies and shorter closing periods.

Conclusion:
With all the above indications, this is undoubtedly the best time for homeowners to sell their homes in this seller’s market. Homeowners are presented with a unique opportunity to list properties and make a lucrative profit. The increase in home prices,  high demand, and efficient selling processes all point to a robust market set up for those intending to sell their homes. Homeowners looking to profit from their current homes should take advantage of this seller’s market by contacting a trusted real estate agent today.

here is what you need to do to make the right decision for you

  • Buyers: If you’ve been holding off on buying because you were worried the value of your home would go down, knowing home prices are stable and increasing is reasuring. It also gives you the opportunity to own something that usually becomes more valuable as time goes on.
  • Sellers: If you’ve been waiting to sell your house because you were concerned about how changing home prices would affect its value, this should also reassure you. Even with the recent increase in mortgage rates, teaming with a real estate agent and getting your house on the market is the logical and smartest thing to do.
  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move. I would like to become that real estate expert upon whom you can lean.
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is changing, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • There are plenty of buyers out there right now trying to find a home that fits their needs. That’s because the job market is strong, and many people have the stable income needed to seriously consider homeownership. To put your house on the market and get in on the action, let’s connect.

HOW INFLATION AFFECTS HOME MORTGAGE RATES

HOW INFLATION AFFECTS  Real Estate Mortgage Rates

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

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

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

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

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

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

Mortgage rates are up a lot.

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

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

MEDIA, PA AREA; BAD REAL ESTATE NEWS IS PROBABLY WRONG

If you want more information about this topic just click on the hyperlinks in the article (the underlined blue print) to see more details.

If you’re thinking of buying or selling a home, one of the biggest questions you have right now is probably: what’s happening with home prices? And it’s no surprise you don’t have the clarity you need on that topic. Part of the issue is how headlines are talking about price. If you’re thinking of buying or selling a home, one of the biggest questions you have right now is probably: what’s happening with home prices? And it’s no surprise you don’t have the clarity you need on that topic. Part of the issue is how headlines are talking about prices.

They’re basing their negative news by comparing current stats to the last few years. But you can’t compare this year to the ‘unicorn’ years (when home prices reached record highs that were unsustainable). And as prices begin to normalize now, they’re talking about it like it’s a bad thing and making people fear what’s next. But the worst home price declines are already behind us. What we’re starting to see now is the return to more normal home price appreciation.

To help make home price trends easier to understand, let’s focus on what’s typical for the market and omit the last few years since they were anomalies. 

Let’s start by talking about seasonality in real estate. In the housing market, there are predictable ebbs and flows that happen each year. Spring is the peak homebuying season when the market is most active. That activity is typically still strong in the summer but begins to wane as the cooler months approach. Home prices follow along with seasonality because prices appreciate most when something is in high demand.

That’s why, before the abnormal years we just experienced, there was a reliable long-term home price trend. The graph below uses data from Case-Shiller to show typical monthly home price movement from 1973 through 2021 (not adjusted, so you can see the seasonality):

As the data from the last 48 years shows, at the beginning of the year, home prices grow, but not as much as they do entering the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months.  The market heats up in the Summer because families want to get their deals done before school starts. That raises the demand against a fixed supply and what always happens when demand goes up and supply is unchanged. PRICES GO UP!!!! Then, as fall and winter approach, demand eases off again. Price growth slows, but still typically appreciates.

WHY THIS IS SO IMPORTANT TO UNDERSTAND

In the coming months, as the housing market moves further into a more predictable seasonal rhythm, you’re going to see even more headlines that either get what’s happening with home prices wrong or, at the very least, are misleading. Those headlines might use a number of price terms, like:

  • Appreciation: when prices increase.
  • Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.
  • Depreciation: when prices decrease.

They’re going to mistake the slowing home price growth (deceleration of appreciation) that’s typical of market seasonality in the fall and winter and think prices are falling (depreciation). Don’t let those headlines confuse you or spark fear. Instead, remember it’s normal to see a deceleration of appreciation, slowing home price growth, as the months go by.

To see what is really happening in the Delaware county area, please check out the chart below.

DELAWARE COUNTY, MEDIAN SALES PRICE, SINGLE FAMILY HOMES
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% $400,000 ($3,500) -0.9%
Apr $400,000 $415,000 $15,000 3.8% $416,000 $1,000 0.2%
May $400,000 $427,000 $27,000 6.8% $480,758 $53,758 12.6%
Jun $410,000 $451,500 $41,500 10.1% $475,000 $23,500 5.2%
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%
YTD, June $378,992 $405,500 $26,508 7.0% $422,793 $17,293 4.3%

As shown by the data in blue, for ten of the twelve months in 2022, median prices were higher in the Delaware county area than in the same month in 2021.

This same trend was continued in 2023 for five  of the first six months.

Those data points tell us that the real estate market in the Delawre conty area is stable and strong!!!!

A headline seeker could say that in the first six months of 2022, prices went up by 7% and only 4.3% in 2023. That is called a deceleration of appreciation, but it is still appreciation.

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

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