WESTCHESTER, PA; UNDERSTANDING EQUITY IN HOME OWNERSHIP

UNDERSTANDING EQUITY IN HOME OWNERSHIP. WHY IT MATTERS

Owning a home is a significant accomplishment that comes with numerous benefits. However, one essential aspect of homeownership that often gets overlooked is equity. Building equity is crucial for homeowners since it can secure better mortgage rates, provide funds for a down payment, and increase the value of the home. Unfortunately, many homeowners don’t understand the concept of equity, let alone how to build it.

UNDERSTANDING EQUITY

Equity is the difference between the value of your home and the amount you owe on your mortgage. For instance, if your home is worth $500,000, and your mortgage balance is $300,000, your equity is $200,000. It’s important to note that equity is not the same as home value. Home value refers to the current worth of your property, while equity is an asset that has accumulated as you’ve paid off your mortgage over time. Equity plays a vital role in mortgage rates since lenders view borrowers with more equity as less risky and offer them lower rates. Moreover, homeowners with significant equity can sell their homes at a higher price.

THE BENEFITS OF EQUITY

Building equity has numerous benefits in homeownership. One of the primary advantages is that it can provide funds for a down payment when purchasing a new home. For example, if the value of your current home exceeds the mortgage balance, you can use the surplus equity to make a down payment on your new home. In addition, if you’re in a position to do so, purchasing a home in all cash can be a smart investment strategy, and equity can make that a viable option.

In the West Chester area, home values have been increasing rapidly. For instance, please check out the below chart which shows median sales prices for homes in the West Chester area over the last two and a half years.

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

If you bought a house just 2 and one half years ago for the median price of $453,086, you would have increased equity of almost $50,000. If you bought your house more earlier than 2021, you would have even more equity.

A CMA, (Comparative Market Analysis) is a report that provides homeowners with an  estimate of their home’s current value, the amount of equity, and how they can improve it. Obtaining a CMA is beneficial for homeowners who want to verify their property’s worth and understand their equity’s potential. It can also be used by homeowners who plan to sell their homes to determine a competitive price and ask for more in a home sale. If you would like a CMA for your house, please call or text me at 484 574 4088 or go on my web site at www.johnherreid.com and ask for a home value estimate.

Equity is a crucial aspect of homeownership that every homeowner should understand. Homeowners with more equity have more financial flexibility, including lower mortgage rates, funds for a down payment, and increased property value. By obtaining a CMA and making simple home improvements,  homeowners can boost their equity’s potential, secure their financial future, and grow their wealth. Taking small steps now can lead to tremendous gains over time, making it well worth the effort.

WHAT YOUR HOUSE REALLY REPRESENTS

For many homeowners, a house represents not just a place of shelter and refuge, but also a major investment. This is especially true for those who have built up significant home equity over time. However, with mortgage rates fluctuating and economic uncertainty looming, some homeowners may be questioning whether it’s time to cash out and sell their homes. While concerns about mortgage rates are understandable, homeowners also need to consider their overall net worth when making this decision. Selling a home can have a significant impact on a person’s financial situation, so it’s important to weigh all the options carefully.

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.

WEST CHESTER AREA, HOME PRICES, STILL STABLE AND GOING UP

In the West Chester area, home prices are still stable and going up despite what you hear if you’re following the news today. You may feel a bit unsure about what’s happening with home prices and fear whether or not the worst is yet to come. That’s because today’s headlines are painting an unnecessarily negative picture. If we take a year-over-year view, home prices did drop some, but that’s because we’re comparing to a ‘unicorn’ year when prices peaked well beyond the norm.

To avoid an unfair comparison to that previous peak, we need to look at monthly data. And that tells a very different and much more positive story. While local home price trends still vary by market, here’s what the national data tells us.

The graphs below use recent monthly reports from three sources to show the worst home price declines are already behind us, and prices are appreciating nationally.

Looking at this monthly view, we can see the past year in the housing market can be divided into two parts. In the first half of 2022, home prices were going up, and fast. However, starting in July, prices began to go down (shown in red in the graphs above). By around August or September, the trend started to stabilize. But, looking at the most recent data for early 2023, these graphs also show that prices are going up again.

The fact that all three reports show prices have been going up for three or more straight months is an encouraging sign for the housing market. The month-over-month data indicates a national shift is happening – home prices are rising again. Or in the case of the West Chester area, we never saw a decrease from which we had to recover. 

But national trends can have an impact on our local data, so lets see what the national data are showing.

Craig J. Lazzara, Managing Director at S&P Dow Jones Indices, says this about home price trends:

“If I were trying to make a case that the decline in home prices that began in June 2022 had definitively ended in January 2023, April’s data would bolster my argument.”

Experts believe one of the reasons prices didn’t crash like some expected is because there aren’t enough available homes for the number of people who want to buy them. Even with today’s mortgage rates, there are more people looking to buy than there are homes available for sale.

Mark Fleming, Chief Economist at First American, explains how more demand than supply keeps upward pressure on prices:

“History has shown that higher rates may take the steam out of rising prices, but it doesn’t cause them to collapse entirely. This is especially true in today’s housing market, where the demand for homes continues to outpace supply, keeping the pressure on house prices.”

Doug Duncan, Senior VP and Chief Economist at Fannie Mae, states home price growth is exceeding expectations thanks to that high demand:

“. . . housing prices continue to show stronger growth than what was previously expected . . . Housing’s performance is a testimony to the strength of demographic-related demand . . .”

NOW, HERE’S WHAT IS HAPPENING IN THE WEST CHESTER AREA

Please see the below chart for actual sales price data for the last 2 years and 6 months.

MEDIAN SALES PRICE, WEST CHESTER, DOWNINGTOWN, GREAT VALLEY
Month Sale Price Sale Price Difference % Diff Sale Price Difference % Diff
2021 2022 2022-2021 2023 2023-2022
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% $662,500 ($23,100) -3.4%
May $591,820 $657,000 $65,180 11.0% $705,500 $48,500 7.4%
Jun $575,000 $687,977 $112,977 19.6% $739,250 $51,273 7.5%
Jul $642,500 $675,000 $32,500 5.1%
Aug $604,000 $647,500 $43,500 7.2%
Sep $575,000 $637,401 $62,401 10.9%
Oct $580,000 $605,000 $25,000 4.3%
Nov $550,000 $599,500 $49,500 9.0%
Dec $610,000 $590,000 ($20,000) -3.3%
Annual $578,751 $628,248 $49,498 8.6%
Year to Date $630,763 $672,542 $44,294 7.0%
Highlights: Year over Year Sales Prices Higher in 10 of 12 months in 2022
Year over Year Sales Prices Higher in 5 of 6  months in 2023
Real Estate Prices still very strong in West Chester Area

Like I said above, we have never seen a decrease from which we had to recover. And I expect these bullish trends to continue.

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 have bounced back should bring you some relief. 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, it might be a good idea to team up with a real estate agent to list your house. You don’t have to wait any longer because the latest data suggests things are turning in your favor.
  • 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.

 

WEST CHESTER, DOWNINGTOWN, GREAT VALLEY, BEAT NATIONAL REAL ESTATE MARKET BY A LOT

If you’re following the news today, you may feel a bit unsure about what’s happening with home prices and fear whether or not the worst is yet to come. That’s because today’s headlines are painting an unnecessarily negative picture. Contrary to those headlines, home prices aren’t in a freefall. The latest data tells a very different and much more positive story. Local home price trends still vary by market, but here’s what the national data tells us.  More great news about local home prices later, but first here is a look at the national scene.

If we take a year-over-year view, home prices stayed positive – they just appreciated more slowly than they did at the peak of the pandemic. To get a more detailed picture of some of the trends in the market, we need to look at monthly data.

The monthly graphs below use recent reports from three sources to show that the worst home price declines are already behind us, and prices are on their way back up nationally.

The story this more detailed monthly view tells us is that the last year has been a tale of two halves in the housing market. In the first half of 2022, home prices were climbing, and they peaked in June. Then, in July, home prices started to decline (shown in red in the graphs above). And by roughly August or September, the trend began to stabilize. As we look at the most recent data for the early part of 2023, these graphs also show a recent rebound in momentum with prices ticking back up. Monthly changes in home prices are gaining steam as we move into the busier spring season.

While one to two months doesn’t make a trend, the fact that all three reports show prices have stabilized is an encouraging sign for the housing market. The month-over-month data conveys a clear, but early, consensus that a national shift is taking place today. In essence, home prices are starting to tick back up.

Andy Walden, Vice President of Enterprise Research at Black Knight, says this about home price trends:

“Just five months ago, prices were declining on a seasonally adjusted month-over-month basis in 92% of all major U.S. markets. Fast forward to March, and the situation has done a literal 180, with prices now rising in 92% of markets from February.”

Selma Hepp, Chief Economist at CoreLogic, explains the limited supply of homes available for sale is contributing to this positive turn:

“ . . . prices in many large metros appeared to have turned the corner, with the U.S. recording a second month of consecutive monthly gains. . . . The monthly rebound in home prices underscores the lack of inventory in this housing cycle.” 

WHAT DOES THIS MEAN FOR WEST CHESTER, DOWNINGTOWN AND GREAT VALLEY?

Check out the below chart that shows median sales prices single family detached houses from January, 2021 through May of 2023. 

WEST CHESTER, DOWNINGTOWN, GREAT VALLEY, MEDIAN SALES PRICE, SINGLE FAMILY
Month Sale Price Sale Price Difference % Diff Sale Price Difference % Diff
   2021    2022 2023
     ($)      ($)       ($)    (%)      ($) (      $)    (%)
Jan $525,000 $565,000 $40,000 7.6% $636,500 $71,500 12.7%
Feb $577,000 $554,000 ($23,000) -4.0% $620,000 $66,000 11.9%
Mar $557,188 $635,000 $77,812 14.0% $671,500 $36,500 5.7%
Apr $557,500 $685,600 $128,100 23.0% $660,750 ($24,850) -3.6%
May $591,820 $657,000 $65,180 11.0% $723,800 $66,800 10.2%
Jun $575,000 $687,977 $112,977 19.6%
Jul $642,500 $675,000 $32,500 5.1%
Aug $604,000 $647,500 $43,500 7.2%
Sep $575,000 $637,401 $62,401 10.9%
Oct $580,000 $605,000 $25,000 4.3%
Nov $550,000 $599,500 $49,500 9.0%
Dec $610,000 $590,000 ($20,000) -3.3%
Annual $578,751 $628,248 $49,498 8.6%
Year to Date $662,510 $43,190
Year over Year Up, 10 of 12 months in 2022
Year over Year Up, 4 of 5 months Year to Date in 2023

National year over year prices were down in almost every month during the last six months of the year. NOT SO IN OUR AREA WHERE PRICES WERE UP IN 5 OF THE LAST 6 MONTH.

ANNUAL PRICE INCREASE IN 2022 WAS 8.6%.

AND THE TREND CONTINUES IN 4 OF THE FIRST 5 MONTHS IN 2023.

Here’s What This Means for You

  • Sellers: If you’ve been holding off on selling because you’re worried about what was happening with home prices and how it would impact the value of your home, it may be time to jump back in and partner with an agent to list your house. You don’t have to put your needs on hold any longer because the latest data shows a turn in your favor.
  • Buyers: If you’ve been waiting to buy because you didn’t want to purchase something that would decrease in value, you now have the peace of mind things are looking up. Buying now lets you make your move before home prices climb more and gives you the chance to own an asset that typically grows in value over time.
  • I endorse these opinions from the national experts, EVEN MORE STRONGLY FOR OUR AREA.
  • IF YOU ARE A FIRST TIME BUYER OR A MOVE UP BUYER, THIS IS PROBABLY THE BEST TIME WE WILL EVER SEE TO MAKE THOSE MOVES.

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

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

MEDIA, PA: WHY BUYING A HOME PROBABLY MAKES MORE SENSE THAN RENTING

Media, PA: Why Buying a Home Probably Makes More Sense Than Renting

Wondering if you should continue renting or if you should buy a home this year? If so, consider this. Rental affordability is still a challenge and has been for years. That’s because, historically, rents trend up over time. Data from the Census shows rents have been climbing pretty steadily since 1988.

And, data from the latest rental report from Realtor.com shows rents continue to grow today, even though it’s at a slower pace than we saw at the height of the pandemic:

“In March 2023, the U.S. rental market experienced single-digit growth for the eighth month in a row . . . The median asking rent was $1,732, up by $15 from last month and down by $32 from the peak but is still $354 (25.7%) higher than the same time in 2019 (pre-pandemic).”

With rents much higher now than they were in more normal, pre-pandemic years, owning your home may be a better option, especially if the long-term trend of rents increasing each year continues. In contrast, homeowners with a fixed-rate mortgage can lock in a monthly mortgage payment for the duration of their loan (typically 15-30 years).

Owning a Home Could Be More Affordable if You Need More Space

The graph below uses national data on the median rental payment from Realtor.com and median mortgage payment from the National Association of Realtors (NAR) to compare the two options. As the graph shows, depending on how much space you need, it’s typically more affordable to own than to rent if you need two or more bedrooms:

So, if you’re looking to live somewhere where you have two or more bedrooms to accommodate your household, give you more breathing room to spread out your belongings, or dedicate the extra space to practice your hobbies, it might make sense to consider homeownership.

HOW DOES THIS SHAKE OUT FOR MEDIA BECAUSE, LIKE POLITICS, ALL REAL ESTATE IS LOCAL . WE HAVE TO CONSIDER THAT Home ownership Allows You To Start Building Equity

Let’s compare the relative costs and benefits of renting a 2 bedroom dwelling in Media with buying the median priced 2 bedroom detached house. Median rent in Media is about $2,400. Median price for a 2 bedroom detached house is about $370,000.  Down payment and closing costs can be as low as $29,000. Monthly principal and interest would be $2,911. And that never changes for the life of your loan.

No contest you say. Renting saves me $511 every month. Well maybe for a year, two at the most because rents go up every year. And remember, your mortgage interest and taxes are deductions on your income tax so you may even save money even in the first year.

Here is the big BUT to  that argument. If you own you begin to build equity right away.  Assuming the long term average of 3.5% value increase per year, after 10 years, your value has increased to about $506,000; after 20 years to about $714,000 and after 30 years to about $1,008,000. And that doesn’t even count the payoff of your mortgage.

If you rent all that time, you will just have a stack of mortgage receipts, or more likely a computer file showing that you paid.

To emphasize, in addition to shielding you from rising rents and being more affordable when you need more space, owning your home also allows you to start building your own equity, which in turn grows your net worth quickly and by a lot.

And, to repeat a bit, because it is important. As home values typically rise over time and you pay off your mortgage, you build equity. That equity can set you up for success later on because you can use it to help fuel a move to an even bigger space down the line. That’s why, according to Zonda, the top reason millennial homeowners bought their home over the past year was to build their own equity instead of someone else’s.

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

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move.
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • If you’re trying to decide whether to buy a home or continue renting, let’s connect to explore your options. With rents rising, it probably makes more sense to pursue your dream of homeownership.
  • If you would like to listen to our 13 minute podcast on this topic, please click on the below hyperlink: https://bit.ly/Buying_Makes_More_Sense_Than_Renting

WEST CHESTER, PA: WHY BUYING A HOME PROBABLY MAKES MORE SENSE THAN RENTING TODAY

West Chester, PA: Why Buying a Home Probably Makes More Sense Than Renting Today

Wondering if you should continue renting or if you should buy a home this year? If so, consider this. Rental affordability is still a challenge and has been for years. That’s because, historically, rents trend up over time. Data from the Census shows rents have been climbing pretty steadily since 1988.

And, data from the latest rental report from Realtor.com shows rents continue to grow today, even though it’s at a slower pace than we saw at the height of the pandemic:

“In March 2023, the U.S. rental market experienced single-digit growth for the eighth month in a row . . . The median asking rent was $1,732, up by $15 from last month and down by $32 from the peak but is still $354 (25.7%) higher than the same time in 2019 (pre-pandemic).”

With rents much higher now than they were in more normal, pre-pandemic years, owning your home may be a better option, especially if the long-term trend of rents increasing each year continues. In contrast, homeowners with a fixed-rate mortgage can lock in a monthly mortgage payment for the duration of their loan (typically 15-30 years).

Owning a Home Could Be More Affordable if You Need More Space

The graph below uses national data on the median rental payment from Realtor.com and median mortgage payment from the National Association of Realtors (NAR) to compare the two options. As the graph shows, depending on how much space you need, it’s typically more affordable to own than to rent if you need two or more bedrooms:

So, if you’re looking to live somewhere where you have two or more bedrooms to accommodate your household, give you more breathing room to spread out your belongings, or dedicate the extra space to practice your hobbies, it might make sense to consider homeownership.

HOW DOES THIS SHAKE OUT FOR WEST CHESTER BECAUSE, LIKE POLITICS, ALL REAL ESTATE IS LOCAL . WE HAVE TO CONSIDER THAT Home ownership Allows You To Start Building Equity

Let’s compare the relative costs and benefits of renting a 2 bedroom dwelling in West Chester with buying the median priced 2 bedroom detached house. Median rent in West Chester is about $2,300. Median price for a 2 bedroom detached house is about $335,000. Down payment and closing costs can be as low as $25,000. Monthly principal and interest would be $2,541. And that never changes for the life of your loan.

No contest you say. Renting saves me $241 every month. Well maybe for a year, two at the most because rents go up every year. And remember, your mortgage interest and taxes are deductions on your income tax so you may even save money even in the first year.

Here is the big BUT to  that argument. If you own you begin to build equity right away.  Assuming the long term average of 3.5% value increase per year, after 10 years, your value has increased to about $473,00; after 20 years to about $667,000 and after 30 years to about $940,000. And that doesn’t even count the payoff of your mortgage.

If you rent all that time, you will just have a stack of mortgage receipts, or more likely a computer file showing that you paid.

To emphasize, in addition to shielding you from rising rents and being more affordable when you need more space, owning your home also allows you to start building your own equity, which in turn grows your net worth quickly and by a lot.

And, to repeat a bit, because it is important. As home values typically rise over time and you pay off your mortgage, you build equity. That equity can set you up for success later on because you can use it to help fuel a move to an even bigger space down the line. That’s why, according to Zonda, the top reason millennial homeowners bought their home over the past year was to build their own equity instead of someone else’s.

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

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move.
  • Do I think that now is a good time to buy that first house or to sell and make that move up buy?  Again, absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • If you’re trying to decide whether to buy a home or continue renting, let’s connect to explore your options. With rents rising, it probably makes more sense to pursue your dream of homeownership.
  • If you would like to listen to our 13 minute podcast on this topic, please click on the below hyperlink: https://bit.ly/Buying_Makes_More_Sense_Than_Renting

MEDIA, PENNSYLVANIA: WHAT DO EXPERTS SAY ABOUT THE SPRING MARKET?

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

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

Selma Hepp, Chief Economist, CoreLogic:

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

Greg McBride, Chief Financial Analyst, Bankrate:

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

Rick Sharga, Founder and CEO, CJ Patrick Company:

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

Jeff Tucker, Senior Economist, Zillow:

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

WHAT ABOUT MEDIA?

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

Below chart shows the sales price history for Media from January 2021 through April 2023. In 2022, year over year prices were up in 10 of the same12 months from 2021. This trend continues in 2023 in 3 of  the four months. Year to date, prices are also up,but they are skewed by an unusually large number of very expensive houses that were sold in January and February. March and April results are also up and are more typical of what we should expect for the rest of the year.

ROSE TREE MEDIA SCHOOL DISTRICT, MEDIAN SALES PRICE, SINGLE FAMILY DETACHED
Month Sale Price Sale Price Difference Diff % Sale Price Difference Diff %
2021 2022 2023
Jan $500,000 $612,450 $112,450 22.5% $1,200,000 $587,550 95.9%
Feb $419,900 $694,500 $274,600 65.4% $950,000 $255,500 36.8%
Mar $579,000 $695,750 $116,750 20.2% $540,000 ($155,750) -22.4%
Apr $516,250 $505,000 ($11,250) -2.2% $665,000 $160,000 31.7%
May $528,000 $706,000 $178,000 33.7%
Jun $615,000 $664,250 $49,250 8.0%
Jul $660,000 $897,500 $237,500 36.0%
Aug $587,506 $730,000 $142,494 24.3%
Sep $584,300 $677,000 $92,700 15.9%
Oct $635,000 $530,000 ($105,000) -16.5%
Nov $580,000 $690,000 $110,000 19.0%
Dec $534,000 $626,500 $92,500 17.3%
Annual $561,580 $669,079 $107,500 19.1% $838,750 $211,825 31.7%
YTD thru 4/27 $626,925
Year over Year Price up in 10 of 12 months in 2022
Year over Year Price up in 3 of 4 months in 2022, but sample size too small for valid comparison.
YTD up by 31.7% in 2023; but again sample size to small for valid comparison.

I believe these trends will continue. Why you ask.? Well, median days on market for the last 2 months have been 3.  That means that if you have a home for sale and it is properly marketed and priced, you can reasonably expect to have an acceptable agreement of sale in about a week or less. That tells me there are a lot of buyers out there ready and willing to buy.

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

WHAT DOES THIS MEAN FOR BUYERS AND SELLERS TODAY? 

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

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

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

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

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

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

Selma Hepp, Chief Economist, CoreLogic:

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

Greg McBride, Chief Financial Analyst, Bankrate:

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

Rick Sharga, Founder and CEO, CJ Patrick Company:

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

Jeff Tucker, Senior Economist, Zillow:

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

WHAT ABOUT WEST CHESTER?

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

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

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

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

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

WHAT DOES THIS MEAN FOR BUYERS AND SELLERS TODAY? 

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

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

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

 

CHESTER COUNTY, ARE LOWER HOME PRICES COMING?

CHESTER COUNTY, ARE Lower Home Prices COMING?

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

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

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

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

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

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

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

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

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

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

The year over year median sales price was up in 11 of 12 months in 2022.  Up a very healthy 9.2% for the year. The trend continues in 2 of 4 months in 2023. YTD, through April 23 is up 1.2% in 2023

CHESCO, MEDIAN SALES PRICE, SINGLE FAMILY, DETACHED,2021 THRU 2023 YTD
Month Sale Price, Median 2021 Sale Price, Median 2022 Sale Price, Median 2023
Jan $452,500 $484,900 $527,500
Feb $441,700 $510,000 $507,500
Mar $495,000 $525,000 $545,000
Apr $481,250 $540,000 $505,000
May $512,021 $531,055
Jun $515,000 $600,000
Jul $531,000 $575,000
Aug $498,000 $550,000
Sep $479,900 $540,000
Oct $494,075 $549,500
Nov $499,000 $545,000
Dec $508,961 $500,000
Annual $492,367 $537,538
Annual Price Difference $45,171
Annual % 9.2%
Jan-Apr $514,975 $521,250
Jan-Apr Price Difference $6,275
% Difference 1.2%

 

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

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

Bottom Line

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

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

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

DELAWARE COUNTY, A BIG ADVANTAGE IF YOU SELL THIS SPRING

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

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

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

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

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

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

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

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

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

DELCO,MONTHS OF INVENTORY, 2020
THRU MARCH 2023, SINGLE FAMILY, DETACHED
Month 2020 2021 2022 2023
Jan 5 3 3 4
Feb 7 5 4 4
Mar 5 4 3 2
Apr 5 4 3
May 6 4 3
Jun 6 3 3
Jul 3 3 3
Aug 3 3 2
Sep 3 4 3
Oct 3 3 3
Nov 3 3 3
Dec 3 2 2
Strong Seller Market Inventory for Years

 

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

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

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

DELCO, MEDIAN SALES PRICE, SINGLE FAMILY DETACHED
2020 THRU MARCH 2023
Month 2020 2021 2022 2023
Jan $315,000 $359,000 $360,000 $375,000
Feb $315,000 $335,450 $376,000 $390,000
Mar $316,000 $369,500 $403,500 $400,000
Apr $339,950 $400,000 $415,000
May $370,000 $400,000 $427,000
Jun $347,500 $410,000 $451,500
Jul $355,000 $425,000 $420,000
Aug $379,900 $415,000 $430,000
Sep $371,000 $385,000 $385,000
Oct $350,000 $400,000 $390,000
Nov $355,000 $384,900 $410,000
Dec $365,000 $380,000 $420,000
Annual $348,279 $388,654 $407,333
Annual % 11.6% 4.8%
Year over Year Sales Price Higher 10 of 12 months in 2022
2 of 3 months in 2023
Strong Upward Trend in Prices, Continues in 2023

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

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

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

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

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

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

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

DELCO, DAYS ON MARKET, SINGLE FAMILY
RESIDENTIAL, 2020 THRU MARCH 2023
Month 2020 2021 2022 2023
Jan 44 7 15 12
Feb 49 12 12 12
Mar 20 7 7 7
Apr 12 6 7
May 9 6 6
Jun 11 6 6
Jul 9 7 6
Aug 7 7 8
Sep 6 10 9
Oct 7 10 11
Nov 7 10 8
Dec 8 12 9
DOM about a Week for 2 Years +

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

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

  • It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the market in your area if you’re planning to make a move this spring.
  • Do I think that now is a good time to sell and make that move up buy?  Again,  absolutely yes.
  • To get a quick update of what is new in real estate, click here to check out our new videos.
  • Interested in what recent clients think of my service? Click here to read what they say.
  • Interested to know what your house is worth? Click here to get the most extensive and accurate estimate of home value that is available on the Internet. No cost or obligation of course.
  • No doubt, the housing market is shifting, and it can be a confusing place right now. I suggest that we connect so that I can help you make confident and informed decisions about what’s happening. Minimize the fear or uncertainty that could change your plans. If you’re unsure about how to make sense of what’s going on in today’s housing market, text or call me at 484-574-4088 or go to my web site, (johnherreid.com) and lets set up a time to meet, either on line or in person. I have the software so that we can meet virtually and make the best use of your time.
  • If you’re looking to make that move up buy this year, I believe now is a good time to do it. The best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect. I would like to interview for the job of becoming your trusted real estate advisor.
  • One of the biggest benefits of owning a home, regardless of your income level, is that it provides financial stability and an avenue to build wealth. By selling your house and leveraging your equity, it can be easier to pay for your next home. Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.
  • There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, let’s connect today.
  • If you would like to listent to our 14 minute podcast on this topic, please click  https://bit.ly/Big_Advantage_If_You_Sell_This_Spring

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

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

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

Selma Hepp, Chief Economist at CoreLogic, says:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

IMPLICATIONS FOR BUYERS AND SELLERS TODAY

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

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

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