Pennsylvania Real Estate Is Back
Builder Confidence Hits All-Time High
Last week, it was reported that applications for new home purchases with home builders were 39% higher than in July of 2019. That has builder confidence soaring.
Pennsylvania real estate is back for two major reasons. Each month, NAHB releases its Housing Market Index, a survey of NAHB members who rate market conditions for the sale of new homes at the present time and over the next six months, as well as prospective buyer traffic for new homes.
This month, they reported that builder confidence in the market for newly-built single-family homes increased to the highest reading in the 35-year history of the series. NAHB Chairman, Chuck Fowke, explained:
“The demand for new single-family homes continues to be strong, as low interest rates and a focus on the importance of housing has stoked buyer traffic to all-time highs…Housing has clearly been a bright spot during the pandemic and the sharp rebound in builder confidence over the summer has led NAHB to upgrade its forecast for single-family starts, which are now projected to show only a slight decline for 2020.”
The number of newly constructed homes being built will be almost at the same level as last year, even though the economic shutdown crushed home building earlier in the year.
Existing Homes Are Also Selling Like Hotcakes
Last Friday, NAR released its Existing Home Sales Report. The report revealed that month-over-month sales increased by 24.7%, setting another record for the category. The Wall Street Journal reported that the increase crushed expert forecasts:
“Economists surveyed by The Wall Street Journal expected a 14.2% monthly increase in sales of previously-owned homes, which make up most of the housing market.”
Home sales increased by 8.7% year-over-year.
Lawrence Yun, Chief Economist for NAR, explained how the resale market is just as hot as the new construction market:
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days. With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”
In addition, the Housing Market Recovery Index, which is released monthly by realtor.com, also showed the market is recovering nicely. The latest index reading was 104.8, which means the housing market is doing better than it was in January and February of this year. As a reference, the highest point in the index was a 106.5 in early March, just prior to the health crisis setting in.
Homes for Sale, Southeast Pennsylvania, Chester County
Governor Wolfe locked down the real estate industry in early March. The real impacts were felt in May and June when single family sales were only 563 compared to 1,040 the same two months in 2019. That was a 46 % reduction.
However when the clamps came off, sales rebounded strongly in July to 537 units, compared to 502 in July 2019.
Inventory has been low in Chester county for some time and it hit a new low in July at three months
Days on market also hit a new low with a median of only 9 days. That was the lowest in the last 10 years.
Median Sales price also set new record at $521,000.
Homes for Sale, Southeast Pennsylvania, Delaware County
Delaware county showed similar trend lines. May and June sales dropped by a whopping 52% ( 946 to 455).
The lid also came off in July when sales rebounded to 450 compared to 403 in July, 2019.
Months of Inventory were at an almost unheard of level of only 2 months.
Days on Market also established a 10 year low of 9 days.
Median Sales price hit a new ten year high of $415,000.
Bottom Line, For Sellers and Buyers
And of course interest rates still hover around 4% which is still crazy low.
This all adds up to great news for just about all sellers and all buyers.
First time buyers, great time to become a home owner before prices go up even more, while interest rates are so low.
Sellers and Move up buyers, great time to sell with rising prices and quick sales, you are in the driver’s seat to get a price that will please you in a time frame that you will like. And the low interest rates will help you get that move up dream house with a lower monthly payment than you might expect.
Interested, Here is What to Do
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