LANCASTER COUNTY REAL ESTATE CLOSE TO A BOTTOM

Greetings to you and your family and Happy New Year!  I hope all is well.   

                                2000 – 5,047                       2003 – 5,801                       2006 – 6,029                       2009 – 4,482

                                2001 – 5,592                       2004 – 6,160                       2007 – 5,746                       2010 – 4,098

                                2002 – 5,956                       2005 – 6,453                       2008 – 4,513                       2011 --3,975

We have just finished the 6th consecutive year of declining home sales since the peak of 6,453 in 2005. Additionally home prices have finished their 4th consecutive year of year over year declines since the price peak in 2007, although the declines are less than what they had been earlier. Depending on the location, price point and conditions of the homes , values in Lancaster County are down anywhere from 10% to 25% since the peak. Finally, inventory levels have declined  for 6 straight months and inventory levels are now less that they were at this time last year. This is the first decline after 5 years of dramatically increasing inventory levels.

My expectation is that we hit a bottom in home sales (number of homes sold) in 2011 and will see the sales numbers increase in 2012. Further I expect that we will see a bottom on prices during  2012 with the prices firming up in 2013 with prices starting to increase after that.

The market correction has created a "wants based" mindset across all price ranges which previously existed in just the higher end markets. Buyers are demanding and getting more concessions on pricing and terms. This will be a long recovery.

It is definitely a buyer’s market but homes are selling if they meet 2 criteria:

1.       A home needs to be priced correctly. This seems obvious but pricing homes remains an art, not a science and it is difficult to determine just where the right price is in this market.

2.       Condition of the home. The home must be in good condition. This means it must be clean, uncluttered, neutral and functional. Again this sounds obvious but is not easily obtained in many homes.

If a home does not meet these 2 simple criteria, the seller will be “punished” both on selling price and the time on the market. If it does meet the criteria, the home will sell and sell relatively quickly.

With all of the above said, you need not be fearful to step into the market as long as you are careful and realistic. As a seller you need to make sure you have done all you can to maximize the value of your home. As a buyer you need to be sure that you have your financing in place, understand all the new lending regulations and are well versed in the nuances of the marketplace. Whether you are a buyer or a seller, you need an excellent Realtor!