LANCASTER COUNTY REAL ESTATE CONTINUES TO STRENGTHEN
Over the past 17 years the number of homes sold in Lancaster County is as follows:
2000 – 5,047 2003 – 5,801 2006 – 6,029 2009 – 4,482 2013 – 4,954
2001 – 5,592 2004 – 6,160 2007 – 5,746 2010 – 4,098 2014 – 4,960
2002 – 5,956 2005 – 6,453 2008 – 4,513 2011 – 4,006 2015 – 5,558
2012 – 4,683 2016 – 5,950
We have just finished the 5th consecutive year with sales increases, after 6 consecutive years of year over year declines, since the peak of 6,453 in 2005. 2016 marks the 4th straight year of year over year price increases, after posting 5 consecutive years of year over year declines, since the price peak in 2007. With the increases in 2016, housing prices are now back to 2007 levels. Of course, this will vary depending on the location, price point and condition of the home. Inventory levels have declined steadily for 66 months. The increase in sales, continued decline in inventory and increase in prices indicates that the Lancaster County real estate market continues to strengthen. Except for high end homes, which continue to struggle, we have returned to a “normal” market.
My expectation is that we will see the sales momentum continue in 2017 with sales levels returning to close to or exceeding 2005 levels. Further, I expect that we will see prices continue to firm up in 2017 with increases in the 3% to 4% range. Mortgage interest rates will rise in 2017 but I expect the market recovery will be able to “absorb” the increased costs to buyers.
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. Although the market is gaining much needed traction, we are still in the midst of a long recovery.
We are returning to a more balanced market so homes are selling if they meet 2 criteria:
- 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.
- Condition of the home. The home must be in good condition. This means it must be clean, uncluttered, neutral, functional and updated. 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 at a “premium” price.
With all 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!
Hopefully, this information has been helpful to you to put the market in perspective. Please contact me if you, or someone you know, have any real estate needs or questions or if you want to discuss market conditions. I look forward to working with you, or your referrals, in the future.
MARKET UPDATE DECEMBER 16, 2016