Lancaster County Real Estate Slowing and Showing Signs of Stress
Over the past 19 years the number of homes sold in Lancaster County is as follows:
2000 – 5,047 2004 – 6,160 2008 – 4,513 2012 – 4,683 2016 – 6,095
2001 – 5,592 2005 – 6,453 2009 – 4,482 2013 – 4,954 2017 – 6,200
2002 – 5,956 2006 – 6,029 2010 – 4,098 2014 – 4,960 2018 – 5,946
2003 – 5,801 2007 – 5,746 2011 – 4,006 2015 – 5,558
Home sales were basically flat this year after six consecutive years with sales increases. 2018 marks the 6th straight year of year over year price increases, after posting five consecutive years of year over year declines, since the price peak in 2007. With the increases in 2018, housing prices are now well above 2007 levels. Of course, this will vary depending on the location, price point and condition of the home. Inventory levels have declined steadily for 90 months. The flattening in sales, continued decline in inventory and increase in prices indicates that the Lancaster County real estate market continues to stabilize. With the exception of high end homes which are struggling quite a bit, we are returning to a more balanced market in the lower price ranges.
My expectation is that we will see the sales flattening continue in 2019 with sales levels possibly sliding lower than 2018. Further, I expect that we will see prices continue to increase in 2019 with increases in the 1% to 3% range. Mortgage interest rates will rise in 2019 but I expect the market will be able to “absorb” the increased costs to buyers.
The market conditions have created a “wants based” mindset across all price ranges which previously existed in just the higher end markets. Thanks to the internet, social media and HGTV, buyers and sellers are much more educated and savvier than in the past. This cuts both ways, but most benefits the buyers and sellers who are able to apply the information to their advantage.
As we are returning to a more balanced market, seller’s still need to meet two 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 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 if 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 31, 2018