Greetings to you and your family and Happy New Year! I hope all is well. Over the past 14 years the number of homes sold in Lancaster County is as follows:
|2000 – 5,047||2003 – 5,801||2006 – 6,029||2009 – 4,482||2012 – 4,645|
|2001 – 5,592||2004 – 6,160||2007 – 5,746||2010 – 4,098||2013—4,925|
|2002 – 5,956||2005 – 6,453||2008 – 4,513||2011 – 4,006|
We have just finished the second year with sales increases, after 6 consecutive years of year over year declines, since the peak of 6,453 in 2005. Home prices increased ever so slightly in 2013, after posting 5 consecutive years of year over year declines, since the price peak in 2007. Depending on the location, price point and condition of the home, values in Lancaster County are down anywhere from 10% to 30% since the peak. Finally, inventory levels have declined steadily for 30 months and are now less than they were 5 years ago. The increase in sales, decline in inventory and increase in prices indicates that the Lancaster County real estate market has finally stabilized. The market is by no means robust but it has stabilized!
My expectation is that we will see the sales momentum continue in 2014 with sales levels returning to close to 2007 levels. Further, I expect that we will see prices continue to firm up in 2014 with some small price increases in 2014. Mortgage interest rates will rise in 2014 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 early stages of a long recovery.
It still remains 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 , 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 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!
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.