By Chris LaGarde & Caleb Knecht of Keller Williams Real Estate
Chester County’s real estate market remains very healthy, showing signs of “responsible” growth. Sellers are getting their home sold quicker than any time in the last 6-7 years and for closer to asking price. Rates are surprisingly and unexpectedly low, which means buyers are getting an unexpected gift.
Let’s look at the detail.
DEMAND: Demand in October was very healthy. There was a lot of activity and we can tell you from the front lines it was tough for buyers, especially in the “move up” range. Those buyers looking to get more space and buy a bigger house than what they currently had, frequently face multiple offers situations. This has been the experience over the last two October selling seasons. If this year mirrors next year, then November will see a cool down in the activity. This is good for sellers and, frankly, frustrating for buyers. Good news is that rates are very low and prices haven’t climbed too high.
SUPPLY AND INVENTORY ACCUMULATION: October signals the month when many people put selling on hold for the holiday and winter season. The homes that will be left on the market over the next month will be those that are serious about selling. In addition, sellers will settle for a percentage point less for their homes, statistically, than those that were on the market, up to this point. We hope that we do not see the same inventory drought happen this year, as last year. If inventory can stay at respectable levels, it will help the market overall in the spring.
SOLD TO LIST RATIO: This number appears to be concerning, as last October the ratio went up, dramatically, to 95%. When comparing this year, it looks bad, however it’s not. When compared to the 5 year trend, it’s par for the course that this ratio trails off this time of year. One reason, we speculate, that the ratio was so high last year was that the inventory dropped off dramatically this time last year, leaving little to choose from. Therefore sellers could demand a higher list to sold ratio.
RATES: Rates are AH-MAZ-ING right now, hovering just below 4%. This is VERY unexpected and those who are ready and wise will take quick advantage of this. This could save a buyer as much as $100-$200 per month, depending on where rates go in the beginning of the year.
CONCLUSION: We expect to see the “auction” atmosphere go to the way side as the year trails off and things calm down for buyers. While the auction atmosphere was nice for sellers, it makes everything more difficult for the buyer and his agent.
If you are considering buying and are on the fence, jump in!! Rates are well worth the reason to jump and take advantage of them! If you are thinking of selling in 2015, please call us and we can help you take advantage of the winter months and make the most financially savvy updates to your home, to get it ready for the spring market.
