By Chris LaGarde & Caleb Knecht of Keller Williams Real Estate

There have been a couple of interesting quirks in Chester County’s housing market numbers this past month. Specifically in average sold price and demand.

Does this spell bad news for the overall market? We don’t think so. Let’s look more closely.

Demand

Demand in November took a pretty drastic drop, compared to last year and the 5 year trend.  We can’t say we know for sure what really contributed to that, however, the homes that settled in November, likely went under contract in middle/late September or beginning of October and that was a pre-election season.

We typically see a lot of folks holding off on purchases before an election.

In addition, the fall buying season seemed to get off to a somewhat slow start.   In the end, we don’t see this as something to be concerned with. It has very little overall effect for current buyers or sellers. The demand for the year overall has been very promising and healthy and that is expected to continue.

Supply And Inventory Accumulation

Supply in the last month or so has taken another dip and we are down to about 5.3 months of inventory overall which makes it a solid sellers market.  This means that those looking to sell have the upper hand overall.

For buyers, there is less to choose from and more competition. Sellers generally get pretty close to asking in these conditions, usually 97% – 98% of asking or higher.  Buyers have to prepare themselves mentally for those conditions.

Sold To List Ratio

The overall ratio took an usual jump this past month and this is connected to the drop in overall sold homes or demand.

What isn’t shown in the four graphs above was what the average sold price was.  In November it was also unusually high at about $365k.  What this tells us is that the higher price ranges were selling – most likely from $300 – $500k.

This market has been unusually hot this year and when you look at the big picture what becomes clear is that price range has continued to be very competitive and to be a focus of the market.  So overall, the market is pretty competitive, but if you are in that price range, its unusually competitive. This has certainly been our team’s experience.

Rates

Rates continue to hover around 4% give or take.  FHA is a bit below that and conventional rates may likely go a bit over that.

This continues to allow movement in the market to be much freer.  Personally, we don’t see how the market could sustain rates much more above 5% as it would most certainly have a dramatic affect on pricing and activity.  This however, could be the reality and the market would have to deal with rates in that range.

Conclusion

The big Chester County housing story in 2014 has been the lack of inventory, rising prices and Low interest rates.  There doesn’t seem to be much change moving into 2015.  Expect demand to continue at the level we’ve seen this year and with prices continuing to rise

2015 promises to be a good year to move.