START YOUR ENGINES!!!

It might be one of the coldest and most “wintery” starts to a year that we’ve seen here in Chester County in a long time, however the market is off to a strong start. Inventory is low – ridiculously low – helping sellers and making things a bit difficult for serious buyers. Let’s look at the details….

DEMAND: 2014 is off to a very strong start. The demand is definitely there, however one big issue buyers are facing are actually finding a home that meets their needs. There isn’t much to choose from. By the numbers, the demand is slightly elevated over last year and we fully believe it would be higher if the inventory was there. One somewhat concerning number is the Pending sales. Pending sales are down by about 25%, however, these are VERY early numbers and could be off as much as 10- 15%. We will know a bit more in a few weeks. We fully believe it’s because there isn’t much to choose from. Time will tell.

SUPPLY & INVENTORY ACCUM: The word pitiful comes to mind. There is only 4.4 months of inventory currently which is 12% below last year and 27% below the 5 year trend. It is really making it very difficult for our clients to find exactly what they want and they are having to make a lot more compromises than normal. To put this in perspective, the 5 year trend puts the supply at 3165 yet currently there are about 2300 homes for sale. It’s definitely a squeeze.

SLPR: The List to Sale Price ratio is one a VERY bright light for sellers as it is currently 94.7%, which means if someone is asking $300,000 for their house they would get, on average, about $284k. The 5 year trend puts it at 90.7%, which means they’d get $272,100. That’s a $12k difference! VERY good news for sellers. Even better news is that numbers is for all of Chester County and most of the “more desirable” area’s are getting as much as 97%-98% of asking. This will be a very good year for sellers.

CONCLUSION: Overall it’s very good news. The big tension is the inventory and if there were more places that were available to sell, it would help the overall valuation of homes. What this means for buyers is that they are either going to have to wait longer and have much more competition than before or make more compromises then they may have been planning on. However, for those looking to sell, it’s very good news, only if you need to sell. If you are looking to sell AND buy at the same time, you are going to have a VERY tight plan and fully understand what the market is doing before heading into the rough waters. If this is you, please call us. We are very good at helping clients though that transition.