Bright MLS December 2022 Delaware County PA Residential Housing Report

Showing Time, using Bright MLS statistics, has released their Local Market Insight report for single-family homes in Delaware County Pennsylvania through December 2022. If you would like more information about this or any other County or any specific municipalities in the Delaware Valley, please contact me or visit my website, http://www.AndrewWetzel.com. I am only a phone call, an email or a text away! I respond promptly to all inquiries.

The overall Real Estate market continues to be affected by wildly fluctuating economic news and, to some extent, lingering impacts of the pandemic. The economic news, specifically inflation and threats of a recession, has substantially elevated the mortgage rate and made some buyers apprehensive, wondering if this is the “right time” to buy. Inventory levels have increased but many sellers seem to think there is still a “sellers’ market” throughout the County. Some areas are still experiencing competition while others are not. Many buyers refuse to pay full price if they still wish and are able to buy.

The economy is an “uncontrollable variable” and consumers will evaluate it and the interest rate however they wish. The popular phrase these days is “date the rate and marry the house”. This means that you may be able to refinance the interest rate later if it declines but the focus should be on getting the best house for your needs and wants. Of course, there is no guarantee that the interest rate will decline in the near future and it may rise even higher. Overpaying and/ or buying the wrong house can be very costly. What is a buyer to do?

As far as pricing, supply and demand typically suggest that prices should decline when inventory rises or activity decreases. This is not guaranteed in Real Estate unless a seller really wants or needs to move. Some houses are still getting well above the “asking price”.

Generally speaking, price reductions are now a more frequent occurrence with some properties taking multiple reductions to generate interest. The downside of that may be two-fold. First, I see many of what I call useless/ senseless price reductions. By that I mean that they do not re-position the house to attract the interest of a different group of buyers. What then is the point? Second, if a specific house is not exactly what a buyer or group of buyers is looking for, they may sit and watch how low a price may go before doing anything. Pricing requires a strategy or purpose.

The good news is that I am hearing less talk of a “bubble” although pricing does suggest a market  “correction” as we shift away from a “sellers’ market”. Whether it swings to a “buyers’ market” or reaches equilibrium remains to be seen? As they say, your results may vary so all you can do is plan, prepare and act based on YOUR needs and wants. While sellers adjust to the “current normal”, whatever that is, buyers have to decide whether to wait and hope for further price reductions and/ or lower interest rates.

As is typically the case, you cannot “time the market”:  selling and buying are personal decisions, typically emotional ones justified with logic. As always, your experience may differ depending on your location and how you have been personally impacted.

As always, this report compares current year-to-date results to one-year ago, same time period. Given that this is a December report, we get to compare 2022 with 2021. As with all Real Estate statistics, two things are true. First, the performance within individual zip codes can and will vary significantly from the overall County. Real Estate is local and results can vary from neighborhood to neighborhood and even block to block. There is no such thing as a “national” Real Estate market any more than there is a national weather forecast so, whether you may be thinking about selling or buying, please

contact me for details about your areas of interest. I can provide current information and keep you informed about the evolving market. Deciding whether it is the right time to sell or buy is a personal decision typically involving a number of variables, some of which you have no control over. I can provide the knowledge and insight to help you decide what works for you.

My second point is that, unfortunately, all Real Estate statistics involving sold data are stale. This is especially true if you are relying on Internet valuation models which use recorded data rather than up-to-date MLS “settled” information. Even then, while a sale may be reported as having settled or closed today, the real question is when was the offer negotiated? Typically, financed sales can take 45 to 60 days to close so the market today may be different from when the offer was presented and negotiated. Up-to-date information, even if not perfect, is important!

As far as the statistics, there were 7747 new “For Sale” listings through December 2022 compared to 9242 through December 2021, a decrease of 16.2%. There were 6983 “closed” sales through December 2022 compared to 8193 through December 2021, a decrease of 14.8%. These are obviously huge changes. The median selling price through December 2022 was $300,000 compared to $272,000 through December 2021, an increase of 10.3%. The decline in the number/ inventory of newly listed properties impacted the number sold while substantially increasing their selling prices. Again, this was County wide and may not reflect your experience.

The number of currently available properties (532) is above one year ago (467). The Days on the Market (DOM) (24 now vs 20 for YTD 2022) and “Sold to List Price” ratio (97.9% now vs 100.8% YTD 2022) show the evolving market. The MSI (Months of Supply) is 1.3 months, up 54% from one year ago. The increased inventory combined with pent-up demand has created our current market although the impact of higher interest rates, even if historically low, remains to be seen. Again, these numbers vary throughout the County:  the underlying data shows a wide range of results in all categories among the 49 different municipalities in Delaware County. What happens going forward?

Generally speaking, low inventory levels in some areas produced multiple offers and a frenzy among buyers, some of whom are already regretting hasty buying decisions. How many bought “sight unseen”? How many overpaid? The current, slower-paced market allows for more “contemplation”. Many now own homes whose current “market value” is less than what they paid. As uncomfortable as that may make some feel, especially if they have found that a house does not really meet their “needs and wants” or that there were unknown issues that have surfaced, at least we do not appear to have the shaky financials that led to the “bubble”.

Statistics aside, what are you planning to do? Real Estate is generally a long-term investment unless you are looking to fix and flip it or planning to move within a short period of time. There are always opportunities out there. As with the stock market, it is very difficult to pick the best time to make a move. All you can do is get the best available information, determine what is in your best interests and then start the process. Getting started is easy once you take action. Now is the perfect time to plan for 2023.

If you want or need to sell any type of Real Estate, now or in the future, whether you tried and did not succeed before or are planning for the first time, it is never too early to start the planning and preparation. Please do not wait for what you think is a better or the best time to start. Buyers look all year long and can only see and buy properties that are available to see. Based on what you need and want or what you know, is waiting something you would consider?

There is no time for inexperience, empty promises or false expectations!

HIRE WISELY:  We are not “all the same”!

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2022 Profile of Home Buyers and Sellers: Highlights

The National Association of REALTORS (NAR) has published its annual report. The report is based on surveys of recent home buyers including those who sold one property to buy another. The survey consisted of 129 questions mailed to 153,045 recent home buyers. These reports began in 1981 with just 59 questions and are intended to provide insight into consumer behavior, specifically their needs and expectations.

The reports are as unique as the economic, social and demographic environment. The time period covered ran from July 2021 through June 2022 and was impacted by a number of major events including a Real Estate market in transition.

The highlights are broken down into several characteristics.

Home Buyers:

• 26% were first-time buyers, the lowest share ever recorded in these reports, down from 34%
• The typical first-time buyer was 36 years old, up from 33, and the typical repeat buyer was 59, both all-time highs for these reports
• The share of unmarried couples buying was higher than reported previously
• 22% of all buyers said that their primary reason for buying was to own their own home; the number rose to 62% for first-time buyers
• 86% of recent buyers used a Real Estate professional; 10% bought directly from the owner
• 49% used an agent to help them find the right home.

As you will see as I continue, several factors have been adversely affecting buyers, especially first-time buyers.

Homes Purchased:

• 12% bought new homes with 41% of them looking to avoid renovations and mechanical problems
• 88% bought previously-owned homes with 31% of them looking for a better price
• 79% bought detached, single-family homes
• The median distance between the recent purchase and their prior home was 50 miles, up from 15 miles as reported between 2018 and 2021
• 49% cited the quality of the neighborhood as the most important factor in selecting a location; affordability and proximity to family and friends were both cited at 37%
• The typical purchase was at the full asking price while 28% spent more than the asking price
• Typical buyers expected to live in their home for 15 years; 28% said they would never move

The Home Search Process:

• 47% started by searching online; 18% started by contacting a Real Estate agent
• 96% of buyers used online tools in their search
• Typical buyers searched for 10 weeks, up from 8 weeks, and looked at a median of five homes plus another four they only viewed online
• 86% found their agent to be a very or somewhat useful source of information
• 91% were at least somewhat satisfied with their home-buying process

As I have seen in other reports, delaying contacting a professional may have an adverse effect on buyers especially if they learn that financing requires them to do some work to “qualify”.

Financing the Home Purchase:

• 78% of recent buyers financed their purchase, down from 87%
• The typical down payment for first-time buyers was 6%; 17% for repeat buyers
• 47% used their savings for their down payment. 38% of repeat buyers used the proceeds from the sale of their home; 22% of first-time buyers used a gift or a loan from family or friends
• 26% of first-time buyers cited saving for a down payment as the most difficult step in the process
• 88% of buyers viewed a home purchase as a good financial investment

Home Sellers:

• The typical seller was 60 years old, up from 56
• 21% sold to move closer to family and friends; 11% sold due to retirement; 11% said that their neighborhood had become less desirable
• Sellers typically lived in their home for 10 years, up from 8 years
• 41% bought a larger home; 32% bought the same size home
• 39% used the same Real Estate agent to buy as they used to sell
• 86% used a Real Estate professional; 10% sold on their own, meaning without representation
• The median final selling price was 100% of the asking price, the highest since 2002
• The median time on the market was two weeks, up from one week
• 91% of sellers were at least somewhat satisfied with the selling process

FSBO Sellers (meaning For Sale By Owner or Unrepresented Sellers):

• 10% of sellers sold without representation, up from 7%
• 6% of suburban sellers sold without representation while 13% did so in rural areas
• 50% knew the buyer of their home
• FSBO homes typically sold for less than Real Estate agent-assisted sales. FSBOs sold for a median price of $225,000 compared to Real Estate agent-assisted sales at $345,000.

Sellers who do not use a Real Estate agent typically do so to save the commission. Given the wide disparity in results that merits a conversation. That being said, some sellers say they needed to save the commission to make a move. Their choice but I respectfully suggest that all sellers think about it.

This is a lot to digest. How closely these results may reflect your feelings and experiences will vary. Selling and buying Real Estate is a personal decision, often an emotional one justified with logic.

Remember, when it comes to selling or buying what is likely your biggest asset and your largest overall investment,

There is no time for inexperience, empty promises or false expectations.

HIRE WISELY:  We are not “all the same”!

Bright MLS September 2022 Delaware County PA Residential Housing Report

Showing Time, using Bright Multiple Listing Service (MLS) statistics, has released their Local Market Insight report for single-family homes in Delaware County Pennsylvania through September 2022. If you would like information about this or any other County or any specific municipalities in the Delaware Valley, please contact me or visit my website, AndrewWetzel.com. I am only a phone call, an email or a text away! I respond promptly to all inquiries.

We are at the three-quarter point for 2022 and the Real Estate market continues to be affected by recent economic developments which have resulted in a substantial increase in the interest rate and the lingering effects of the pandemic (which contributed to an inventory shortage and then pent-up demand for housing). All of these have added uncertainty to what is generally considered a long-term decision. While many of us contend that our present circumstances should not be confused with the “housing bubble” we experienced some 15 years ago, it is difficult to really assess what is going on as information ebbs and flows. What will sellers and buyers think later when they reflect on these days and how they responded to them?

For example, the pandemic caused many sellers to stay off the market, dramatically reducing inventory levels. While many buyers delayed taking action, the easing of the pandemic contributed to many jumping into the market shifting the “supply and demand” ratios. In many areas, the result was a huge advantage for sellers. Complicating this were several underlying factors.

On the “supply” side, housing starts are down, complicated by supply-chain issues driving up lumber and other costs, a general shortage of existing housing as the number of overall households has been increasing and a significant number of investors are buying in bulk, typically with cash and limited contingencies, solely for the purpose of using them as rentals. Those purchases are estimated to consume about 25% of the inventory. There has also been a drop-off in foreclosures due to a moratorium. That will be changing so do not be surprised by what may look like a sharp increase in foreclosures as there is about a two-year supply to manage.

On the “demand” side, millennial buyers entered the market looking to buy. In addition to the “supply” side issues already mentioned, many of the “bulk” purchases include properties that generally appeal to first-time buyers. The competition for them and other properties has driven up prices and prevented many new buyers from becoming homeowners. As long as rental income remains strong, these investors will continue to acquire properties. The irony is a “catch-22”. First, rental income remains strong meaning high as many are unable to purchase their own homes which creates competition for rentals. Second, the elevated rental pricing is preventing many from saving for the down payment they need to obtain financing. I am not sure there is a way to change this dynamic in the short term.

Interest rates, while still considered historically favorable, have risen rapidly in recent months putting pressure on monthly payments. While interest rates have not historically suppressed pricing, they can influence selling and buying which affects “supply and demand” on local levels. Locally, I am seeing inventory levels increasing, some of which is attributed to sales falling through due to inspection and financing issues. The “auction-type” environment has subsided in many areas resulting in longer times on the market and buyers being better able to work through the buying process.

Many sellers and their listing agents remain overly optimistic as evidenced by a number of dramatic price reductions. Many buyers are refusing to continue the panic-buying hysteria we have been seeing. It appears that, as with the “bubble years”,  many sellers waited too long to try selling although, if they are buying, that may have been in their best interests. From a selling perspective, once again I would remind people not to try to “time the market”. As always, your experience may differ depending on your location and how you have been personally impacted. As I always say, the decision to buy or sell Real Estate is a personal one and the current environment typifies that as many sellers stay off the market or wait for a better offer.

Some buyers are waiting for a “bubble” to burst as interest rates rise. I recently heard a slogan aimed at buyers that makes a lot of sense:  “date the interest rate and marry the house”! That makes sense. You can refinance the interest rate if it drops so what do you do if you find the perfect house for your “needs and wants”? Will something better come along? Alternatively, buying the “wrong “house” will have financial and other consequences. Will interest rates continue to rise while you think there is a better home waiting for you? Maybe; maybe not! As with all serious decisions, having options can present problems! When do you commit?

As always, this report compares current year-to-date results to one year ago during the same time period. As with all Real Estate statistics, two things are true. First, the performance within individual zip codes can and will vary significantly from the overall County. Real Estate is local and results can vary from neighborhood to neighborhood and even block to block. There is no such thing as a “national” Real Estate market any more than there is a national weather forecast so, whether you may be thinking about selling or buying, please contact me for details about your areas of interest. I can provide current information and keep you informed about the evolving market. Deciding whether it is the right time to sell or buy, again a personal decision, typically involves a number of variables, some of which you can control and some of which you cannot. I can provide the knowledge and insight to help you decide what works for you.

My second point is that, unfortunately, all Real Estate statistics involving sold data are stale. This is especially true if you are relying on Internet valuation models which use recorded sales data rather than up-to-date MLS information. Even then, while a sale may be reported as having settled or closed today, the real question is when was the offer negotiated? Typically, financed sales can take 45 to 60 days to close so the market today may be different from when the offer was presented and negotiated. This is especially true as markets change. Up-to-date information, even if not perfect, is important!

As far as the statistics, there were 6414 new “For Sale” listings through September 2022 compared to 7403 through September 2021, a decrease of 13.4%. There were 5496 closed sales through September 2022 compared to 6041 through September 2021, a decrease of 9.0%. The median selling price through September 2022 was $300,000 compared to $270,000 through September 2021, an increase of 11.1%. The decline in the number of newly listed properties impacted the number sold while substantially increasing their selling prices. Real Estate is a “supply and demand” commodity!

The number of currently available properties (667) is above last month (615) and well below one year ago (767). The Days on the Market (DOM) (21) is up from last month (16), the “Sold to List Price” ratio (99.3%) is down slightly while the MSI (Months of Supply) rose above one month (at 1.2 months), about the same as one year ago. Again, these numbers vary throughout the County:  the underlying data shows a wide range of results in all categories among the 49 different municipalities in Delaware County. What happens going forward? Only time will tell.

There is no time for inexperience, empty promises or false expectations! 

HIRE WISELY:  We are not “all the same”!

Bright MLS June 2022 Delaware County PA Residential Housing Report

Showing Time, using Bright Multiple Listing Service statistics, has released their Local Market Insight report for single-family homes in Delaware County Pennsylvania through June 2022. If you would like information about this or any other County or any specific municipalities in the Delaware Valley, please contact me or visit my website, AndrewWetzel.com. I am only a phone call, email or text away! I respond promptly to all inquiries.

We are at the halfway point for 2022 and the Real Estate market continues to be affected by the lingering effects of the pandemic as well as recent economic developments, all of which have added uncertainty to what is generally considered a long-term decision involving our biggest asset and our largest investment. While many of us contend that our present circumstances should not be confused with the “bubble” we experienced some 15 years ago, it is difficult to really assess what is going on as information ebbs and flows. More about that later in this report.

The pandemic caused many sellers to stay off the market, dramatically reducing inventory levels and creating an inventory shortage. While many buyers delayed taking action, the easing of the pandemic released pent-up demand for housing shifting the “supply and demand” ratios. In many areas, the result was a huge advantage for sellers. Complicating this were several underlying factors.

On the “supply” side, housing starts are down, complicated by supply-chain issues driving up lumber and other costs, a general shortage of existing housing as the number of overall households has been increasing and a drop-off in foreclosures due to a moratorium that will be changing. Do not be surprised by what may look like a sharp increase in foreclosures as there is about a two-year supply to manage.

On the “demand” side, millennial buyers have entered the market looking to buy. In addition, a significant number of investors are buying in bulk, typically with cash and limited contingencies, solely for the purpose of using them as rentals. Those purchases are estimated to consume about 25% of the inventory. Unfortunately, many of these purchases include properties that generally appeal to first-time buyers. The competition for them has driven up prices and prevented many new buyers from becoming homeowners. As long as rental income remains strong, these investors will continue to acquire properties. The irony is two-fold. First, rental income remains strong as many are unable to purchase their own homes which creates competition. Second, the elevated rental pricing is preventing many from saving for the down payment they need to obtain financing. I am not sure there is a way to change this in the short term.

Interest rates, while still considered historically low, have risen in recent months putting pressure on monthly payments. While interest rates have not historically suppressed pricing, they can influence selling and buying which affects “supply and demand” on local levels. Locally, I am seeing inventory levels increasing, some of which is attributed to sales falling through due to inspection and financing issues. The “auction-type” environment of recent memory has subsided in many areas resulting in longer times on the market and buyers being better able to work through the buying process which should help them with their decision-making.

Competition in some areas remains intense. Many sellers and their listing agents remain overly optimistic as evidenced by a number of dramatic price reductions. Many buyers are refusing to continue the panic-buying hysteria we have been seeing. It appears that, as with the “bubble years”,  many sellers waited too long to try selling although, if they are buying, that may have been in their best interests. From a selling perspective, once again I would remind people not to try to “time the market”. As always, your experience may differ depending on your location and how you have been personally impacted. As I always say, the decision to buy or sell Real Estate is a personal one and the current environment typifies that as many sellers stay off the market while some buyers still do extraordinary things to beat their competition.

As always, this report compares current year-to-date results to one-year ago, the same time period. As with all Real Estate statistics, two things are true. First, the performance within individual zip-codes can and will vary significantly from the overall County. Real Estate is local and results can vary from neighborhood to neighborhood and even block to block. There is no such thing as a “national” Real Estate market any more than there is a national weather forecast so, whether you may be thinking about selling or buying, please contact me for details about your areas of interest. I can provide current information and keep you informed about the evolving market. Deciding whether it is the right time to sell or buy is a personal decision typically involving a number of variables, some of which you can control and some of which you cannot. Data and information can be found in many places with no way to know how accurate they are or what they mean. I can provide the knowledge and insight to help you decide what works for you.

My second point is that, unfortunately, all Real Estate statistics involving sold data are stale. This is especially true if you are relying on Internet valuation models which use recorded data rather than up-to-date MLS information. Even then, while a sale may be reported as having settled or closed today, the real question is when was the offer negotiated? Typically, financed sales can take 45 to 60 days to close so the market today may be different from when the offer was presented and negotiated. This is especially true in changing markets. Up-to-date information, even if not perfect, is important!

As far as the statistics, there were 4419 new “For Sale” listings through June 2022 compared to 4802 through June 2021, a decrease of 8%. There were 3538 closed sales through June 2022 compared to 3699 through June 2021, a decrease of 4.4%. The median selling price through June 2022 was $295,000 compared to $265,000 through June 2021, an increase of 11.3%. The decline in the number of newly listed properties impacted the number sold while substantially increasing their selling prices. Real Estate is a “supply and demand” commodity!

The number of currently available properties (649) is slightly below one year ago (665) and well above last month (487). The Days on the Market (DOM) (21) through June 2022 is up, the “Sold to List Price” ratio (101.8%) is down while the MSI (Months of Supply) remains less than 1 month (at .9 months), about the same as one year ago. Again, these numbers vary throughout the County:  the underlying data shows a wide range of results in all categories among the 49 different municipalities in Delaware County. What happens going forward?

Generally speaking, low inventory levels in some areas will continue to produce multiple offers even if not the same “auction-type” frenzy we have seen among buyers. In fact, some newer owners are already regretting a hasty decision to get a property under contract. This is amplified in areas where prices are flat or declining as those trends make re-selling costly. The “frenzy” is over or easing in many areas which caused many buyers to make offers “sight unseen” and/ or waive property inspections to improve their odds. I appreciate buyers trying to be creative to give themselves an advantage but combining buying “sight unseen” with waiving inspections is a recipe for disaster. There are not enough pictures, videos or words that can replace actually walking through a property and, regardless of how honest and knowledgeable a seller is, a completed property disclosure such as we have in Pennsylvania, is not the same as having a skilled inspector looking at the major components of a house, looking for problems with wood infestation, radon and other situations that can be unhealthy and/ or costly to repair. The effects of such creativity remain to be seen, perhaps taking a number of years, even for new owners happy with their purchases. I would highly recommend hiring professionals to do these inspection on your home in case there are unknown issues. Problems only get worse and costs to cure them increase.

The fact is that Real Estate, perhaps with the exception of those properties acquired strictly as “investments” with documented income, properly written leases and paying tenants, is generally not something given its expense and complexity that the typical buyer would want to purchase without an in-person showing let alone removing the protection of an inspection contingency. Technology, however advanced, has its limitations.

The overall economy, despite some people touting specific statistics, has serious issues that will keep some out of the market. Statistics aside, what are you planning to do? Real Estate is generally a long-term investment unless you are looking to fix and flip it or planning to move within a short period of time. There are opportunities out there. As with the stock market, it is very difficult to pick the best time to make a move. All you can do is get the best available information, determine what is in your best interests and then start the process. I am a phone call or email away and getting started is easy once you take action.

If you want or need to sell any type of Real Estate, now or in the future, whether you tried and did not succeed before or are planning for the first time, it is never too early to start the planning and preparation. Please do not wait for what you think is a better or the best time to start. Buyers look all year long and can only see and buy properties that are available to see. Based on the available information, is waiting something you would consider?

There is no time for inexperience, empty promises or false expectations! 

HIRE WISELY:  We are not “all the same”!

The 2022 Real Estate Market: Bubble or Not?

I listed and sold Real Estate during the build-up to the crash of 2008. I contend that this market is NOT the same. Let me explain.

Google defines “bubble” as a good or fortunate situation that is isolated from reality or unlikely to last. Good? Fortunate? That depends on your perspective which makes the definition vague, allowing people see both markets as more similar than they are.

Whatever you think caused the crash in 2008, I will focus on my personal experiences. Starting around 2002, the specific months and years involved varied across the country, interest rates dropped dramatically to generate buyer interest. Interestingly enough, the rates that created that heated market were very much like what we see today which has many complaining about rising rates. How is that for perspective?

In addition, and very troubling, lending standards loosened dramatically. The changes included a reduction in the minimum credit score required to “qualify” for a loan as well as increased ratios, meaning that prospective buyers could use more of their gross and net income to buy Real Estate. Ever hear the phrase “house poor”? Let me digress for a moment.

I have always asserted that the smartest people on the planet worked in finance of some sort. Not to disparage other professions but it is impressive to see how financial people use data to make decisions. I wish “analytics” in sports were as good but the issues with them likely relate to who is using them.

Here is my point. Lenders are NOT in business to loan money. Nor are they in business to turn down “credit worthy” borrowers:  there are no awards for “most declined business”! Lenders are in business to MAKE MONEY plain and simple and they do that by lending money to “credit worthy” borrowers. Many companies quickly sell their loans as investments in the borrowers using the Real Estate as collateral if the borrower defaults. They do NOT want to evict people to take ownership of the Real Estate. Doing that, in addition to the emotion of displacing homeowners, is costly and time consuming, perhaps costing them tens of thousands of dollars and the properties are often in disrepair.

There are two major components to making loans. First, the prospective borrowers must demonstrate their “credit worthiness”. Many joke that lenders will only lend money to people who can prove that they do not need the money. Anyway, lenders use “metrics” to assess how viable a prospect is. I do not know how they determine the “benchmarks” they use but do not believe that they intentionally discriminate although I am sure that some people let personal bias affect how they do business. Others may commit fraud to enrich themselves. I will focus on how things are meant to work. The standards are the same for ALL people as far as I know so, just because one group seems disadvantaged by the metrics, does NOT prove anything wrong happened. That is a lesson I think many need to learn.

The second component is an appraisal of the property to ensure that the lender is making a smart investment and, worst case, can recover their money should the borrower default. I have heard of issues where some allege that specific groups suffer bias with appraisals but think some of that may have more to do with location, features and condition rather than simply assuming that appraisal issues relate to the owners or prospects but that is a subject for another day.

During the years 2002 through 2008, it seemed like many borrowers with lower credit scores AND

higher “ratios” than used historically were buying homes. The “ends seemed to justify the means” and helped sell a lot of houses, enriching many. It also seemed like every sale was a “new high” for the local market. Then, the market hit a wall. It was destined to happen sooner or later regardless of what many thought. How many sellers turned down good offers, assuming others were coming. How many buyers thought they could delay buying waiting for something better? Delaying likely benefited buyers more than sellers unless the buyers were truly able to finance and own Real Estate.

Unfortunately, many borrowers were sold “adjustable” interest rate loans to “qualify” with little consideration about what would happen when their interest rates reset to higher fixed rates. In addition to the revised lending standards proving problematic, this change led to many new owners being unable to continue making their monthly payments. The new word of the day was “short sale” where owners were allowed to sell their houses even though the proceeds were not sufficient to pay off the debt. It was preferable to “foreclosure”.

As far as the effects on the Real Estate market, they happened in stages. Early on, many houses that had not sold earlier were now selling and many new buyers were able to achieve the American Dream, if only for a short time. The initial reaction was a surge in buyers, clearing out our prospect “pipelines” as many who had been “waiting” to buy jumped off the fence.

Then the market shifted:  the imbalance of new buyers and “For Sale” houses created stiff competition and drove prices up. It reached a point where the combination of historically low interest rates and historically high selling prices resulted in monthly payments similar to what would have occurred with “normal” interest rates and selling prices. However, the major difference was that you could re-finance a high interest rate but NOT a high selling price. While sellers continued to achieve great results, buyers were being impacted. Once adjustable rates started to reset to higher fixed rates the market came to a screeching halt. If you look at statistics in my market for 2008 and 2009 you will see a precipitous drop in prices.

The “bottom line” is that the 2002-2008 market was leveraged with many instances of bad financing decisions resulting in the “bubble bursting”. The “irrational exuberance” of many buyers hurt them for many years to come. As recently as a few years ago I was still meeting sellers whose property values were well below what they had paid years before. Some refused to sell for less than what they paid even though they had a lot of equity while others had used their home’s equity like an ATM and simply owed too much to try selling. There were many lessons to be learned, but did we? I still hear talk about trying to get more groups involved in home ownership. That is great but the devil is in the details and the end does not justify the means! Instead of lowering lending standards, focus on why some people have issues with credit scores, managing debt and earning a good income. Raising the minimum wage was not a viable answer either and the effects are starting to become apparent!

The current market, while some may assume it meets the Google definition, has some similarities but a very different “cause” and likely a different outcome. The pandemic suppressed inventory levels. Some sellers did not want buyers coming into their homes. Some were financially affected by the lockdown and could not buy their “next home”. Many buyers were reluctant to visit homes or were also financially impacted. However, many buyers were still looking even though inventory levels were low. The imbalance created a serious sellers’ market resulting in intense competition and huge price surges. That being said, it “appears” that these buyers were financially qualified although I cannot state how valid appraisals are in a market like this as no one has a crystal ball. At some point pricing has to stop rising and perhaps start to decline, doesn’t it?

Assuming (and hoping) that the typical new owner is able to make their monthly payments, I wonder how many will suffer repercussions such as “buyer remorse” if they bought “sight unseen” and/ or without inspections? How will what they paid impact their future decision-making if they think about moving? A major difference between markets is that we are not seeing “short-sales” and “foreclosures” resulting from loose lending standards. While both outcomes will always occur, the current causes have more to do with the overall economy.

There is a lot more to what caused these two similar markets and it remains to be seen what evolves in the next few years. As far as whether the current market is a “bubble” or not depends on how you define the term. To me, there is quite a difference between lowering lending standards so more people can become homeowners and what is happening today when buyers “seem” financially qualified even if paying over asking price and being extremely creative to gain a competitive advantage. Even if sales prices tumble, which they may as some owners enter the picture after the pipeline of buyers has dried up, to me that is more like a “stock market” correction and not a “bubble” based on faulty underpinnings.

Semantics? Perhaps but I have heard too many equating the two markets. While I respect and understand buyers expressing concern about buying Real Estate today, wondering if prices are sustainable, there is never a guarantee that Real Estate prices will appreciate in a straight-line, if at all. Look at the stock market regularly and you will see this in action. There is always risk in ANY “investment” but what are the alternatives? If you are renting, is that a more prudent bet than owning? You will never recover your rent payments and they continue for as long as you rent. If you have delayed your plans to move, what is the cost to your personal happiness and any other factors impacted by your staying put wherever you are?

Buying and selling Real Estate are personal decisions that deserve a lot of consideration. This type of market does not typically offer time to decide. These are emotional decisions justified with logic. Planning and preparation are critical even if the time available is shortened. The time to plan and prepare is not after you find a house you think you like but are stuck watching someone better prepared buy it. Start before looking! Some lessons from the real “bubble” should be helpful.

Contact me in 5 or 10 years and we will have a clearer picture of what happened!

There is no time for inexperience, empty promises or false expectations!

HIRE WISELY:  We are not “all the same”?

Delaware County PA June 2021 Residential Housing Market Update

Tri-County Suburban REALTORS and Showing Time have released their June 2021 Local Market Insight report for single family homes in Delaware County Pennsylvania.  The report uses Bright MLS statistics.  If you would like more information about this or any other County or any specific municipalities in the Delaware Valley, please contact me or visit my web site, AndrewWetzel.com.  I am only a phone call, an email or a text away!  I respond promptly to all inquiries.

The Real Estate market continues to recover from the pandemic shutdown and resulting economic impact.  As always, your experience may differ depending on your location and how you have been personally affected.  As I always say, the decision whether or when to sell or buy Real Estate is a personal one influenced by a number of lifestyle factors and external variables.  The past year or so typifies that.  Some have not been deterred causing a frenzied sellers’ market while others have decided to delay their plans to sell or buy.

The report compares current month and year-to-date results to one-year ago.  We are past the halfway point but the statistics continue to include pre- and post-pandemic time frames so it is not a true “apples-to-apples” comparison.  As with all Real Estate statistics, two things are true.  First, the performance within individual zip-codes can and will vary significantly from the overall County.  Real Estate is local and results can vary greatly from neighborhood to neighborhood and even block to block.  There is no such thing as a “national” Real Estate market any more than there is a national weather forecast so, if you are thinking about selling or buying, please contact me for details about your areas of interest.  I can provide current information and keep you informed about the evolving market as well as provide you with the knowledge and insight to help you decide what works best for you.

My second point is that, unfortunately, all Real Estate statistics involving sold data are stale.  This is especially true if you are relying on Internet valuation models which use recorded data rather than up-to-date Bright MLS information.  Even then, while a sale may be reported as having settled or closed recently, the real question is when was the offer negotiated?  Typically, sales can take 45 to 60 days to close so the market today may be different from when the offer was presented and negotiated.  This is especially true as market conditions change.  Up-to-date information, even if not perfect, is important!

As far as the statistics, please remember that these numbers include a variety of single-family homes throughout the County.  There were 1003 new listings in June 2021 compared to 880 in June 2020, an increase of 14%.  YTD 2021 shows 4802 new listings compared to 3800 in 2020, an increase of 26.4%.  The 5-year June average is 906 new listings.  There were 665 active listings in June 2021 compared to 875 in June 2020 with a 5-year average of 1477.  Inventory levels continue to rise but the “Months of Supply” is below one month at .7 which is down 70% compared to last year.  There were 908 closed sales in June 2021 compared to 408 in June 2020, an increase of 122.5%.  YTD 2021 shows 3699 closed sales compared to 2555 in 2020, an increase of 44.8%.  The 5-year June average is 756.  The median sold price was $290,000 in June 2021 compared to $259,500 in June 2020, an increase of 11.8%.  YTD 2021 shows a median sold price of $265,000 compared to $235,000 in 2020, an increase of 12.8%.  The 5-year June average is $256,250.

Here are two other interesting June 2021 vs June 2020 statistics:  (1) the Sold vs. List Price Ratio was 102.4% compared to 97.1%; (2) the average Days on the Market was 13 compared to 38.  As usual, properly priced houses are selling fast and achieve more than their asking price.

How you interpret all of this information and data is subjective, meaning you can draw a variety of conclusions and then make decisions based on what you think.  Does it make you any more or any less likely to want to sell or buy?  If you are thinking about selling, know that history suggests that markets change suddenly.  Some will try to “time the market” and get as much as they can.  Many owners still regret not selling during the last seller’s market.  Some waited too long and prices fell or they wanted too much for their house.  If you are thinking about buying, do you worry about prices continuing to rise, do you worry about overpaying or are you waiting for prices to drop?  How many wish they had bought months ago?  If you need or want to sell one house to buy another, this can get even more complicated as you try to coordinate two processes.

All of this underscores the need to work with a professional.  The internet and advice you get from family, friends and the media is likely very general and subjective.  In my opinion, much of the well-reported “frenzy” created erratic behavior.  Assuming buyers did what they thought or were told they needed to do to “win”, even without really knowing if others were bidding on the same house, do they or will they regret their decisions?  Many agents will tell you that they are shocked by buying “sight unseen”, waiving inspections and going well over asking price.  I have no doubt that we will be talking about this time period for years to come.  I hope that it all works out as the market stabilizes and then shifts into a buyer’s market.  Only time will tell.

What about the properties that did not sell?  Many came off the market and remain unavailable.  Did owners delay, change or give up their plans?  While buying activity has generally been strong, some sellers are reluctant to allow showings or may have issues holding them back.  Given the statistics, are people making an informed decision or reacting to what they “think” is happening in their local market?  A brief conversation may be very helpful if you have any questions about selling or buying.

Anyone thinking about selling or buying needs to understand their local market and decide how to react to it.  The effects of buying and selling remain for years as does inaction.  These are important decisions and likely require the knowledge and insight that an experienced, trained and educated professional can provide.

I tell my clients that I cannot guarantee that their house will sell if it is on the market but am fairly certain that it won’t if they keep it off the market.  Anyone trying to sell now may have less competition and more offers to consider.  Buyers may have more competition and fewer houses to consider.  Hiring an experienced, trained and educated professional is more important than ever.

No matter how good the market may appear, every house will not sell.  Houses may get showings without generating offers unless buyers think they are priced within the range of their perceived “worth”, whatever that means today.  Most property listings whose contracts are canceled or allowed to expire have asking prices considered high for their local market and/ or they were poorly marketed, meaning that some buyers and agents may not have even known that a property was available to look at or purchase.  Some buyers may make an attractive offer just to control the process only to have remorse later as inspection results are revealed or they see another property they prefer more.

Some buyers may not be willing to look at houses priced high compared to the rest of the market:  why try to negotiate a price down when other similar properties are available at more competitive prices or others offer more for the same price?  Many sellers open to negotiating their price will never get the chance.  I will be happy to discuss specifics with you.

Statistics aside, what are you planning to do?  Real Estate is generally a long-term investment.  There are always opportunities out there.  As with the stock market, it is very difficult if not impossible to pick the best time to make a move.  All you can do is get the best available information, determine what is in your best interests and then start the process.  Getting started is easy once you take action.

If you want or need to sell any type of Real Estate, now or in the future, whether you tried and did not succeed before or are planning for the first time, it is never too early to start the planning and preparation.  Please do not wait for what you think is a better or the best time to start.  If you need to sell in order to buy, let’s have that conversation.  Now may be the best time to start planning.

There is no time for inexperience, empty promises or false expectation!

HIRE WISELY: We are not “all the same”!

My Buyer’s Offer Did Not Get Accepted; What Can They Do? Part 3 of 4: The Offer

Whether you are starting the process of buying your first or your “next” home, actively engaged in house hunting or you have already been denied a house you really wanted to own, I want to share some time-tested advice.  I am going to cover this from four perspectives.  This is part 3 of 4.  This is a broad topic with no “one size fits all” answers.  My advice comes with two disclaimers:  this is not intended as legal advice and it is not meant to interfere if you have an existing business relationship.

Let me start with the premise that a buyer or you made an offer and it was rejected.  If a buyer makes what they think is a reasonable offer and the seller does not accept it, they should have no regrets.  Easy for me to say.  If yours was the only offer, I would assume that you had a chance to negotiate with the owner but could not reach a mutually beneficial solution.  If you were competing with other buyers, only one offer could win.  Did the buyer have the right expectations about the process and how it might go?  Could or should their agent or the listing agent or the seller have done anything differently?  If the seller was given an opportunity to review all offers and was properly informed of any possible interest that existed and they accepted what they thought was the best offer, there may be no valid  reason to complain about the outcome.  Every signed agreement does not close so you may get another chance, if you want one, but do not assume you will.  In fact, depending on the type of Real Estate market, you may want to assume that you have competition and that you will not have a chance to change your initial offer.

I provide my buyer-clients with knowledge that I have gained through my years of experience, training and education.  I have also learned a lot from conducting mediations between buyers and sellers and listening to ethics complaints about agents.  Fundamentally, I believe that the process of buying or selling Real Estate is best looked at as a business decision, not a personal one.  It is also not a retail transaction.

Looking for a house can become a full-time job but it is worth it.  Your life will get back to normal after you succeed.  Bad purchase decisions can be costly and their effects can last a long time.  Real Estate is typically our biggest asset and requires our largest investment so buying or selling it requires planning and preparation.  It deserves our full attention.

As I discussed in part two, The Search, once a buyer starts to identify possible houses to consider looking at and buying, there is a process to narrowing the list down to the best and getting in to see and evaluate them as quickly as possible.  I remind buyers that proper planning and preparation will position them to compete better and that they are not the only buyer seeing the search results they receive.  It all comes down to making an offer that will appeal to the seller or, at the very least, maximize the chance that the seller will offer a counter-proposal.  The purpose of negotiating is to keep talking.  While that can wear someone down, it is better than silence.  That being said, buying Real Estate can be very competitive so a buyer might want to assume that they have competition and may not get a second chance to negotiate after making an offer.  In some cases, you may want to make your “highest and best” offer from the beginning.  Unless you are concerned about over-paying, if your offer does not get accepted, you should have no regrets.  Inspections and a mortgage appraisal will provide some guidance about the property condition and the market value in any case.

When a buyer decides to make an offer on a house, only they know what they are thinking and hoping.  Did they make their best offer or are they expecting a counter-offer?  Whether they are suddenly inspired when they see a house or the decision comes after giving it some thought, if they have approached the process in a practical way, regardless of whether their offer gets accepted or not, they will at least know that they did their best.  That may be a small consolation but a buyer can only do so much.  Of course, if the search was haphazard or the buyer wasn’t completely convinced that a specific house was the best one for them but they decided to make an offer anyway, they may not know how to react even if they succeed.  Buyer remorse, meaning feeling that there may be a better option now or later or, even worse, if they come to believe that they made a bad decision after settlement, can be a problem.  There may be opportunities for either party to terminate a sale.  What will they to do?  Having remorse or doubts after closing is too late!

Some buyers will go “all-in”, perhaps to excess, with an offer.  This could include any or all of the following:  making an offer “sight unseen”, going above the asking price, keeping the contingencies to a minimum or waiving some or all of them.  Buyers have a lot of options when they really like a house, especially if they think or know there is competition.  What they do can be done to maximize their chances for success or it can be done to get a house under contract while they really take the time and effort to decide whether they picked the best house.  It is not for me to judge these things but there is a seller involved and one or two agents.  They can be impacted by a buyer’s motivation especially if the buyer is really unsure if they want to own the house.

How many buyers make offers “sight unseen” and cancel a sale using a contingency like a property inspection once they see inside?  The cost of inspections is minor compared to completing a bad purchase.  How many buyers make great offers and then ask for repairs or credits later to recover some of what they offered?  What about so-called “love letters” to the seller?  How many buyers just decide not to move forward and are willing to risk losing their deposit?  As I like to say, buying and selling Real Estate are business decisions justified with logic.  It is never over until the seller has the buyer’s money and the buyer has the seller’s keys.  So, what can prevent a buyer’s offer from being accepted?

1. Their offered price is not the highest.  For some sellers, the price is their primary motivation.  Oddly enough, in some cases sellers refuse the highest offers if they don’t think their house will appraise;
2. The buyer’s contingencies are not the best for the seller.  Perhaps the seller wants a “clean” sale, meaning few hurdles, or the buyer has a house to sell so they can buy their “next home”;
3. Something else within the contract is not the best for the seller.  This could include the settlement date, the amount of deposit money or anything that offers the buyer an option and the seller a choice.  Some agents and buyers use an “escalation clause” in the hopes of learning what it will take to make their offer better than the competition.  Many listing agents and sellers refuse to share details while expecting the offer to be improved.  Suppose there are multiple offers with these same clauses?  However you view them, they are not perfect and may not be enough to overcome stronger offers.  I view these clauses as showing that a buyer may have made a low offer and will raise it if they have to;
4. The offer does not include buyer financial information such as proof of funds for a cash offer.  Many PA agents use a “BFI” or “Buyer’s Financial Information” form, which I liken to a Seller’s Property Disclosure Statement.  Buyers and sellers basically want to know that the other person is serious and able to complete the sale.  The BFI provides an overview of the buyer’s financial information for a seller and their listing agent to review when comparing offers.  It complements a lender’s pre-qualification letter but, in my opinion, carries more weight as the buyer prepares it and the seller has legal remedies if the buyer misstates something whereas there may be no remedy for what a careless lender does.  Sad to say but I have seen some lenders provide letters that were meaningless.  I have heard of situations where a BFI negated a lender’s letter resulting in a declined offer.  Some buyers are reluctant to provide their financial information; some buyer agents and listing agents do not ask for it.  In a competitive situation this can be a problem.  Give a seller a good offer and convince them that it will settle and your chances should improve dramatically.  Most sellers want to minimize their own risk.

When a seller only receives one offer, they are more likely to negotiate if the offer is not exactly what they were looking for.  However, in a competitive or multi-offer situation, a buyer may not get a second chance to improve their “first impression”.  I remind buyers that, regardless of the type of market, there is no guarantee that they will get a second chance.  While many buyers are reluctant to make their “highest and best offer”, they need to understand the risk.  Wondering what happened later is uncomfortable.

For example, when I give a blank BFI to buyers, some will ask me how much they should reveal.  Obviously, they need to accurately disclose income and debt information and show at least enough assets to cover their closing costs.  However, some buyers are reluctant to show more than they need to justify their offer, typically saying that a seller may ask them for more money.  The same occurs with the pre-qualification letter.  Let me address both at the same time using a hypothetical scenario.

Suppose a buyer wants to offer $285,000 on a $300,000 house and they are financially able to go as high as $350,000.  Do they show enough to cover their offer?  The asking price?  Or do they show everything?  I say show EVERYTHING!  Again, if there is no competition, which you may not know, they will likely get a “second chance” if the seller wants more than $285,000.  However, if there is competition, a seller may just go with what “appears” to be a “stronger” offer or at least have a discussion with those agents who “appear” to be representing stronger buyers.  They may assume they have seen your best offer and move on.

So what if a seller wants you to raise your offer because they know you can?  Do you expect them to lower their price when you learn they have no mortgage?  Even if they ask, as I said earlier, the point of any negotiation is to keep talking to see if they can reach a mutually-beneficial agreement.  Most sellers will be happy to know that a buyer is not maxed out with their offer which could mean there is a greater chance of their loan being denied.  Even if they ask and you say no, you had a chance.  You may come to regret what happens but you had a chance.  It beats the alternative!

Ironically, when a buyer decides to raise their offer, it is likely that their expectations for the property inspection(s) also rises.  On the other hand, a seller who accepts less than they really wanted may be less enthusiastic when asked to make repairs or issue credits for repairs.  Either way, the goal is to keep the conversation going although one or both parties may tire if the process drags on and on and on.  While you continue talking, the house remains on the market allowing other buyers the opportunity to make an offer!

The bottom line is that a buyer needs to know what is in their best interest, understand the market they are in and make an informed series of decisions when making and perhaps negotiating an offer.  When an offer gets rejected or the parties cannot reach an agreement after going back and forth, a buyer needs to evaluate what happened to avoid repeating the same process over and over again.  I have worked with buyers who had several offers rejected.  For some, re-engaging in the process is tough.  Some give up for awhile while others jump right back in.  They may not know exactly what happened and they likely won’t find out what price the seller accepted for several weeks.  They may never know more than that.  A decision to buy or sell Real Estate is an emotional decision justified with logic.  Some are simply better prepared to put it all into perspective and continue moving forward.

There is no time for inexperience, empty promises or false expectations.

HIRE WISELY:  We are not all the same!

The Type of Market and How it Affects Searching for Price

I recently wrote a blog on “Multiple Offers” and how two different agents viewed them.  I want to explore one of their comments further.  One agent said that multiple offers are the result of pricing a property too low.  While I don’t agree, I do feel that there is something to this.  Let me explain.

Suppose an agent is working with a buyer “pre-qualified” and comfortable spending up to $300,000 on a house.  Pick any price.  What “price range” should they search?  I say “range” because no one would search for one specific price.  You can start at a certain number or go up to a certain number.  This is why pricing is different than before we had the Internet.  Agents have to “factor in” what a consumer may be thinking rather than trying to interact with the mindset of an experienced, trained and educated agent.  Let’s start with the minimum first.

For some buyers, such as investors, I do not set a minimum.  They may be open to considering whatever is in their search results and open to driving by or studying what I send them to eliminate houses that do not appeal to them.  Buyers looking for their next home, especially if they are financing the sale, may need to pick a starting point to meet their needs and abilities as well as the requirements of their financing.  Some houses simply need too much work.  How far they look below their “top number” depends.  Sometimes the areas that interest them or the features they include will provide some guidance.  Otherwise, they may evolve into “knowing” that anything below $x is a waste of time.

What about the top end?  They are “pre-qualified” and comfortable spending “up to $300,000” so why wouldn’t that be the number?  This is where it gets tricky.  The market will suggest or dictate what you should do if you want to succeed.  In a buyer’s market, if houses are getting less than full price, you can search higher than their top number.  That does not guarantee success as there may be competition even in “slower” moving markets.  A seller may still want full asking price.

In a seller’s market, when houses are getting more than full price, you may want to search lower than $300,000, expecting to have to raise your offer, if given the chance.  In a hot market every house will not sell so this is not a blanket statement but you may not succeed by offering full price.

The MLS offers data comparing the selling price to the opening and final asking prices.  However, “data integrity” may be lacking if incorrect information is entered, possibly impacting the overall report.  An agent has to look “within the numbers” to see what is really happening with pricing.

A buyer needs to know their financials, including their comfort level, and an agent needs to interpret the market so that they can properly advise their client.  How much to offer is still the buyer’s decision.  In some markets, offering “full price” will get a house “under contract”.  In other markets, the “asking price” is where the bidding starts.  The price is either a ceiling or a floor.  Ultimately, prices have to appeal to buyers, agents and appraisers.   Even cash sales have some parameters.  Sellers set the asking price and buyers determine the value.

That being said, some sellers and their agents purposely underprice a house to expose it to more people in the hope of generating multiple offers.  As I often say,  Real Estate is not retail!

There is no time for inexperience, empty promises or false expectations.

HIRE WISELY:  We are not all the same!

Delaware County PA March 2021 Residential Housing Market Update

Tri-County Suburban REALTORS and Showing Time have released their March 2021 Local Market Insight report for single family homes in Delaware County Pennsylvania.  The report uses Bright MLS statistics.  If you would like more information about this or any other County or any specific municipalities in the Delaware Valley, please contact me or visit my web site, http://AndrewWetzel.com.  I am only a phone call, an email or a text away!  I respond promptly to all inquiries.

Many areas continue to be affected by the pandemic and resulting economic impact.  As always, your experience may differ depending on your location and how you have been personally affected.  As I always say, the decision whether and when to sell or buy Real Estate is a personal one influenced by a number of lifestyle factors and external variables.  The pandemic typifies that.  Some have not been deterred causing a frenzied sellers’ market while others have decided to delay their plans to sell or buy.

The report compares current year-to-date results to one-year ago, same time period.  It only covers three months and crosses over from pre-pandemic to pandemic time frames so it is not “apples-to-apples”.  As with all Real Estate statistics, two things are true.  First, the performance within individual zip-codes can and will vary significantly from the overall County.  Real Estate is local and results can vary greatly from neighborhood to neighborhood and even block to block.  There is no such thing as a “national” Real Estate market any more than there is a national weather forecast so, whether you may be thinking about selling or buying, please contact me for details about your areas of interest.  I can provide current information and keep you informed about the evolving market as well as provide you with the knowledge and insight to help you decide what works best for you.

My second point is that, unfortunately, all Real Estate statistics involving sold data are stale.  This is especially true if you are relying on Internet valuation models which use recorded data rather than up-to-date Bright MLS information.  Even then, while a sale may be reported as having settled or closed recently, the real question is when was the offer negotiated?  Typically, sales can take 45 to 60 days to close so the market today may be different from when the offer was presented and negotiated.  Up-to-date information, even if not perfect, is important!

As far as the statistics, please remember that these numbers include a variety of single-family homes throughout the County.  There were 811 new listings in March 2021 compared to 667 in March 2020, an increase of 21.6%.  YTD 2021 shows 1882 new listings compared to 1941 in 2020, a decrease of 3.0%.  The 5-year March average is 859.  There were 444 active listings in March 2021 compared to 848 in March 2020 with a 5-year average of 1337.  Low inventory levels continue to affect the market:  the “Months of Supply: is down 62% as compared to last year.  There were 518 closed sales in March 2021 compared to 486 in March 2020, an increase of 6.6% with a 5-year average of 498.  The median selling price was $256,000 in March 2021 compared to $229,900 in March 2020, an increase of 11.4% with a 5-year average of $214,370.

What effect did the large decrease in new listings have on the market statistics?  It created some anxiety resulting in multiple offers, perhaps well over asking price, and buyers taking other actions to make their offers more competitive.  These include buying “sight unseen” and/ or waiving inspections.  The result was a huge increase in selling prices along with a large decrease in the Days on the Market (DOM) which dropped from 43 to 27 and the “Sold to List Price” ratio which rose from 96.8% to 99.5%.  Again, these numbers vary throughout the County:  the underlying data shows a wide range of results in all categories among the 49 different municipalities in Delaware County.

Do we really have an inventory problem or pent-up demand?  I think we have both and it remains to be seen what happens in the long run.  I expect more sellers will take advantage of the market, even if buying is not an option and they decide to rent to take advantage of current selling prices.   How many buyers can this market continue to generate?  For better or worse, at some point the market will normalize which means two things.  First, many sellers may regret not taking advantage of the market.  Second, activity will slow as we exhaust the number of buyers, many of whom decided to buy early.  That is what has happened in the past.

On the other hand, some buyers may come to regret a hasty decision to get a property under contract at “all costs”.  Buying “sight unseen”, especially without inspections comes with a risk.  Sellers and their agents need to consider how to manage such offers as they may have appraisal issues and/ or be more likely to result in buyer remorse after the buyer gets to learn more.  Given the  expense and complexity of a typical Real Estate purchase, buyers and sellers need to fully understand what they are doing and what can go wrong.  Even with our property disclosure law in PA, many sellers either do not know about underlying issues with their properties or forget to disclose them.  Whatever your feelings about property inspections, they can provide important information to a buyer.  Getting a contract signed is only the first step to completing a Real Estate sale.

What about the properties that did not sell?  Many came off the market and still remain off the market.  As the pandemic has evolved, some properties did come back on the market but many have not.  Did owners delay, change or give up their plans?  While buying activity has generally been strong, some sellers are reluctant to allow showings or may have issues holding them back.  Given the statistics, are people making an informed decision or reacting to what they “think” is happening in their local market?  A brief conversation may be very helpful if you have any questions about selling or buying.

Anyone thinking about selling or buying needs to understand their local market and decide how to react to it.  The effects of buying and selling remain for years as does inaction.  These are important decisions and likely require the knowledge and insight that an experienced, trained and educated professional can provide.

I tell my clients that I cannot guarantee that their house will sell if it is on the market but am fairly certain that it won’t if they keep it off the market.  Anyone trying to sell now may have less competition and more offers to consider.  Buyers may have more competition and fewer houses to consider.  Hiring an experienced, trained and educated professional is more important than ever.

No matter how good the market may appear, every house will not sell.  Houses may get showings without generating offers unless buyers think they are priced within the range of their perceived “worth”, whatever that means today.  Most property listings whose contracts are canceled or allowed to expire have asking prices considered high for their local market and/ or they were poorly marketed, meaning that some buyers and agents may not have even known that a property was available to look at or purchase.  Some buyers may make an attractive offer just to control the process only to have remorse later as inspection results are revealed or they see another property they prefer.

Regardless of the amount of inventory, some buyers may not be willing to look at houses priced high compared to the rest of the market:  why try to negotiate a price down when other similar properties are available at more competitive prices or others offer more for the same price?  Many sellers open to negotiating their price will never get the chance.  I will be happy to discuss specifics with you.

Statistics aside, what are you planning to do?  Real Estate is generally a long-term investment unless you are looking to fix and flip it or planning to move within a short period of time.  There are always opportunities out there.  As with the stock market, it is very difficult if not impossible to pick the best time to make a move.  All you can do is get the best available information, determine what is in your best interests and then start the process.  Getting started is easy once you take action.

If you want or need to sell any type of Real Estate, now or in the future, whether you tried and did not succeed before or are planning for the first time, it is never too early to start the planning and preparation.  Please do not wait for what you think is a better or the best time to start.  Buyers look all year long and can only see and buy properties that are available to see.  If you need to buy in order to sell, let’s have that conversation.  Now may be the best time to start planning.

There is no time for inexperience, empty promises or false expectations.

HIRE WISELY:  We are not all the same!

Delaware County PA January 2021 Residential Housing Market Update

Tri-County Suburban REALTORS and Showing Time have released their January 2021 Local Market Insight report for single family homes in Delaware County Pennsylvania.  The report relies on Bright MLS statistics.  If you would like more information about this or any other County or any specific municipalities in the Delaware Valley, please contact me or visit my web site, AndrewWetzel.com.  I am only a phone call, an email or a text away!  I respond promptly to all inquiries.

The market continues to be affected by the pandemic and resulting economic impact.  The weather has also been a factor.  However, generally speaking, the results in many areas are encouraging and, as always, your experience may differ depending on your location and how you have been personally impacted.  As I always say, the decision whether and when to sell or buy Real Estate is a personal one influenced by a number of lifestyle factors and external variables.  The pandemic typifies that.  Some have not been deterred while many others have decided to delay their plans to sell or buy.

The report compares current year-to-date results to one-year ago, same time period.  This report only covers one month so I would not over-react to the information.  As with all Real Estate statistics, two things are true.  First, the performance within individual zip-codes can and will vary significantly from the overall County.  Real Estate is local and results can vary greatly from neighborhood to neighborhood and even block to block.  There is no such thing as a “national” Real Estate marketany more than there is a national weather forecast so, whether you may be thinking about selling or buying, please contact me for details about your areas of interest.  I can provide current information and keep you informed about the evolving market as well as provide you with the knowledge and insight to help you decide what works best for you.

My second point is that, unfortunately, all Real Estate statistics involving sold data are stale.  This is especially true if you are relying on Internet valuation models which use recorded data rather than up-to-date MLS information.  Even then, while a sale may be reported as having settled or closed today, the real question is when was the offer negotiated?  Typically, sales can take 45 to 60 days to close so the market today may be different from when the offer was presented and negotiated.  Up-to-date information, even if not perfect, is important!

As far as the statistics, there were 534 new listings in January 2021 compared to 586 in January 2020, a decrease of 8.9%.  The average number of active listings in January 2021 was 441 compared to 994 in January 2020.  Low inventory levels continue to affect the market.  There were 544 closed sales in January 2021 compared to 438 in January 2020, a 24.2% increase.  The median selling price was $240,000 in January 2021 compared to $202,000 in January 2020, an increase of 18.8%.  What effect did the large decrease in the number of properties being listed and available have on the market statistics?  It likely created some anxiety resulting in multiple offers, perhaps well over asking price, and buyers taking other actions to make their offers more competitive.  These include buying “sight unseen” and/ or waiving inspections.  The result was a huge increase in selling prices along with a large decrease in the Days on the Market (DOM) and the “Sold to List Price” ratio.  Do we really have an inventory problem or pent-up demand?  Time will tell.  Again, these numbers vary throughout the County:  the underlying data shows a wide range of results in all categories among the 49 different municipalities in Delaware County.

Generally speaking, the effects of what is happening remain to be seen.  Some buyers may come to regret a hasty decision to get a property under contract at “all costs”.  Buying “sight unseen”, especially without inspections comes with a risk.  Sellers and their agents need to consider how to manage such offers as they may have appraisal issues and/ or be more likely to result in buyer remorse.   Given the  expense and complexity of a typical Real Estate purchase, buyers and sellers need to fully understand what they are doing and what can go wrong.  Even with our property disclosure law in PA, many sellers either do not know about underlying issues with their properties or forget to disclose them.  Whatever your feelings about property inspections, they can provide important information to a buyer.  Getting a contract signed is only the first step to completing a Real Estate sale.

What about the properties that did not sell?  Many came off the market and remain off the market.  As the pandemic has evolved, some properties did come back on the market but many have not.  Did owners delay, change or give up their plans?  Buying activity has generally been strong but some sellers are reluctant to allow showings or may have issues holding them back.  Given the statistics, are people making an informed decision or reacting to what they “think” is happening in their local market?  A brief conversation may be very helpful if you have any questions about selling or buying.

Anyone thinking about selling or buying needs to understand their local market and decide how to react to it.  The effects of buying and selling remain for years as does inaction.  At some point things will return to whatever is “normal”:  how many will regret not taking action?  These are important decisions and likely require the knowledge and insight that an experienced, trained and educated professional can provide.

I tell my clients that I cannot guarantee that their house will sell if it is on the market but am fairly certain that it won’t if they keep it off the market.  Anyone trying to sell now may have less competition and more offers to consider.  Buyers may have more competition and fewer houses to consider.  Hiring an experienced, trained and educated professional is more important than ever.

No matter how good the market may appear, every house will not sell.  Houses may get showings without generating offers unless buyers think they are priced within the range of their perceived “worth”, whatever that means today.  Most property listings whose contracts are canceled or allowed to expire have asking prices considered high for their local market and/ or they were poorly marketed, meaning that some buyers and agents may not have even known that a property was available to look at or purchase.  Some buyers may make an attractive offer just to control the process only to have remorse later as inspection results are revealed or they see another property they prefer.

Regardless of the amount of inventory, some buyers may not be willing to look at houses priced high compared to the rest of the market:  why try to negotiate a price down when other similar properties are available at more competitive prices or others offer more for the same price?  Many sellers open to negotiating their price will never get the chance.  I will be happy to discuss specifics with you.

Statistics aside, what are you planning to do?  Real Estate is generally a long-term investment unless you are looking to fix and flip it or planning to move within a short period of time.  There are always opportunities out there.  As with the stock market, it is very difficult to pick the best time to make a move.  All you can do is get the best available information, determine what is in your best interests and then start the process.  Getting started is easy once you take action.

If you want or need to sell any type of Real Estate, now or in the future, whether you tried and did not succeed before or are planning for the first time, it is never too early to start the planning and preparation.  Please do not wait for what you think is a better or the best time to start.  Buyers look all year long and can only see and buy properties that are available to see.  Based on what we experienced in 2020, is waiting for Spring something you would consider?  If so, now is the time to start planning.

There is no time for inexperience, empty promises or false expectations!

HIRE WISELY:  We are not all the same!