Res­i­den­tial real es­tate mar­ket im­prov­ing - slowly

An in­dus­try ob­server says it would be fur­ther along in a nor­mal re­cov­ery but low in­ven­tory is hold­ing it back

Daily Local News (West Chester, PA) - - BUSINESS - By Brian McCul­lough bm­c­cul­lough@21st-cen­tu­ry­media.com @wc­dai­ly­lo­cal on Twit­ter

“There are just less houses for sale. The high end is very, very slow. Houses in the $200,000 to $450,000 range move very quickly but there just aren’t enough of them.” – Steve Storti, chief mar­ket­ing of­fi­cer at Berk­shire Hath­away

The re­gion’s real es­tate mar­ket in the first nine months of the year con­tin­ued its slow and steady re­bound from the re­ces­sion of 2007 but ac­tiv­ity re­mains be­low what some in­dus­try ex­perts ex­pected by this time in the re­cov­ery. First, the good news. Home sales in the Greater Philadel­phia re­gion con­tin­ued to grow through the first nine months of 2016, show­ing a 9.5 per­cent in­crease over the first nine months of 2015, with 59,744 homes sold in the first nine months of 2016, com­pared to 54,562 in 2015 and 47,253 in the first nine months 2014.

The data, pro­vided by Berk­shire Hath­away HomeSer­vices Fox & Roach in its HomEx­pert Mar­ket Re­ports, show a con­tin­u­ous growth pat­tern and steady im­prove­ment in the hous­ing mar­ket and con­sumer con­fi­dence.

Still, the pace is lag­ging com­pared to other re­cov­er­ies and what peo­ple in the busi­ness thought they would see by now, said Steve Storti, chief mar­ket­ing of­fi­cer at Berk­shire Hath­away. The cul­prit? Low in­ven­tory. “We’re pre­dict­ing con­tin­ued slow growth, mostly be­cause of low in­ven­tory,” Storti said.

“There are just less houses for sale. The high end is very, very slow. Houses in the $200,000 to $450,000 range move very quickly but there just aren’t enough of them.

“We would ex­pect to see more at the point in the re­cov­ery,” Storti lamented.

Ac­cord­ing to the re­port, me­dian home prices across the re­gion were up by 0.5 per­cent, go­ing from $220,000 in 2015 to $221,000 for the first nine months in 2016.

Monthly av­er­age in­ven­tory showed a de­cline by 12 per­cent from this time last year, with 33,422 homes on the mar­ket in the first nine months of 2016, com­pared to 37,989 dur­ing the same pe­riod in 2015. Av­er­age days on the mar­ket have con­tin­ued to shrink by 5.5 per­cent from 75 in the first nine months of 2014, to 73 days in the first nine months of 2015 to 69 days in the first nine months of 2016.

“While in­ven­tory con­tin­ues to re­main low and av­er­age days on the mar­ket is steadily de­clin­ing, it re­mains a seller’s mar­ket,” said Storti. “Home sales rose steadily over the last few years, which is a strong in­di­ca­tor that with con­tin­ued rea­son­able in­ter­est rates and a stronger econ­omy, the mar­ket will con­tinue to see good ac­tiv­ity over the com­ing year.”

The re­port found ex­ist­ing home sales in­creased across the board, with Philadel­phia County boast­ing the high­est num­ber of homes sold in the first nine months of 2016 with 12,179, a 13.5 per­cent in­crease com­pared to 10,732 homes sold the same time last year, fol­lowed by Montgomery County (8,403, +6.6 per­cent), Bucks County (6,084, +4.6 per­cent), Ch­ester County (5,293, +1.3 per­cent) and Delaware County close be­hind (5,140, +.93 per­cent). Cam­den County had the largest per­cent in­crease in the num­ber of prop­er­ties sold at 17.5 per­cent, jump­ing from 4,117 in first nine months of 2015 to 4,838 prop­er­ties sold in first nine months of 2016.

Ch­ester County posted the high­est me­dian sale price in the first nine months of 2016 at $315,000, an in­crease of 0.3 per­cent from 2015, fol­lowed by Bucks County ($280,000, +0.0), and Montgomery County ($269,000, +3.1 per­cent). Philadel­phia County posted the largest per­cent in­crease in me­dian sale price in the re­gion, jump­ing 7.6 per­cent from $158,000 to $170,000. Salem County posted the largest de­cline in me­dian sale price, with a de­crease of 8.8 per­cent at $125,000 in the first nine months of 2016, com­pared to $137,000 from last year at this time.

In­ven­tory re­mains low across the re­gion com­pared to the same time last year down by 12 per­cent. Philadel­phia County posted the high­est per­cent de­crease in monthly in­ven­tory by 20.6 per­cent (5,884 prop­er­ties), fol­lowed by Bucks County (3,090, -17.7 per­cent), Montgomery County (3,909, -6.0 per­cent), Mercer County (1,902, -15.4 per­cent), and Delaware County (2,810, -13.1 per­cent).

“We prob­a­bly un­der­es­ti­mated the ef­fects of 2008,” Storti said. “Peo­ple are hold­ing back, they may not have enough eq­uity built up” to con­sider mov­ing up in a house.

Other high­lights from the 12-county re­gion:

• Ch­ester County’s East­town Town­ship had the high­est me­dian price at $617,000 (-1.3 per­cent de­crease over last year), fol­lowed by West Pike­land Town­ship at $567,500 (a 14.1 per­cent in­crease over last year’s num­bers) and West Vin­cent Town­ship at $500,536 (a 6.5 per­cent from last year).

• Bucks County’s high­est me­dian sale price was in Up­per Make­field Town­ship at $704,325 (+10.1 per­cent), and Montgomery County’s Bryn Athyn Bor­ough at $700,000 (+15.2 per­cent), and Prince­ton in Mercer County at $880,000 (+6.7 per­cent).

• Montgomery County posted the high­est num­ber of sin­gle fam­ily homes sold in the first nine months of 2016 at 5,194 (a 6.3 per­cent in­crease from the first nine months of 2015), fol­lowed by Bucks County with 4,253, a 3.5 per­cent in­crease, Cam­den County with 3,696, a 16.7 per­cent in­crease, Burling­ton County with 3,597 sin­gle fam­ily homes, up 13 per­cent from the same time last year, and Ch­ester County with 3,470 homes sold at a 2.5 per­cent de­crease from the first nine months of 2015.

• Home sales in the Main Line in­creased from 2,253 homes sold in the first nine months of 2015 to 2,319 homes sold in the first nine months of 2016, up 2.9 per­cent. Me­dian home prices saw a slight in­crease of 1.4 per­cent from $409,000 to $410,500 in this year’s pe­riod.

• Philadel­phia County posted the high­est num­ber of town­houses and row homes sold in the first nine months of 2016 at 8,279, a 12.5 per­cent in­crease from the first nine months of 2015, fol­lowed by Montgomery County (1,880, +7.7 per­cent), Ch­ester County at 1,252 (+10.5 per­cent), and Bucks County (1,139, +8.6 per­cent).

• Penn­syl­va­nia led the Tri-State re­gion in high­est me­dian sale price in the first nine months of 2016 at $240,000 (+2.1 per­cent), fol­lowed by Delaware at $213,725 (+1.8 per­cent) and New Jersey at $186,000 (-2.1 per­cent).

PHO­TOS BY PETE BANNAN — DIG­I­TAL FIRST ME­DIA

A home for sale on West Pleas­ant Grove Road in West­town.

A house sold on West Miner Street in West Ch­ester.

A home for sale in Con­cord Town­ship in Delaware County.

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