What a difference a year makes. A year ago, if you were in the market to buy a home you had plenty of houses to choose from and probably felt you could negotiate a sweet deal with a seller who may have been on the market for a few months. Not any more. It is officially a seller’s market right now across the country, and Southern Schuylkill is no exception to the rule.
All summer, buyers saw new properties come on the market, only to disappear and go under contract in shorter and shorter time frames. We had buyers who took their time looking at homes who were disappointed when they finally made an offer to realize another buyer moved in and had an accepted offer. Buyers who made low offers – trying to discount the asking price by 10 or 20 percent or more – lost out to buyers who made better offers. Talk to any real estate salesperson and this was the story for the first half of 2017, and the data supports this.
The MLS is the “multiple listing service” where real estate salespeople enter the properties they have for sale, so that other agents can see what is for sale. Think of the MLS as a storefront where agents share information about the houses for sale. Agents bring their inventory in (the properties listed for sale) so that other agents can browse the properties and bring their buyers in to see the houses. The statistics below are from TREND MLS (which is soon changing its name to Bright MLS), which is the MLS that agents in Schuylkill and Berks Counties (and beyond) use to distribute their information to each other.
Houses for sale truly are just inventory that needs to be sold, and they follow the laws of supply and demand just as other commodities do. Looking at inventory, in the second quarter of 2015 there were almost 1000 homes for sale in Schuylkill County (985 to be exact). In the second quarter of 2016 that figure dropped a whopping 28 percent to 709, and this year it dropped another 13.5 percent to 613. So a buyer in 2015 had significantly more houses to choose from that a buyer this year. That is how we know it’s no longer a buyer’s market, and has shifted to a seller’s market.
Along with a decrease in number of homes for sale, we see a steady increase in the number of sales as buyers are eating up the inventory. In 2015 there were 280 closed sales in the second quarter. This jumped almost 8 percent to 302 last year, and another 7 percent this year to 323. So we’ve got less homes coming on the market and more being sold. The shrinking inventory is good for sellers, but bad for buyers as it pushes up prices. The median sales price from a year ago to 2017 is up almost 17 percent, to $87,750. This number is the median sales price across all of Schuylkill County, not just the southern region.
Our MLS tracks not just inventory but also appointments made on the properties. If an agent uses ShowingTime (an appointment scheduler tied into the MLS) we can figure out which price ranges are getting the most activity. In June 26 percent of the properties were priced between $100,000 and $199,999 yet they received 38 percent of the showings. This is the “hottest” price range then in our area, as it’s getting the most number of appointments. The highest priced properties (over $500,000) received the fewest showings, which makes sense. The higher you price your home, the smaller the number of people who may be able to afford the house, and the number of appointments will drop.
SELL NOW OR WAIT?
Normally our best selling season is the second quarter of the year. The first two months are slow, with buyers starting to come out to look seriously in March and April. As we get through the summer, the closer you get to August the appointments slow down (as families with children want to be in their new homes before the start of school). We then get a new burst of buyer activity in September and October, and the closer we get to November the appointments slow down again. That is our historical sales cycle and sometimes that does vary.
If you’re thinking you missed the busy spring/summer and are putting off selling, you may want to reconsider that. The tight inventory is in your favor, and you may get more for your property this fall that you think. Some sellers take their unsold homes off the market in late fall, planning on putting them back on in March. With the lack of good inventory this will only help the sellers who stay on the market.
Buyer activity doesn’t come to a halt in November, but it does slow down. Buyers who are out looking in December and January may even be more serious than the simply curious who come out in spring. If a buyer is looking in inclement weather, they truly want or need to buy now.
One of our sellers recently asked me if I see a housing bubble coming – a time period of rapid rising prices, followed by a crash. This is what happened in 2007 when we hit the peak of the market here, and then a quick decline in values. Some home owners lost 25 percent of the value of their home suddenly. I don’t see this happening. The reasons for the crash were (1) an oversupply of housing caused by home builders who were building faster than we could sell the inventory, and (2) too relaxed lending standdards that allowed weak, unqualified buyers to easily obtain financing. In 2017 those situations don’t exist.
If you are going to list your home for sale, look at the reason you decided to sell in the first place and determine whether it’s worth waiting. Nationally, today’s housing inventory is at a 20-year low. Demand is high and supply is low. We don’t know where prices will go in 2018. Experts predict mild appreciation for the next few years. Now may be time to take advantage of the seller’s market rather than waiting.
IF YOU ARE BUYING NOW
If you are looking for your next house, the information above won’t be any news to you. You’ve probably been online watching new houses pop up and disappear over a weekend. Your best steps to make sure you have a good shot at getting your dream house are to get ready to write that offer quickly.
Get prequalified with a local lender. When you find the right house you may have to move quickly so get ready. Talk to a local lender, get a preapproval letter and know exactly which loan products are the best one for you and your situation.
Ask your agent to send you automatic updates. Don’t wait for them to forward you listings. You want instant auto updates. It’s easy to set up and means you won’t miss any new properties.
When something pops up of interest, set up an appointment quickly. We had a new listing go active on Friday recently and it was under contract by Monday morning. Don’t wait or you may miss out.
Don’t make a lowball offer if you know it’s a “hot” property. If the house is in a desirably neighborhood in the $100-200,000 range especially, know that there may be lots of showings in the first two weeks. If you’re making an offer in that early time frame you decrease your chances of getting the house if you come in with a low offer and they have good activity.
Not all sellers will give you a head’s up or opportunity to counter offer. If you want it and it is the perfect house for you, then go in with a good solid offer to start. You may not get a second chance and may lose the property if a better offer comes in so if you want it, don’t play games.
Erica Ramus is the Broker/Owner of Ramus Realty Group in Pottsville, PA and holds a Master’s Degree in Real Estate.
Originally published in the South Schuylkill Press