Here are the numbers from my June 5, 2009 searches in the Lancaster County MLS:
Active Listings UA Listings Ratio Prior year Ratio
Jun 5, 2009 2,844 814 28.62% 33.26%
May 7, 2009 2,845 801 28.15% 34.95%
Apr 4, 2009 2,861 642 22.44% 32.03%
Mar 7, 2009 2,812 545 19.38% 31.00%
Feb 4, 2009 2,730 447 16.37% 24.62%
Jan 3, 2009 2,660 427 16.05% 21.29%
These numbers are like a "snapshot" of the market at a point in time. Other numbers that are reported are based on activity over a period of time, possibly one month, one quarter, or one year. I like these numbers because they seem to be a "leading indicator" of activity that will be reported on after the period of time has ended.
In reviewing market numbers, we could also consider Months of Supply. For example, if there are 2,800 properties on the market, and in the last month there were 800 that went Under Agreement, then the calculation is 2,800 divided by 800, equaling 3.5, which represents about 3.5 months of supply of homes at that pace of sales. In the period of time from March 15, 2009 to April 15, 2009 there were 1011 homes that went under agreement. Considering that there were 2,861 active listings on April 4, 2009, that represents 2.83 Months of Supply at that time. Looking back to the 2004, from March 15, 2004 to April 15, 2004 there were 1,264 homes that went Under Agreement. On April 6, 2004 there were 1,390 active listings, representing a Months Supply of 1.10. That illustrates that we currently have more than double the Months Supply that existed in 2004, at the peak of the market. That gives some possible suggestion of how long a home may be on the market. Some homes will sell sooner, others take longer. Home preparation and pricing impact that significantly.
However, to put that in the perspective of the national housing market, for example in Las Vegas at one point, there were approximately ten times as many homes for sale per person as we have here in the Lancaster PA market. Here in Lancaster we have been shielded, (But not completely isolated) from the harsher effects of the national housing market.
The Lancaster County Association of Realtors publication, House Calls, reports in the June 2009 issue that settled units, where the home has transferred ownership, amounted to 409 in April 2008, and was down 16.9% to 340 in April 2009. They also report that the five-year average of homes sold in April is 449. In April 2005 we saw 532 homes sold.
Has the housing market reached its low? Will it improve in 2009? I don't know. We are in a time of uncertainty, fear, liquidation, and volatility. People who take careful, calculated and well understood risks at times like this tend to be well rewarded for that later.
Have you heard about the $8,000 First Time Home Buyer Tax Credit? People thinking of buying their first home really should be aware of this and carefully consider the impact of not acting to take advantage of this.
•1. It is a tax credit of $8,000 that reduces your taxes, possibly giving you cash.
•2. With interest rates as they are now, the cost to borrow money is not likely to get less in the future.
•3. With the 2.83 Months of Supply of inventory, buyers have more homes to select from.
•4. With the 2.83 Months of Supply, sellers are not able to demand the prices they may have a couple years ago.
•5. With the 2.83 Months of Supply, buyers are less often in situations where offers are competing with others.
Interest Rates:
Wow! Currently I am aware of mortgage rates ranging from 5% to 6% depending on the number of points a borrower pays. Those are low rates when you consider the range of rates over the last decade. What is also unusual is that mortgage rates fluctuate every day, and sometimes multiple times in one day. Someone checking rates with different lenders will have to be on the phone with each of them a couple times every day if they want to try to get the best rate. However that will only work if they have a property under agreement, have applied for the loan at all the different places, and haven't locked in already somewhere. Lenders are getting more savvy about borrowers playing the field like that, and are less and less forgiving about locking in and then if rates go down adjusting the rate.
Also, I hear that the Federal Government is borrowing money to fund the Stimulus Package, pushing interest rates up. It's a sad but true reality that the desired effect of the stimulus package can be a bit minimized by the action of stimulating. Current homebuyers are likely to benefit from the stimulus package as home values increase in the next couple years as the economy recovers. Call me if you would like to participate in that.
Thank You!
Prepared by: J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®
Prudential Homesale Services Group
150 North Point Boulevard, Lancaster, PA 17601
717-560-9100 www.msollenberger.com msollenberger@topproducer.com
Licensed in PA
Comments(0)