Here are the numbers from my August 7, 2009 searches in the Lancaster County MLS:
Active Listings UA Listings Ratio Prior year Ratio
Aug 7, 2009 2,805 791 28.20% 25.04%
Jul 7, 2009 2,761 796 28.83% 29.17%
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%
Once again, it's clear that the market in the Lancaster area is strengthening in 2009 compared to 2008. Looking at the trend last year for May, June, July, and August, the ratio was declining, and this year it is consistently in the area of 28% for those four months. In this last four months we did not see an increase, but neither did we see a 10% range decline like last year over the same time frame.
Looking at the various price ranges on August 7, 2009 we see the following:
Price Range Active Listings Under Agr. Ratio Ratio 5 yrs ago C/5yrago
Up to $50,000 71 30 42.25% 76.12% 55.5%
$50,001 to $100,000 202 68 33.66% 98.44% 34.2%
$100,001 to $150,000 353 181 51.27% 196.77% 26.1%
$150,001 to $200,000 602 230 38.21% 157.02% 24.3%
$200,001 to $250,000 470 128 27.23% 89.95% 30.3%
$250,001 to $300,000 422 64 15.17% 66.67% 22.8%
$300,001 to $400,000 359 65 18.11% 42.76% 42.4%
$400,001 to $500,000 124 15 12.10% 31.67% 38.2%
$500,001 and higher 202 10 4.95% 28.75% 17.2%
Totals: 2,805 791 28.20% 103.22% 27.3%
Analyzing this shows that change in demand has had the hardest impact on the $500,001 and higher price range. The current ratio is only 17% of the ratio five years ago, whereas Up to $50,000 and $300,001 to $400,000 price ranges kept their ratio's much higher proportionally than the others. Considering that most houses sold fit into the $100,001 to $250,000 price ranges, these changes have had a significant impact on a lot of people.
Clearly the $100,001 to $150,000 range is the one most in demand. As price range increases there is generally a decline in the UA/A ratio. It appears that properties in the $500,001 and higher range are seeing the least activity.
The Lancaster County Association of Realtors publication, House Calls, reports in the August 2009 issue that settled units, where the home has transferred ownership, was down 14% in June 2009 over June 2008. Pending home sales for June 2009 have increased over 2008 by 3%. They also reported that in June 2009, the $100,000 to $200,000 market was up 30 percent over June 2008 in pending home sales. This may be the beginning of a positive trend. Last week an article in the Wall Street Journal reported that new construction activity is beginning to increase again.
Recently someone stopped when I was at our Prudential Kiosk at Park City, and mentioned that their house went down in value here in Manheim Township. They had heard from someone that house values were down 30% and they assumed their house had declined also. After a brief discussion, they were pleased to understand that they likely had not experienced a significant reduction in value. Lancaster County Pennsylvania is an area that was recently listed in the top ten areas for real estate market strength. I believe it is because we have a diverse economy, with a good variety of sectors in service and manufacturing. We are not dependant on any one sector like Detroit is on the automobile, and Florida is on tourism.
HVCC. "Havoc" is how it's referred to, but HVCC stands for Housing Valuation Code of Conduct. Recently regulations have become effective that relate to the mortgage loan and appraisal processes. HVCC relates to the appraisal process, and other regulations address Truth-in-Lending issues and underwriting issues. The time it takes to process and approve mortgage loans has increased recently, and any changes that buyers/borrowers want to make after getting approval will delay the process. Buyers need to have a higher credit score now to purchase a home than they would have needed three years ago. At a time when the unemployment rate is increasing, although at a slowing rate of increase, it is more challenging to get approval since buyers may have been downsized in a number of ways. Even if a buyer hasn't been downsized, if they are concerned about their job stability, they are likely to not pursue purchasing a home until they are more comfortable that they are secure.
Time is running out on 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. To take advantage of this, you need to purchase (and settle on) a house prior to the end of November 2009. That means buyers need to be under agreement on a property before mid-October.
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
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