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West of Philadelphia Market update: Prices drop in last two months

By
Real Estate Agent with Realty ONE Group Advocates 484-237-2055 PA License - AB067198

Until recently Pennsylvania was doing alright overall in regard to house prices and the Philadelphia area was not suffering along with the rest of the country with sliding prices. Yes, prices had leveled, listings were taking longer to sell and there were less buyers willing to make a decision, but overall this was an adjustment the market needed, to cool off after a very active period, with buyers being pulled into the market early by offers of easy financing.

These buyers have now suffered, and there is a gap in the market as later buyers are not ready to buy due to the new financing requirements of many lenders that buyers need increased deposits to put down on their homes.

What this has done in the last one to two months has been to slow the market down locally even more and put pressure on sellers to reduce prices. We have seen this over a longer period in markets with very high inventories, such as Lower Merion where price cutting has been going on significantly over the whole summer. But only in the last two months with the financial crisis deepening has it really reached across the board to most neighborhoods. We are seeing sales off about 33% and prices dropping by 15-20% or more in different townships.

Buyers are reluctant to make offers, waiting for price reductions rather than making an offer. Those houses that are selling are the ones that require little or no work and have been well maintained. New construction sites are offering large incentives to buyers who are qualified and able to move ahead.

So if you are ready to buy and have financing lined up, check it and make an offer. Why check your financing? Because lenders are changing the rules all the time, if you were qualified a month ago or even two weeks ago, you may not qualify right now. I had a buyer of a listing of mine be rejected by the mortgage broker after being given a pre-approval letter the day before. So keep checking with your mortgage company and reach out to others to make sure you have options, there is financing available with good credit and if you have some money to put down, with FHA loans it can be as little as 3% this year, in January that will increase to 3.5%.

Posted by

 

Nick Vandekar
Nick is a Tredyffrin Easttown Residential and Commercial REALTOR selling The Main Line, Chester, Delaware and Montgomery Counties.

Giving you the confidence to make
the right decisions.

225 W Uwchlan Ave
Downingtown , PA 19335
Office 484-237-2055
SellingTheMainLine.com
Mobile: (610) 203-4543 [call or text me]
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Tredyffrin Easttown or along the Main Line, 
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Comments (2)

Michelle Chamberlain
Above All Financial Services -Pennsylvania Mortgage Broker - Secane, PA
Suburban Philadelphia Mortgage Broker

Nick and Trudy,

Good advice on warning potential buyers about checking with their lender to make sure they still qualify, this is especially true if the buyer is doing any type of special financing options .

Michelle

Nov 18, 2008 02:55 PM
Nick Vandekar, 610-203-4543
Realty ONE Group Advocates 484-237-2055 - Downingtown, PA
Selling the Main Line & Chester County

Michelle, thanks for the comment. We attended a seminar on FHA financing yesterday and the lender Prosperity Mortgage, associated with Long and Foster and working with Wells Fargo said they have seen their FHA loans go from about 6% of their business to about 46%.

Nov 19, 2008 03:10 AM