What is the real estate market really like today?

First and foremost real estate, above all is LOCAL. Secondly, right now real estate is transitioning. We are in a huge slow down, you and I both know when you are driving the speed limit and everyone else around you is flying by, you have a tendency to try and keep up - the real estate market of a few years ago. But when everyone immediately slows down -the real estate market now- there is potential for an accident if you are not careful. Well ladies and gentleman, there's been a little 35 car pile-up and it's going to take some time to clean up the mess. We need to tend to the wounded, reroute the traffic, clean up the pieces and get back on track.  

That's where we are right now. The real reason this market is so tough is that we are transitioning. Whether you've changed jobs, careers, homes, relationships, or your route to avoid the traffic, there is a time of transition necessary to work out the kinks, get your bearings and feel comfortable enough where you can honestly say that things are going to be ok. Is it going to get worst? I would say based on the stats that we are going to be in the same type of market for another 6 months to a year, slow and steady with not a huge change.

Homes will continue to sell year after year no matter what; it's just a matter of how many and for how much. If you are in the normal residential market, patience is a virtue whether you are buying or selling. The right house is out there at the right price. The beneficiaries of this market are definitely the investors, especially the ones with capital, collateral, relationships and vision. The investors of today are mostly buy and hold, long term investors who are using real estate as their annuities, slowly growing equity in a long term financial plan. It is not a mad rush to flip homes like the get rich quick weekenders of a few years ago. Although flipping is starting to creep back into the marketplace as we are analyzing the deals closely with the investor and making sure that the deal makes sense. Profits are not what they once were, but, you can be sure there are profits to be made. Expectations have to be reasonable and conservative though as the home run deals are the exception these days. And the most unstable of all areas will be the commercial market place, but we will leave that for another post.    

So what do the numbers look like? Based on data from Trend Multiple Listing Service sales activity between 2005 and 2008...

• The number of homes sold in Delaware County has decreased 58% with 7640 homes sold in 2005 and 4818 homes sold in 2008.
• This year-to-date 4714 units sold as of the end of November, so it is likely that 2009 will be the first year since 2004 where home sales will have risen over the previous year in Delaware County.
• The median home price in 2005 was $189.9K and overall has risen about 10% to the average median price of $210K in 2008, with an anticipated 5.5% decline in median sale price in 2009 to around $200K which ultimately brings us to about a 5% increase in home value overall since 2005 in Delaware County.
• The days on market has obviously risen significantly going from 19 in 2005 to currently 56 in 2009 which is almost a 300% increase in expected marketing time. 

All these numbers don't paint such a gloomy real estate picture in Delaware County after all, especially since this year seems to have an increase in the unit sales. 

In neighboring Chester County the numbers are a bit similar...

• A 61% decrease in homes sold between 2005 (7552 units) and 2008 (4495 units). 2009 is on point to have sales a bit higher than last year topping 4700 units. 
• The average median price rose 11% between 2005 and 2008 but has suffered an anticipated 10% decrease in 2009 to a median price of 280K which is a 2% increase over the 2005 average median sale price.

Is it phenomenal growth, no! But it is growth!

So what do I think about the state of the real estate market, slow and I don't see things getting back to "normal" for another 6 months to a year, minimum. It's been a rough road thus far and I'm not taking this market lightly, but you have to go with the flow. We opened Grand Real Estate Services in September 2008, right in the middle of this mess and we are still here! I say this, navigate slowly and make decisions based on what you feel is best for you, your business, your family and your future and if you need help figuring it out don't hesitate to drop me a message or pick up the phone and give me a call. We'll talk about what works best for you!

All the best!