Tag Archive for: housing inventory

There are many considerations a homebuyer should understand when purchasing a home in the spring. Here are five things you might want to consider before you dive in too deep in search for a home:

  • Save for a downpayment. This is something you should be doing well before you begin looking for a home. Having a sizable down payment can help you when shopping for a loan and lower your overall monthly payment as well. The process of saving can be challenging with bills and other monetary obligations in play, but the rewards can pay for themselves over the life of a loan. As a buyer, understand that there are different mortgage options available and with them come varying degrees of downpayments. Some buyers have a misunderstanding that they must come up with 10% to 20% of the purchase price, but that’s just not the case.
  • Get pre-approved for a mortgage. Doing this early on is crucial to understanding your budget and making competitive offers while home shopping. If a seller has more than one offer on the table, the pre-approved purchaser will usually be in a better position than the one whose offer wasn’t accompanied by a pre-approval. Furthermore, you won’t over-reach as a buyer. One of the most frustrating things we witness is interested parties not being able to afford homes they’re actively pursuing. With a pre-approval, a conservative range of values provide a clear roadmap for both you and your REALTOR® as you seek your dream home or investment property.
  • As homebuyers emerge from colder weather, especially a winter that’s served up some slick and treacherous conditions, they might look to areas that don’t need to endure the brunt of the season. Perhaps they choose a shorter commute to work in order to spend less time on the roads. Likewise, a garage may be an upgrade for someone who’s never had one and who’s had to deal with the challenges of leaving the house on cold or snowy winter mornings. Spring fever brings these thoughts into the minds of buyers as they set out to find their next home. Thus, it’s essential to determine the locations or neighborhoods you’re leaning toward. If you don’t have specific neighborhoods in mind, take into account factors like proximity to amenities, schools or work to help you narrow down your choices.
  • Understand the current market conditions, such as inventory levels and pricing trends. Should you buy now? Are you in a buyer’s or seller’s market? This will help you understand if a seller is willing to negotiate or if you have to be ready to immediately make an offer when you find something you love. Working with a knowledgeable real estate professional can ensure you’re up on these trends. Presently, in Northeastern Pennsylvania, we’re struggling with a deficient supply of homes. Since June 2020, we’ve fallen from a balanced market. Plummeted so much so that our present inventory of residential properties (an absorption rate of 1.95) more closely resembles the lifeless numbers we experienced in this market between February and April of 2022 (with an average absorption rate of 1.44) than anything looking like we’re emerging from this seller’s market.*
  • Some may consider this a shameless plug, but as any market begins to heat up and the temperature changes, it’s critical to have trusted professionals who will guide and support you on your quest toward homeownership. Home inspectors, appraisers, mortgage lenders or advisors, surveyors, real estate agents and the like all play significant roles in helping you attain your real estate goals. Take the time to interview real estate agents, if you don’t have one in mind. Have a series of questions ready that you might have entering this market. How can the agent you’re considering hiring address these concerns? Do they have the experience needed to help you overcome any challenges you might have standing in your way? Learn about their expertise and how long they’ve been in the industry. Also, ask them about current trends in the market. Make sure they’re a good fit for you and a good listener too!

Spring is a fantastic time to do some cleaning, a thorough one, not only of your residence, but also of the clutter which could be standing between you and purchasing a house or investment property. Tackling these five things can prepare you for success, in any market, as you journey toward homeownership.

 

* Greater Scranton Board of REALTOR® data

 

For more, check out our buyer FAQs.

Black-eyed Susans are in full bloom, raging across gardens and hillsides in Northeastern Pennsylvania. Chatter has begun about picking apples, not blueberries, from an orchard near you. Ritters, anyone? Sure, Dunkin Donuts is now showcasing its Blood Orange Refresher, claiming it’s their seasonal drink. Schools are reopening for the new academic year. Football has begun again! Did you catch yesterday’s Backyard Brawl thriller? The unofficial end to summer happens this Labor Day weekend. And yes, this morning was a little chilly, I must say, but I’m holding onto summer this year!

We lack the four seasons in our region, we really do. Spring, in recent years, is a mixture of winter slop and daffodils and crocuses refusing to make up their minds whether it’s time to sprout or not. Autumn seems hidden behind the winter breeze that kidnaps the summer heat. When summer finally gets into motion, department stores are cramming Halloween decor and Christmas lights into our shopping carts. Don’t get me wrong, fall is my favorite, absolute favorite season of the year. [I even purchased a case of Founders’ Oktoberfest a few days ago – shhhh!] I’m just not willing to surrender to autumn this year. I don’t care how many times you shout pumpkin spice!

Summer hasn’t made an exit yet. In fact, I had sand between my toes only days ago and a sunburn on my right arm.

Real estate may likewise side with my position. It appears, like me, it could be summer dreaming. Some of its optics exude traditional summer responses. More properties have gone under contract in August of this year as opposed to August of 2021 and the housing supply remains dismal, 1.65 months supply, last time I checked. Keep in mind, a balanced market with normal inventory levels produces a month’s supply between five and seven. Nevertheless, as much as I hate to admit it, our market’s leaves are changing color. Sold listings through last month, year-to-date, are down 6.4%. New listings, likewise, are down month-over-month, when compared to last August, by over 23%. Perhaps this market has had enough of the surge it experienced over the previous twenty-six months (give or take).

Could it be that homebuyers, much like blueberry-pickers of July and August, have had their fill? They’ve looked at the entire inventory (which hasn’t been much), they’re fatigued by record-setting inflation and mortgage rates that don’t look as appealing as they did this past January. Although there’s certainly an element of truth to these pressures, the strain has been on buyers for some time now, our market remains rather healthy. When will inventory increase and the market become more balanced? That’s really anyone’s guess at this point – industry experts have yet to nail that down. In spite of that, year-to-date, there’s been a 19.9% increase in homes sold this year opposed to only five years ago in 2017.

We’re looking forward to a change in season in real estate, after all buyers need reprieve too! But summer wants to stick around this year (it told me so). We hope you can enjoy the few remaining weeks of the season.

* statistics from the Greater Scranton Board of REALTORS® (August 2017 – August 2022)

 

Whatever season you find yourself in, make sure to use our “search by city” feature and discover all our area has to offer.

Considering selling? What can today’s homeowner be thinking? There are a mix of variables in today’s market, which add an element of mystery to forecasting, similar to a meteorologist’s predictions you might say. But the storm of buyers, at least in our region, remains. They cover the area, a dense fog destined to stick around until there’s a sudden boost in inventory and/or perhaps a series of half-percentage-point rate increases from the Fed. The concerns are real. On the other hand, the hope for a surge in listings to our market might be in the cards, but those are based upon a survey’s findings, they’re only another tool for speculation. Nonetheless, it’s a valid approach to entering the minds of home sellers.

Nowadays, the mind of a seller is certainly a mess, one could argue so too a buyer’s. It’s a seller’s market though, no? While that’s true, there’s an anxiety for many prospective sellers in prepping or listing their home for sale. Some also need to buy after they sell, a cause for hesitation and some Pepcid AC. “Sellers in the northeastern part of Pennsylvania, believe it or not, are still a little apprehensive about our market,” underscores Christina M. Keller, REALTOR® with Realty Network Group. “While inventory is low, very low in fact, making life much easier for my clients, who are thinking of putting their home on the market; some feel rushed attempting to get all their ducks in a row.”

Despite the jitters for some sellers, most are in a great position to move forward and with frugality. “Sellers are opting to save their money by not doing some of the basic upgrades we normally would see them do only a couple years ago,” indicates Mrs. Keller. “They don’t sense the need to replace worn flooring, repaint interior rooms or update their kitchens and baths. My sellers are smart and they understand this is the furthest thing we’ve had to a buyer’s market in quite some time. Armed with the knowledge there are fewer homes for buyers to choose from, they’re counting their savings and are letting the new owners do the work themselves post settlement. It’s been my experience that many home shoppers in the Greater Scranton area have come to expect this and are willing to take on the challenge to make their own updates. Unless of course, there are structural defects in the home, then they need to address and resolve said issues before getting to the closing table.”

“I don’t see buyers asking for the simple repairs to be done nearly as much as I experienced in the past. Buyers are simply happy to be chosen as so often there are multiple offers on the table for a single listing. Buyers who are willing to accept the property ‘as is’ are often the deciding factor and make the difference between the sellers accepting their offer or moving on to another. This can happen even when another offer comes in higher than the winning bid. Good news for sellers, not so much for buyers. The end result of this is we simply can’t negotiate a price reduction as easily as we did in the past.”

If you’re a seller who’s looking for a slight edge, listing your home mid or during the latter part of April might be the ticket.  According to realtor.com, April 10-16th is the best time to list.  “Sellers…can expect to find relatively high buyer interest, coupled with limited competition from other sellers, that equates to fast-selling homes at top dollar,” says Danielle Hale, the chief economist for realtor.com. Likewise, in looking back at 2021 home sales, Zillow has determined the end of April (21st through 28th) is “the most opportune time” to list.

It appears the next few weeks could be the sweet spot for sellers in 2022!

There’s more uncertainty in the national real estate market than we’ve seen in some time. We’re two years beyond the onset of COVID and while we’re past many of the main health concerns of the virus, obstacles still remain. Remote work is likely here to stay, thus there are adjustments to housing post pandemic, which continue to unfold and impact the market. Is time running out for sellers to take advantage? Will buyers have a better chance of acquiring real estate being that their purchasing power has somewhat diminished? What’s in store for our market in the Greater Scranton area?

The future of real estate isn’t as dark as some would have you believe. The chance of a housing crash, the likes of 2007-2010, lacks much supporting evidence. In fact, the exact opposite might be true. Many experts are calling for a busy spring market this year and even Zillow projects home appreciation to hover around 9% for 2022. Many of the conditions, which existed prior to the housing bubble, simply aren’t present. When the market began to tank fifteen years ago, there was a surplus in housing inventory, mortgage lending resembled the Wild West and foreclosures occupied their fair share of the market.

Today, the narrative is quite different. There are shortages in markets throughout the country. Here in Northeastern Pennsylvania, our month’s supply of homes continues to unimpress buyers: year-to-date we sit at 1.29.* A magnifying glass would be required if the inventory got any smaller. In the four years, which consisted of the housing bubble, the market was heavily in favor of buyers and saw surpluses of housing between 7.3 and 9.6 month’s supply, according to the National Association of REALTORS®. Furthermore, lending restrictions are much tighter than those that existed fifteen years ago. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act became law with its eye toward consumer protection and a reform of the lending industry, especially riddance of predatory lenders. In general, those who are approved for a mortgage in 2022 are much more qualified than those approved even a dozen years ago. Finally, negative equity in the national housing industry has reached its lowest level over this same period of time. Much fewer homeowners are underwater than were during the housing bubble.

The future of housing post pandemic is not scary. Actually, 2023 will probably resemble 2019 more than it will last year. Inventory will bounce back, but that might take a year or two. The immediate future for sellers does pose a threat to them receiving top dollar for their investment. “There’s a little insanity in our market right now,” maintains Amy L. Kiesinger Bohenek, an Associate Broker with Realty Network Group. “Listing agents are faced with multiple showings and offers, sometimes over asking price. The appraisal process can be cause for a headache from time-to-time too. When a home doesn’t appraise, where does that leave both parties, especially the seller?” Despite this, the window for bidding wars and high price appreciation is closing. Despite climbing mortgage rates, demand for housing remains strong. Price appreciation will continue to trend up, albeit home prices shouldn’t be in the neighborhood of 18%, like much of last year. Sellers in our region should act sooner than later if they want to take advantage of this market they find themselves firmly entrenched.

Buyers must hang in there if they have a desire to pursue real estate anytime soon. The question remains, how can you sit tight when your purchasing power appears to be vanishing? Homebuyers have seen the average thirty-year fixed mortgage rate increase to roughly 5.3%, which is about 2% higher than it was at the beginning of the year. Many first-time buyers are already struggling to get their foot in the door and compete with others, including investors. Higher rates, for those who require a mortgage, generally mean they’ll have less to contribute toward a monthly payment. That’s why it’s important for buyers to have a plan, stick to a budget and know what they can afford.

In addition to the factors listed above, real estate in Northeastern Pennsylvania continues to have affordability as its ally. Year-to-date, the median home sales price is $179,000 (up 7.7% from the previous year).* New listings are down slightly, but inventory is expected to pick up. The groundwork for homes to appreciate at a slightly slower pace with small improvements in inventory is being laid. With an increase in buyer and seller competition that’s sure to come this spring and summer, being too conservative, will surely impact homeowners thinking about selling.

 

* Greater Scranton Board of REALTORS®

It’s hard to imagine the real estate terrain we find ourselves in these days, but yet here we are. Many parts of the Northeast, who prior to the pandemic were struggling, are now reporting record signs of growth – the largest increase in home sales since the end of 2006. Unlike much of the Northeast portion of our country prior to COVID-19, Northeastern Pennsylvania’s market was thriving. When the economy became derailed in March, real estate entered stealth-mode for over two months. Since then the terrain has been very smooth, churning at a fast pace. Home sales and home prices have been on the rise. Though homes are selling for 11.6% more this August versus one year ago, home prices year-to-date are enjoying a more comfortable 2.2% increase (year-over-year).*

Sure, the challenges are present for our market: our inventory is very low, more homes are going under contract than are being listed and commercial space is beginning to saturate our market; but the Greater Scranton area appears to be insulated from the other surrounding regions. Lower-priced homes have been in short supply this year, especially in recent months. Hopefully new construction kicks it into gear, but the higher costs of lumber since mid-April hasn’t helped the situation. Some homeowners have decided to stay put, which hasn’t boosted the housing inventory either. Nevertheless, our area remains very affordable and for many first-time buyers, they eventually find what they’re looking for.

Demand remains strong and thus it can be frustrating for some homebuyers, especially in our current seller’s market. It’s particularly stressful if you’re searching in print these days! Some of the properties we market in print are no longer active when they appear in black-and-white in the publication. Honestly, properties are moving fast these days. May we make a suggestion? If you’re actively searching for a home in today’s market, look online without hesitation. We would also strongly suggest having your agent keep you up to speed with the latest listings that fit your criteria and the trends affecting the neighborhood(s) where you’re searching.

Where you search online can make a difference too. Recently, we were awarded Best Real Estate Website in Northeastern Pennsylvania for the third year in a row by local newspaper readership. Our award-winning website, realtynetwork.net, features the entire inventory of homes on the market through our comprehensive database. Our site has a simple interface with straightforward navigation and high mobile-performance, so you can easily connect with us from wherever you are. There are many tools available for visitors to explore as well. Venture to our award-winning website today and let us know what you think.

 

* Greater Scranton Board of REALTORS® stats