Tag Archive for: Real Estate Trends

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®

Homeowners are incentivized to sell, if they’re in a position to do so, as we set sights on the spring housing market. It’s no surprise that last year was a stellar year for homebuying and selling. Unfortunately, many were left on the sidelines, especially first-time buyers who only had FHA loan approval or were relying on a more limited down-payment as they pursued homeownership. Often investors beat first-timers to the punch, swooping in and snatching up available homes for sale. The challenges still exist. You need only ask those who are still looking to buy.

Persistent low supplies, even locally, have driven up home prices. Fueling the fire was 2021 with its record-breaking growth in the housing sector. Appreciation in home prices was high at the start of the year and accelerated even higher by year’s end. “Price appreciation averaged 15% for the full year of 2021,” which was more than double the prior year.

Sellers who can afford to sell, and we use that term “afford” loosely, should do so. If you’re a homeowner thinking about selling, is there a better time of the year to put your property on the market? Is there an optimal time to sell? Is there a month or a very specific time of the year where a seller would be in a better position than if he/she waited? These are great questions. New and sold listings in our market will shed some light on this discussion.

New Listings in the Greater Scranton Board of REALTORS®
2021 2019 2018
February 172 244 228
March 267 324 320
April 330 400 364
May 387 432 448
June 374 381 434
July 368 360 387
August 397 331 353
September 329 329 313

*GSBR statistics 2018-2021

Sold Listings in the Greater Scranton Board of REALTORS®
2021 2019 2018
February 157 159 138
March 243 180 187
April 248 203 168
May 262 250 258
June 312 240 214
July 294 270 240
August 313 265 285
September 298 228 225

*GSBR statistics 2018-2021

The COVID-filled year of 2020 was a tale of two markets, an extremely silent one as well as a vigorous one beginning in June of that year, and therefore, we skipped it for obvious reasons. But the patterns of three of the last four years show a trend. New listings entering the market peaked in May/June and sales hit their highs in July/August. And this correlation between sales and listings is logical with an estimated forty-five to sixty days to close for properties in our market.

It might be advantageous for prospective sellers to circle the month of March on their calendars. Next month you say? Yes, March is the perfect time to list! ATTOM data would also suggest March or perhaps even April is the best time to put your home on the market. May and June experience the highest returns for those looking to make a profit in selling their property. But don’t sweat it, if you’re not ready to go in March or April, you might be able to catch some of that buyer activity during the summer months.

We would caution anyone looking to sell though as home price appreciation may begin to taper as this year comes to a close. The median home price was almost 12% higher than it was a year ago and that should continue short-term, according to realtor.com’s chief economist. But many forecasters believe a plunge in home prices is coming by year’s end. Sellers who are on the fence, should act soon. In fact, next month might just be the perfect month!

What if we told you we were coming up on the sweet spot for buying and selling in real estate? Would you believe us? Real estate has a long tradition of being a seasonal market, especially in Northeastern Pennsylvania where we undergo four seasons. Alright, perhaps we only have three – late summer, long winter and rainy spring! Nevertheless, if and when spring sets in, motivated sellers have their sights set on unloading their home for top dollar. Over the past few years, there’s been a slight shift in the data in how consumers have responded. And of course, COVID-19 has severely affected traditional real estate trends in our Greater Scranton market.

The trends over the past nine months show some of those glaring differences:

Month Sold Listings Year-Over-Year % Active Listings Year-Over-Year %
October 388 68.7 665 -51.5
September 335 46.9 667 -50.8
August 361 36.2 692 -50.9
July 350 29.6 811 -41.5
June 141 -41.2 856 -36.3
May 107 -57.2 888 -30.6
April 156 -23.2 968 -19.0
March 167 -7.2 1046 -8.5
February 156 -1.9 1026 -11.6
January 173 16.1 1079 -8.9

* Greater Scranton Board of REALTORS® statistics

The sold listings from this past May, June, September and October clearly point to disruptions the pandemic has imposed on real estate in Northeastern Pennsylvania all while housing inventory continues to fall. Regardless, if we’re trending back to some sense of normalcy in real estate, Thanksgiving time might be the sweet spot for buying or selling real estate.

If you’re seriously considering purchasing a home, November and December certainly can make their case as to why you should make a move into their corner. Generally, autumn has been an excellent time to buy a property. In fact, according to real estate information company Attom Data Solutions, some of the best days to buy are November 9, December 4, 7, 26 and 29. Boxing Day, December 26, a monster shopping day on the calendar, is actually the single best day to purchase a home!

As we approach the heart of winter, buyers notice some of the lowest prices of the year. In fact, low mortgage rates continue to provide many with the opportunity to purchase, while having more buying power. Though experts believe the rates will stay low for the start of 2021, a change in leadership, bond prices and the state of the economy could certainly change that.

Believe it or not, November and December likewise present a good situation for some who are looking at selling. At the end of the year, buyers typically have less choice and homeowners seeking to sell may take advantage of these circumstances. The fact of the matter is this: There’s generally less competition for sellers, whereas there’s more motivation and perhaps the lure of year-end tax benefits for buyers. If buyers are seriously considering homeownership, this creates ideal conditions for sellers, who are typically competing with lower inventory by year’s end. Today, in the Greater Scranton area, our housing inventory is incredibly low! Furthermore in recent years, more homebuyers are less fixated on “summer buying” as well as school schedules (some don’t even have children) and if they have time constraints, their motivation can play right into the hands of sellers.

“Traditionally November has always been a really terrific month for sales because you’ve got people who have been out there looking saying, look, another year is about to pass. Let’s focus”

Depending on your specific situation right now, this time of the year might be the sweet spot for buyers and sellers alike. Yes, you’ll find highly motivated sellers in the market, but there won’t be a shortage of motivated buyers either. Given the right mix, it might be perfect timing to buy and sell!

 

If you’re a buyer or seller and have more questions, see our (buyer/seller) FAQs or contact us today.

 

Over a decade ago, the Great Recession was coming to an end. Mortgage lenders were beginning to tighten their requirements as they were sifting through the mess of an influx of foreclosures. Housing prices began to plummet. Millennials, anyone who was then ages 13 to 28, obviously didn’t have much of an impact on the housing market, many will still in school. Over the course of the past decade, home prices as well as the impact this generation has had on housing have steadily increased. The question remains though: What sort of effect have they had?

A recent article from Fortune written by Shawn Tully discusses the challenges millennials have encountered in recent years in a slightly volatile real estate market. Although housing experienced cheaper prices relative to the previous decade, millennials had little impact until two years ago. “[M]illennials had loads of college debt, and many had bad credit,” as the above mentioned cites. Until 2017, this generation became the “lost generation” when it came to home ownership. Last year, they made a big impression accounting for half of new homes sales. Now it appears with under-building in home construction, diminishing home affordability and rising rates on home loans, sales could be shifting back to more affluent buyers (Gen-Xers and baby boomers). We may once again witness a drop in homeownership rates for millennials.

This is concerning for the state of affairs in many markets throughout our nation: multiple locations such as California, Nevada, New York, Florida, just to name a few. The cost of housing has spiked so much in recent years that first-time homebuyers, many of which are millennials, don’t stand a chance. Yet, not all millennials are fighting this battle. In Northeastern Pennsylvania, the “lost generation” continues to be found in the first-time homebuyer market.

The Greater Scranton market presently carries with it an absorption rate of 6.34 year-to-date and 5.82 year-over-year (YOY) for December. Absorption rate is “the rate at which homes are selling in a specific area.” I bring this up, because this market is actually slipping into a seller’s market. Absorption rates between 6-9 (months of inventory) signal a balanced market, whereas rates between 3-6 indicate a normal seller’s market. Millennials are actually the catalyst. They’re buying up homes now.

Millennials, the largest generation in our country, lead the charge to homeownership and improved financial stability in Northeastern PA. As family formation increases in our area this year, we’ll see the effect this “lost generation” has on the growth of our local economy.