What A Strange But Exciting Year In Real Estate

Dated: 07/20/2018

Views: 53

2018 sure has been an interesting year so far for real estate in our area.  The spring market saw low inventory an very high buyer demand, it was not uncommon to show a new listing to a client and have to wait in line as other real estate agents took their clients through the home.  Multiple offers from buyers within one to two days of a home being listed for sale was very common and it led to a lot of this from frustrated buyers!

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Things have calmed down a bit recently but inventory remains very low.  In Cumberland County, homes for sale (listings) went from 1849 units in June 2017 to only 1015 active listings in June of 2018, a huge decrease in inventory of 45%. We can’t sell what we don’t have! In Dauphin County, from last year in June to this year in June, active listings went from 2626 homes for sale to 1692 a decrease of over 35%.  This means although buyer demand has declined a bit it is still a seller's market and homes are still getting very good prices, favorable terms for sellers and shorter days on the market.

What does the future hold for real estate in our area? If I had an easy answer for that I would be a very rich man!! However, unless the inventory of homes increases in our area home values will continue to increase, although not at the pace we have seen during the first two quarters of this year.  It is expected that the FED will continue to increase interest rates and with all the trade and tariff uncertainty will have an effect on costs to buyers of new and resale homes.

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If you are thinking of buying a home now is still a very good time to do so.  As interest rates go up so does the cost of a mortgage.  Although interest rates are at the highest level since 2014 they are still historically low.   To put the cost of higher interest rates in perspective a buyer who is able to afford a payment of $1400 a month mortgage, not including taxes, insurance and mortgage insurance,  would be able to buy a $300,000 home with a 4% interest rate.  If the rate changed to 5% they would only be able to afford a home valued at $267,000.  As we are expecting rates to continue to be raised this would be the best time to get the most house for your money until rates level off.  The FED is expected to continue to raise the rates until at least 2020 if the economy continues on its current trajectory.  Long story short now is the time to buy!

If you are thinking of selling your home it is also a great time, as you will see lower competition from other sellers.  We have seen a decline in Baby Boomers selling their homes because they feel comfortable in their homes and see no reason to move.  Another interesting trend is that Boomers are staying in their homes as they have space for all their stuff and their children are not as keen on taking family possessions into their homes.  The trend of inheriting family items and downsizing has seemed to become less popular.  This has limited the inventory of homes that are not considered starter homes.  This means that homeowners who are moving up from their first homes are having a harder time finding homes that fit with their changing needs, so they are holding onto their starter homes until the can find the right home to motivate them to move.  So if you are thinking of listing your home you may see buyers fighting to be the next owner of your house.

If you would like to chat about either buying a home or selling your house.  We can have a relaxed chat about your plans and what the correct timeframe would be to make a move.  If you ever have any questions we are here to advise and help you.

The Deardorff-Lipari Group: Building relationships through real estate.




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