The month of November has come and gone, and with it, the cool, crisp air has turned a little frosty. But that change in temperature has not deterred the local real estate market from continuing to perform at a high level. Take a look at the numbers.
(NOTE: Click each slide for a larger image.)
The average sales price in Lancaster County ticked up 1% in November as compared to last year. This steady rise is good news for those people that saw the equity in their home get squeezed during the Great Recession of 2006-2010. It appears that the $200,000 is right around the corner.
Probably the biggest area for concern facing potential buyers in the market is the lack of inventory. There are 24% fewer homes on the market this year as compared to a year ago. The days of being overly selective and looking at 25+ homes prior to making a decision are over. In this market, if you don’t pursue a well-priced listing, it’s usually gone within a week.
The number of homes sold took a big jump from last year – 29% to be exact. Couple this with the average days on market dropping 12%, and you can see why many buyers today find themselves in multiple offer situations when trying to buy a home.
Yesterday, the Fed increased its key interest rate by .25% and many people are wondering what it means. Well . . . it’s kind of a two-edged sword. On the one hand, the Fed wouldn’t have increased rates unless they felt the economy was improving (a good thing). Conversely, the cost to borrow money (i.e. mortgage interest rates) will probably follow suit and gradually increase in the months ahead (a bad thing for home buyers).
The absorption rate is the rate at which available homes are sold in a specific real estate market or price range during a given time period. It is calculated by dividing the total number of available homes by the average number of sales per month. The rate represents the number of months it would take to clear out available inventory if no other homes come on the market.
At the present time, homes that are priced below $300,000 are selling rather quickly and we’re in a seller’s market with prices increasing. If you have a home priced between $300,000 and $500,000, you’re in a balanced marketplace where the number of available homes is meeting the demand of buyers. However, if you have a home priced above $500,000, you are facing an overabundance of inventory where buyers have a wide selection of homes to choose from. Sellers in this price range need to stand out from their competition by making sure their home is staged properly and priced aggressively.
Until next month – – – all the best!