Chester County, PA Real Estate: 2014 Year in Review

By Ryan Dosen

 

A fellow once said: “If history repeats itself, and the unexpected always happens, how incapable must Man be of learning from experience.” This week we thumb our noses at the words of George Bernard Shaw and examine what happened in the Chester County, Pa., real estate market in 2014 — and see if we can learn a few things that we can expect for the coming year.

 

Low Winter Inventory

Inventories bottom out this time of year, then climb during the spring, top out during the summer, and fall fairly steeply at the end of the year. Inventories were flat from December 2013 to February 2014, possibly due in part to the unusually harsh winter weather. Fewer transactions occurred during the winter months as people took refuge and we were stuck playing catch-up all year.

Despite the slow start, inventories in 2014 actually reached higher levels than were seen in 2013. It is also interesting to notice that despite the higher highs, home inventories have actually fallen below the lows of last winter.

Indeed, we are seeing a shortage of good homes for our buyer clients. Well-priced homes that are in good condition are not lasting long, despite the myth that people will wait until spring to buy a home.

We sold a West Chester listing last week in two days with multiple offers; the home was shown almost 10 times in the first 24 hours. Remember: There may be more buyers in the spring, but there are always buyers in the market.

 

Home Settlements Down Slightly

According to data provided by Trend MLS and the Suburban West Realtors Association, when compared with 2013, Chester County saw 2.4 percent fewer settled home transactions in 2014. The 2.4 percent slide really wasn’t that bad when you consider how the year started.

Suburban West’s numbers show that as of last June, the 2014 market trailed the 2013 market, in terms of year-to-date settlements, by 9 percent. Come September, the gap had been shaved to 4.5 percent. In short, despite finishing slightly behind the 2013 real estate market in terms of overall settlements, the 2014 real estate market had a relatively strong finish.

A closer look at the 2014 data interestingly shows an overall 7 percent decline in the settlements of homes priced under $400,000, but almost an 8 percent increase in the settlements of homes priced over $400,000. One might ask if the decline in sub-$400,000 settlements occurred because individuals in that price range had trouble qualifying for mortgages. Clearly, the government thinks that this was the case.

Last week, this column discussed the Federal Housing Administration’s mortgage insurance rate cuts, which will enable more people to qualify for more sub-$400,000 mortgages.

Interest rates are still quite low and there are more programs being rolled out to encourage people to buy homes. We do not expect this to be a “down” year for the real estate market; we expect more settlements in 2015 than we saw in 2014.

 

Be Smart and “BTO”

With inventories being so low, if you were considering listing in the spring, consider instead pulling what gamblers would call a “BTO” (or, “bet the opposite”). You know that history is going to repeat itself and that the market will be flooded with homes in the spring and summer. Yes, there will be more buyers, but there will be more competition among sellers as well. Consider taking the path less traveled, betting the opposite, and selling now while others are sitting on their hands unwittingly confirming Shaw’s sentiments.

 

— Ryan Dosen manages The Wayne Megill Real Estate Team of Keller Williams Brandywine Valley in West Chester. Contact Ryan Dosen for buyer or seller representation or for more perspective on the local and national real estate market by emailing rdosen@megillhomes.com or calling 610-399-0338. Please also visit The Wayne Megill Team blog at www.PAHomesAndRealEstate.com.

 

This article was published by 21st Century Media and the Daily Local News (West Chester, PA). To read this article on the the newspaper’s site, please visit the Daily Local News.

 

 

To view all of Ryan Dosen’s 21st Century Media real estate columns, visit http://www.dailylocal.com/search?text=dosen.