State of the Market: Fall Edition

By Ryan Dosen

 

Fall is here. Welcome are the cooler temperatures and beautiful colors, as well as the typical flurry of real estate activity. People have returned from summer vacation, kids are back in school, and many will try to close transactions before year-end and the holidays. In general, the market seems to be following a similar path this year, at a noticeably faster pace.

 

Pending Home Sales Remain Up Year-Over-Year

The National Association of Realtors (NAR) reports that “pending home sales retreated in August but remained at a healthy level of activity and have now risen year-over-year for 12 consecutive months.” NAR’s Pending Home Sales Index is also up 6.1% year-over-year. Pending sales are an important indicator for the real estate market, as they represent the number of transactions that are under contract, but not yet closed. A measure of closed transactions would show us where the market is today. However, most are more concerned with where the market is headed. Pending transactions represent closings that will, for the most part, occur in the next couple of months—providing a decent indicator of the real estate market’s health in the near future.

Lawrence Yun, Chief Economist for NAR, says that “pending sales have leveled off since mid-summer, with buyers being bounded by rising prices and few available and affordable properties within their budget…. Even with existing-housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago.”

In Chester County, housing supply has dipped about 7 percent since May and is actually down slightly from August 2014’s numbers. Chester County’s pending home sales for the month of August were also up 8.9 percent this year.  Year-to-date numbers look even better this year, with pending home transactions in Chester County up 17 percent.

 

A Few Things to Keep an Eye On

Yun sees a real estate market that is able to at least maintain its current pace; however, he warns that there may be a few “looming speed bumps” that have the potential to cool the real estate market. Specifically, he warns that uncertainty related government shutdowns, instability in the equity markets, and the newly-in-effect TRID rules and procedures for closing home loans could all hinder further immediate growth in the real estate market.

 

Stretch Run

The buzz around the office at Keller Williams Real Estate – Brandywine Valley is that market activity has picked back up since the end of summer/Labor Day slowdown. This uptick in activity at the start of Fall is what we’ve come to expect in recent years, leading to fairly strong end-of-the-year numbers. There is cause for some concern about the market with all the uncertainty, both at home and abroad, but the numbers are not lying when they tell us that the market continues its recovery. We’re not expecting a booming fall real estate market, but we’re not expecting a bust market either. Look for the market to continue to outpace last years’ and to carry on its climb toward normalcy.

 

– Ryan Dosen manages The Wayne Megill Real Estate Team of Keller Williams – Brandywine Valley in West Chester, PA. Contact Ryan Dosen to inquire about buyer or seller representation or to learn more about a career in real estate by emailing ryan@waynemegillteam.com or calling 610-399-0338.

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.