Signs of Spring in the Suburban Philadelphia Delaware County Luxury Market? - Not quite yet.
After suffering the financial jolt that really took hold in October last year, it was expected that we would begin to see some clarity as the new administration arrived with fresh faces and new ideas. Despite having since November to prepare, this clearly has not happened. This has resulted in a falling financial market, a continued decline in consumer confidence, and no real apparent progress. Until Washington shows more leadership, the luxury real estate market in particular will probably remain in the doldrums.
The Numbers: In 2008, there were a total of 93 luxury homes sold that settled for $1,000,000 or above in Delaware County Pennsylvania for an average price of $1,585,000. Only 12 of these home sales occurred in the last quarter of 2008 after the financial markets began to deteriorate. Since the beginning of 2009, although we expected to see an uptick in activity, we have only had 4 additional home sale settlements.
As for Pending properties, there are currently 16 homes under contract with an average list price of $1,559,000. Of these, ten were under contract prior to October 1 and all ten are new construction homes scheduled to close at various points into 2010. Of the remaining six homes, four received contracts in 2009. In a key shift away from new construction, five of these 6 properties were existing homes. Based on the 4 settlements above and 5 additional properties scheduled to close before the end of March, we are looking at 9 total sales in the first quarter 2009 vs 18 sales in the first quarter of 2008 - down 50%
Today there remain 156 homes currently listed on the market with an average price of $1,756,000. These homes have an average of 199 days on the market, up slightly from 195 in the December update. Based on the current sales pattern, we have well over a years' worth of inventory on the market.
The Bottom Line: As I mentioned in my last luxury update, we are well below a "normal" sales rate, and as a result there must be rising pent up demand. The problem remains, however, that with the current financial uncertainties overhanging the market, there is no real catalyst to encourage people to make a move now. Without some clear direction, people will tend to hold off on making major decisions. With the large existing inventory, this could lead to additional price deterioration in the near-mid term, but this could also change quickly depending on the moves coming out of Washington. At this time the market remains basically in a holding pattern.
(All information is from the TrendMLS System and is believed accurate but not guaranteed)