Suburban Philadelphia Real Estate News

As we saw in Delaware County PA, New Castle County is also continuing to see a leisurely sales pace as we head into summer.

In New Castle County DE, Luxury Home sales activity for those homes listed above $1,000,000 hit their peak in 2005 with 45 sales at an average price of $1,704,000.  Since then, as we have seen in many of the local areas, sales have been declining to 42 sales in 2006, 39 in 2007, and 28 in 2008.  Year-to-date in 2009, there have been eight settled home purchases with another 4 properties currently under contract.

As could be expected, pricing has been a bit more erratic with average pricing reaching $1,704,000 in 2005, dropping to $1,579,000 in 2006, rising to $1,703,000 in 2007, and dropping again to $1,409,000 in 2008.  Pricing in this range is greatly impacted by the highest priced sales for any given year.  The high price also peaked in 2005 at $4,075,000 with the highest price being $2,548,000 in 2006, $3,926,000 in 2007, and $3,145,000 in 2008.

Today, there are an additional 56 homes currently on the market with an average list price of $1,809,000 and a top list price of $4,500,000.   There are also an additional 4 homes under contract at an average list price of $1,395,000 so it appears that in addition to the sales volume possibly coming in below 2008, the average prices could ease a bit further as well.  As we have noted before, the homes in this price range remain centered in the Greenville/Rt 52 corridor with scattered listings toward Newark and south of 95.

Bottom Line: Clearly with only 12 properties either sold or under contract in almost the first 6 months of the year and an additional 56 homes on the market at this time, this remains a challenging segment of the market with rising average days on the market.  Buyers have the apparent edge and sellers must continue to watch the recently sold homes very carefully to be sure that they have not inadvertently priced themselves out of the market.  As we continue forward and have a better feel for the overall economy, this segment should begin to respond as confidence builds and financing continues to become more readily available.

As always, if you are thinking of a move or have any questions, please do not hesitate to contact me anytime.

(All statistics per the TrendMLS System and believed accurate but not guaranteed)

Yesterday, I had the opportunity to attend a great meeting with Michael Davis Esq of Davis Law in Wilmington DE concerning Navigating Short Sales**.

With the current market conditions, we are continuing to see an increase in the number of short sales on the market.  If you are in that position or are considering buying or selling a property that may be a short sale, he noted several important points to consider:

  -This is a long process - often 90+ days.  The banks will not be rushed or pressured but will follow their programs at their pace. 
  -Buyers must have the ability to wait for an undefined time period to obtain approval and settle.
  -Sellers must be willing and motivated to supply all required information on a timely basis - this will often include information above and beyond that required to obtain the original loan. 
  -Sellers should consider paying up front for a title search and obtain independent representation from the beginning to aid throughout the transaction.
  -If the property is a qualified principal residence, there is a good probability that debt could be forgiven under the Mortgage Forgiveness Debt Relief Act of 2007 but this is not always the case.
  -If the property is investor owned, the 2007 law does not apply and your CPA should be contacted to assess your current position before you decide on a sale.
  -The seller and the IRS will receive a 1099 from the sale regardless.
  -The buyer and seller have a valid agreement of sale and the short sale is "just another contingency".

Short sales are a tremendous opportunity to allow owners to move while creating less damage to their credit  than is possible under a foreclosure.  Buyers can also benefit by obtaining a new property at a savings over the full appraised value.  Every transaction is unique, but it is key that all parties have the appropriate expectations regarding timing, requirements, and procedure from the outset of the transaction.

To be sure that you understand and take full benefit of all the options available, I would encourage you to speak with a specialist like Davis Law from the beginning to be sure to avoid potential problems and not to miss any opportunities.

As always, if you have any questions or need any additional information, please do not hesitate to contact me anytime.

(**Note that a "short sale" is the sale of real property by the record Owner to the Buyer for a dollar amount that is less than the total dollar amount owed by the Owner to the Owner's secured creditors.  The creditors are not parties to the sale but do possess the Veto power over the sale and the power to renegotiate all terms.)

The last post on pricing, sales activity, and overall trends in Delaware County, PA raised the question of whether we were seeing the same trends region wide.  

Short answer: Yes.

In New Castle County, Delaware, there were $74 Million dollars worth of properties sold in November consisting of 302 properties with an average price of $245,000 per the TrendMLS system market statistics.   Compared to earlier sales:

   Nov sales were down 38% from the 2008 avg sales thru Oct
   Nov sales were down 51% from the 2007 average sales/month
   Nov sales were down 69% from peak sales rate in June 2006

We saw close to the same sales rate($76 Million) in January 2008.  Prior to this, you would need to go back to Feb 2002 to see a lower sales volume. 

On a more local level, if you look at the Hockessin/Centreville/Greenville area, there are currently160 homes on the market with an average monthly sales rate of 18 units (dropped to 14 in November).  At this monthly rate, it will take over 8 months to sell out of the current inventory - assuming we recover toward the monthly average sales rate.

In Chester County, PA, total sales were $101 Million consisting of 295 units with an average price of $344,000.  Compared to earlier sales:

   Nov sales were down 34% from the 2008 average thru Oct
   Nov sales were down 45% from the 2007 average
   Nov sales were down 69% from the June 2005 peak.

Echoing New Castle County, sales were actually lower in January of this year at $95 Million.  Prior to January, we last saw this sales volume in February 2001.

Bottom line: We do seem to be seeing the same trends throughout the region. 

Again, once financing issues resolve themselves and people can have some confidence on the future rates and programs, we could see a rapid build up in activity as the market responds to pent up demand.  Both the time to resolve the financing issues and the increase/decrease in inventory on the market will dictate the direction of prices once sales pick up, but at this point pricing seems to be holding up reasonably well.

As I mentioned earlier, if you are thinking of buying or selling in the near term, now is the time to get ready.  I would expect the new administration to act fairly quickly once in office and you should be prepared to take advantage of any new opportunities as they appear.

As always, if you need any additional information or have any comments, please feel free to contact me anytime.

(All statistics from TrendMLS Market Statistics and believed accurate but not guaranteed)