The numbers don't add up.
After reviewing the November statistics in Delaware County Pennsylvania, just west of Philadelphia, there is really not enough local sales activity for the numbers to indicate any clear trends. Depending on the area/township viewed, you could demonstrate the market moving in almost any direction desired. Normally, you can look at detailed statistics at the township level and generalize for the county and vice versa - not accurate at this point. So now it is probably better to look at the bigger picture.
The important dynamic here is "How is the overall market doing?", "What impact has the overall economy had on the local activity?". This is where we have seen some dramatic changes.
In Delaware County, PA for November, properties settled with a total value of $64 Million per the TrendMLS system market statistics. This consisted of 275 units sold with an average of 76 days on the market and an average sale price of $247K. To put those numbers in perspective, we had been averaging about $150M/month sales from 2005-2007, or in comparison:
Nov sales were down 43% from the average in 2008 through Oct.
Nov sales were down 55% from the 2007 average sales/month.
Nov sales were down 71% from our June 2005 peak sales month.
The last time we saw this level of dollar sales volume was February 2003 (February figures are usually the lowest for the year since they are roughly based on sales in late Dec/early Jan). The last time we saw only 275 units sold was before January 2000 (the earliest our records go in the TrendMLS system).
What should you do? - get ready. As shown before, prices are generally holding up reasonably well - we just need some stability on the financial side before people will have the confidence to move forward. There continue to be many homes on the market and many ready and able sellers and buyers "when the time is right". There also appears to be quite a bit of cash lying on the sidelines from investors and first time home-buyers taking a wait and see attitude.
This is creating some interesting market dynamics and opportunities. Without a doubt, there is increasing pent up demand. People still need to move for personal or business reasons. If the interest rates continue to decline, at some point, this will reignite the market with an unknown response to price levels. We saw this on the west coast where after the market had been declining for years, once it turned, the prices recovered within 18 months.
What happens now? As a buyer or seller, if you are in the market for the long term, this looks like a good time to be testing the waters. With a new administration coming, we can expect them to do everything possible to boost demand. If successful, we could see a very quick turnaround in both activity and prices toward the second quarter of next year. The next few months could be a great time to make a move or prepare to capitalize on any new opportunities.
As always, if you have any comments or need any more details, please let me know.