The October report from the Lancaster County Association Of Realtors came out this past week, answering the question in many realtors and customer's minds - how will this fall season start out? This year has been a depressed one in general, as the County home market fights off the incessant national malaise.
October is the first full "fall" month where buyers are closing on homes after the start of the school year. October is also the last "movers month" before the holidays set in and homeowners hunker down to wait for the spring thaw.
October 2007 was a truly disappointing month for home sales. The most-reported figure is 24%, the amount the market fell in total from 2006 to 2007. Some point to the $195,908 average home price as a positive offset to the drooping number of closings, but there's a lot more going on beneath the surface.
To get the full impact of the housing crunch in Lancaster County, one has to know where the key price points are that fuel the industry. For Lancaster that would be the under $120,000 range, reflecting the bread-and-butter Lancaster City homes for sale, and the $180,000-$250,000 range, which straddles the county average and is where the vast majority of single family resale listings fall (your typical suburban neighborhood).
Here's the breakout:
Under $120,000 - Down 46% from last year
$100,000 to $120,000 - Down 49% from last year
$180,000 to $200,000 - Down 27% from last year
$200,000 to $250,000 - Down 41% from last year!
I believe that the numbers indicate something really disturbing:
First, that the bulk of new construction that was planned out two years ago is now either stagnating on the market at $400,000 plus prices or being built by reluctant builders who've seen the handwriting on the wall, but who are committed to development plans and the resulting price points.
Second, that as these homes do sell in small numbers and buyers list their homes, the average price is artificially driven up due to the "churning" effect of mid-upper end homeowners just trading up or laterally. Sales between $250,000 and $400,000 were actually up 4% over last year. Unfortunately, their first home is still on the market...
Third, the bread and butter Lancaster County single family resale home is priced beyond the average family's means, with list prices of $289,000 or even $299,000 where $229,000 was once the norm. Forget about something spacious for $175,000 - you'll be lucky to get a 2 bedroom ranch for that price today. First-timers are officially gone from this market segment.
Fourth, that home prices are now squeezing buyers out even in Lancaster City, which in recent years has become a bastion for young couples and singles to purchase a home on a nice block and fix it up for under $120,000. Now, because of many contributing factors, the "nicer" city home is being priced beyond $130,000 or even $150,000.
So, where is the growth (if any)?
$160,000 to $180,000 saw a 6% bump over last year - and I'd wager that many of these were townhomes in various neighborhoods where prices have skyrocketed but remain more affordable than single family homes. $140,000 to $160,000 stayed flat to last year, which is a positive in this market. If you've got a townhome to sell you're in a good spot.
Time will tell how the winter goes for Lancaster County - I fear it'll be a cold one...
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For Lancaster PA homes for sale click here. Jeff Geoghan is a top real estate expert in Lancaster County, PA, and an involved community member. Jeff's work has been featured in the Lancaster Newspapers, WGAL Channel 8, PA Business Journal and Wall Street Journal. Jeff's blog on Lancaster County and its homes is nationally-featured. Contact Jeff for more help with your Lancaster PA Real Estate needs. Jeff is also a photographer - view some of his portfolio. Comments are welcome!
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Jeff. Your statement:
"single family resale home is priced beyond the average family's means,"
says it all. Same thing here. I've been saying this for months. Homes are priced out of reach for too many of our home buyers.