Keeping a watch on the ever-changing real estate market in Lancaster County, PA and surrounding areas is part of my weekly routine. I thought I would update my readers on the latest inventory trend for Lancaster PA homes for sale and the other adjoining areas that make up our local MLS network.
An important measurement of the status of the real estate market is called "inventory", which is the projected number of months it would take to sell through all the current home listings out there. The two components of this measurement would be the total active listings and the rate of sales per month. If the sales rate is down and the total listings are high, the inventory climbs...make sense? Each year we see an upside-down curve happen where the inventory is higher in the early months (winter) and drops through the summer months, only to climb again into the fall.
Here's the chart for 2006-2007:
Looking back to 2006 we see that the inventory started in January at 7.11 months and dropped to 4.27 months in mid-year, bouncing back up to the high sixes in the final months. 2007 started off at 8.19 months in January - not a good number. This indicated the beginning of the slow market for homes in Lancaster PA.
2007's inventory curve bottomed out at 5.35 months of inventory in August 2007. Not too bad of a number. Unfortunately, the curve climbed precipitously into the fall and Stood at a phenomenal 9.76 months of inventory in December of 2007. That's almost a whole year at the current sales rate! January won't be much lower, I expect.
Note that the rate of sales throughout 2006 and 2007 hasn't changed appreciably - that's the dark blue line. What's changing is the number of active listings - the green line up top. More folks are listing more the number of sales for month isn't climbing accordingly. Why? I'd suggest that the list prices are too high and buyers are sitting things out right now. If you're an agent in this market I'm sure you've experienced this firsthand...
What's in store for 2008? Only time will tell if this spring season drags the inventory back down. We need a better sales rate to get the inventory under control in Lancaster County, and that means intelligent pricing and the willingness to negotiate on the part of sellers. It also means that buyers need to go for it, and not wait out the market for something else to happen. The time is now...
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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!
Jeff
I don't think it is that bad compared to the rest of the United States
Sincerely
Tom Braatz
That's a great point, Tom - The Lancaster market has been blessed with a stable situation, certainly in comparison with what I'm hearing about in the bigger metro areas. As a manufacturing and agrarian area, we're a bit more immune to big fluctuations which I for one am glad for.
Of course, all real estate is local, so I'm trying to compare apples to apples (that is, Lancaster today versus Lancaster yesterday) and the market here is slumping in that analysis. If we see more buyer activity this spring I'm confident the market can rebound to pre-2007 numbers.
In the meantime, Lancaster is still a great place to relocate to and find a great home at a great price! Come on over, the water's warm...
Another good point, Brian - competitively priced homes are indeed selling quick! Wouldn't a seller want that?
Lenn - quoting Churchill for real estate? Hmm...