Bucks County Home Sale Facts Through September, 2014

The rate of single family home sales in Bucks County increased in September 2014 compared to September 2013. The figures year to date for 2014 show a 4% decrease in the number of homes sold compared to the same period last year. Average prices for 2014 are up 1.2% compared to prices during the first nine months of 2013.

Bucks County market statistics are as follows:

Bucks County Home Sale Facts Through August, 2014

The spring real estate market was brisk, but it has slowed down somewhat in recent months. Prices are up slightly, but more homes are on the market and the number of sales is down slightly. This chart sums up the market for single home sales through the first eight months of 2014.

Bucks County Home Sale Statistics as of July 31, 2014

Single family home prices have stabilized in Bucks County. The average sale price year to date was up by 1% compared with the same period last year. More homeowners are offering their homes for sale with 9.7% more homes on the market as of July 31, 2014 compared with the number for sale on July 31, 2013. While the number of homes for sale increased, the number actually sold decreased by 6.1%.

Homeowners who wish to sell their homes should hire an agent who will help them ready their home for the market so that it will show favorably when compared with the competition, price the home correctly and market the home aggressively.

The Best Time of Year to Sell a Home

Spring is generally the most active time of year for the sale of single family residences. Many people move during the summer so children can start school in a new district in September. That doesn't mean that homes don't sell at other times of the year. Not everyone has school age children that are affected by a move. People move for many reasons and may have little control over the timing of their move.

Some sellers delay listing their homes until spring. Doing so doesn't necessarily result in a higher sales price. More buyers may shop for homes in the spring, but there are also more homes to choose from at that time, and sellers have more competition. The summer and early fall are great times to sell a home as well.

Bucks County Real Estate Sales Through April, 2014

Statistics are in for Bucks County Real Estate Sales for the first four months of 2014.

There was a very significant decrease in the number of both pending and settled home sales in April, 2014 compared to the sales in2013. Prices have been relatively stable, and homes have been selling more quickly than a year ago.

Bucks County Home Sale Stats through 12/31/2013

Single family home sales in Bucks County were up significantly in 2013 with 19.3% more homes being sold during the calendar year. Prices were up slightly for the year with an increase of 2.4% in the median sale price of all homes sold.


Pending sales decreased in December, but there was a significant increase in the number of settlements. Fewer homes are on the market, so buyers have been unable to negotiate as great a discount off of asking prices as in past year.


The statistics below refer to ratios of sale price to original listing price. Many sellers reduce the listing price during the sale process. These figures do not reflect the most recent list price.

Bucks County Home Sales Through October, 2013

The first ten months of 2013 showed continued improvement in the Bucks County home sales market. Spring and summer sales were robust, but some of the pent up demand has worked its way through the market and the number of pending sales in October, 2013 were about equal to those in October, 2012.

Bucks County Home Sales Through June, 2013

 

A Tip for Septic System Care

I recently attended a septic system inspection.  Unfortunately, the system failed and needs replacing.

It's difficult to say exactly why its condition deteriorated.  The tank had not been pumped as recently as it should have been.  Also, the house has a garbage disposal which generally requires more frequent pumping than houses that do not.

One issue that jumped out at me was when the tank had been pumped, it had been pumped through the air vent.  The proper way to pump a septic tank is by removing the septic tank cover.

I've owned homes with septic tanks for over twenty years.  On two occasions I've caught the pumping company trying to pump the tank from the vent. Doing so will not properly remove all the solids from the tank and could eventually lead to solids getting into the leaching lines. 

The crews for the septic pumping companies sometimes take this short cut because many tanks require significant digging to uncover.  Digging down three or more feet when the ground is either dry or muddy is a nasty job.  It's not surprising that an unsupervised crew would seek a short cut.

When another one of my clients had their septic system inspected, it took a lot of digging for the septic tank cover to be reached.  They decided to add an extension to the tank opening so it could more easily be pumped in the future.

Not everyone can stay home when their septic tank is scheduled to be pumped.  However,
if the ground over the septic tank has not been disturbed, the pumping crew is likely to have taken a short cut. Beware.

Selling a Home in Bucks County

At a recent office meeting, we discussed the current state of our local real estate market.

Articles in our local newspapers cover the national market and are reporting significant price increases in many parts of the country.  During the real estate bust, areas such as California, Florida and Arizona had price decreases of 50%. Those areas are now recovering and home prices in these areas have increased significantly when compared to their recent lows.

Bucks County did not experience the extreme speculation in housing that occurred in some areas of the country.  On average, home prices in Bucks County decreased by about 15-18%.  Older homes and luxury homes decreased more significantly.

Homes in Bucks County are now selling faster than they have in the past few years and, buyers, who were spoiled by an unusually high number of homes on the market, are now complaining that there aren't enough homes to choose from.

In many cases, sellers are concluding that they can ask considerably higher prices for their properties than their realtors are suggesting.  This is not the case.

I've heard projections from knowledgeable sources that local prices in the next few years are likely to appreciate from 1-3%.  Sellers who cite national statistics are often misguided.  We did not have the severe market appreciation or decline experienced by many areas of the country; so, we can't expect prices to increase as significantly as in other areas. 

Buyers are acutely aware of the recent bubble and bust in the housing market and that prices are not guaranteed to increase. A wealth of information is available on the Internet and buyers are reviewing it.  Buyers are comparing properties and have a good understanding of real estate values.  They are cautious and unlikely to overpay for a property. 

Occasionally, a relatively high price will be agreed upon by a buyer and seller.  If a mortgage is involved, the property will have to be appraised.  Because of past problems resulting from loose lending practices, lenders are being cautious and appraisers are being conservative.  An above market sale price is likely to become an issue when the appraised value is determined to be less than the agreed upon price.

The keys to selling a property in our current market are:

• Pricing
• Condition
• Marketing

Your realtor may do a great job of marketing, but if the price is unrealistic, your home is unlikely to sell. If the condition is not ideal, sellers cannot expect top dollar for their homes and the price should be adjusted accordingly.

Bucks County Home Sales Statistics 2012

The pace of home sales has definitely increased in Bucks County.  Buyers have been spoiled over the last few years and are now complaining that there aren't enough homes on the market to choose from.

Sellers should welcome the increase in home sales.  Their homes should sell faster than they would have sold two or three years ago, but they should not assume that prices will significantly increase in the near future.

On average, home prices increased  .1% during the 2012 calendar year.  Newer homes appreciated more than older homes. Home sale prices,  now approximate 2004 levels, and are expected to increase modestly over the next couple of years.

It is an excellent time to be a buyer.  With home mortgage rates low,  qualified buyers can afford to purchase homes that would have been out of their price range five years ago.

Market Trends

The past several years have been tough for homeowners who were trying to sell their homes or hoping to increase their equity.  Will the next few years be any better?

No one has a crystal ball, but the predictions made by Fiserv's chief economist are in line with the opinions I've heard from others in the field.

According to an article in the December issue of Money magazine, Fiserv predicts a choppy real estate market in 2013 with prices increasing 3.4% from midyear 2013 to midyear 2014. That trend should continue with an annual increase in values of about 3.3% over the next five years. Keep in mind that these are national projections and local markets will vary.

The predicted annual increase of 3.3% may seem modest compared to the double digit increases between 2000 and 2006, but those increases were caused by loose mortgage lending practices and real estate speculation. 

Many older homeowners have been spoiled by the rapid increase in home values since the 1970's when the Baby Boomers entered the housing market.  Much of the rise in home prices between the 1970's and 2000 was due to the increased demand for housing by this large demographic group.  Now that the Baby Boomers are settled in homes, or are downsizing, demand for housing should more closely match the supply, and prices are likely to appreciate more slowly than they did during that period.

Bucks County Home Sales Statistics Through August 2012

The Bucks County Residential Real Estate Market appears to have bottomed out and is now showing signs of improvement.

Statistics for August 2012 vs. August 2011 show an 8.7% drop in the number of homes for sale and a 23.9% increase in the number of homes that settled.

Sale price information is less conclusive.

Figures for 2012, as compared to August figures for 2011, would suggest prices have risen by 7.4%; however, year to date figures for the first eight months of 2012 compared to the first eight months of 2011 show a very slight decrease in prices. Different periods of time produce notably different figures.

Home prices have leveled out but cannot be expected to rise quickly.  The unprecedented rise in home prices between 2000 and 2006 was artificially created by loose lending practices.  We cannot expect home values to again reach their 2006 levels for many years to come.

Now is a great time for buyers to purchase a home.  Mortgage interest rates are extremely low and home market prices do not seem to be getting any lower. For those waiting for the market to bottom out, this may be it.

Bucks County Home Sale Statistics Through March, 2012

It is starting to look like the home sales market has turned around in Bucks County, PA.  Here is a chart created by the local Multiple Listing Service, TRendMLS, showing single family home sales statistics for March, 2012 compared to March, 2011. It also shows year to date figures.  

• The number of single family homes for sale dropped from 3,702 to 3,413 in the past twelve months.
• During the first 3 months of 2012, 864 homes sold compared to 778 during the first 3 months of 2011. 
• The ratio of Sale Price to Original Listing Price for March, 2012 has increased by .6%.compared to a year ago. Original Listing Price reflects the price of a home when it was first listed under the contract in force at time of sale.  If the price of the home was reduced after its initial listing, the reduced price is not reflected in this number.

For those buyers waiting for the market to bottom out, it may have already done so.  Buyers are fortunate, however, mortgage interest rates are at historically low levels providing those who qualify a lot of buying power.

Bucks County Home Projects with the Highest Pay Back

According to the latest Remodeling on Cost versus Value Report, in the Philadelphia area, the home improvements that provide the highest pay back are deck additions, attic remodeling, minor kitchen remodeling, major kitchen remodeling, bath remodeling and new siding.

This isn't surprising,  I was surprised , however that new fiber cement siding led the list with a 70.6% return on investment.  This is a great product, and home buyers evidiently prefer it to new vinyl siding.

Bucks County Home Sales Statistics 2/29/2012

The housing market appears to be improving in Bucks County.  Statistics for January and February are favorable, but it's too early in the year to draw definite conclusions.  The number of sales are up, but conclusions about pricing trends are difficult to make at this time.

Bucks County Property Taxes

How do Bucks County Property Taxes differ from one community to another?

The school property tax rate varies by school district and township. Here's the county's web reference to the various milleage rates for each community. The milleage is applied to the assessed value to determine taxes.
http://www.buckscounty.org/government/departments/finance/BoardofAssessment/MillageRates.aspx

Be aware that the assessed value of two properties that are both appraised at the same market value can have notably different assessed values. A general county wide assessment has not been performed since the 70's; so, property assessments don't necessarily reflect market values.

Communities with few commercial or industrial properties will have higher tax rates than those with such sites.

Bucks County Home Sales: January, 2012

The number of homes sold and the average price of sales increased during the first month of 2012 compared to January 2011.  We'll have to wait and see whether a trend is developing. 

                                      

              

Credit Scores and Interest Rates

Most people realize that credit scores have a major impact on whether they can obtain loans and whether they can obtain favorable interest rates; but, credit scores can also impact insurance rates and even how you are perceived by a potential employer. A good credit score is key to obtaining a mortgage, favorable insurance rates and maybe even getting a job.

So, what is a credit score? A credit score is a number assigned to individuals and is meant to predict the likelihood of their repaying a loan.  The formula was developed by a company called Fair Isaacs, and the result of the formula is called the FICO score.

The intricacies of the formula remain a company secret, but its general components are well known. Here is the weighting given to each of the factors:

1)      35%  Bill Payment History- If you pay your bills on time you will rate high in this category.  Those who pay late, have had bills sent to collection agencies or have had bankruptcies will be rated lower.

2)      30%  Amount of Debt Outstanding-The ratio of debt to available credit should not be great.  Persons who max out their credit cards will rate lower in this category than someone who maintains a ratio of 10-30%.

3)      15%  Length of Credit History-Being a responsible credit card user over a long period of time increases your score as does maintaining credit with the same credit card issuers for a long time.

4)      10% Credit Mix-If you have had several types of credit, for example, a mortgage, car loans, student loans and credit cards, you will score higher than if you just had credit cards. This factor assumes a mix of credit demonstrates that you can handle various types of debt.

5)      10%  New Credit and Credit Inquiries- A number of inquires about your credit in a short period of time, suggests you may be in financial difficulty and trying to increase your credit limits.  It’s prudent to avoid opening up new accounts unless you need to, and to avoid doing so within a short period of time.

The national average credit score is around 690 and the median score is around 710. 

If you are thinking of refinancing a mortgage or buying a new home and are concerned about your credit score, a good mortgage broker may be able to help you.  Many are knowledgeable about credit scoring and may be able to help with a strategy that will have the greatest impact on improving your score. There is no quick fix, but paying down some debts will have a greater impact on your score than others.

The Dilemma of the Bucks County Home Buyer

The baby boom generation was fortunate.  During their prime home buying years, home prices were rising. Their starter homes generally increased in value, and they had sufficient equity to purchase their move up homes.

Today's buyers in their 30's and 40's may want to purchase larger homes, but frequently find that their starter homes have lost value and they have insufficient equity to pay for the down payment plus the closing costs required to purchase a more expensive home.

The traditional four bedroom Bucks County colonial may sell for $300,000 to $500,000.

With a conventional mortgage requiring a 20% down payment plus closing costs, a buyer needs about $75,000 to $110,000 in cash to purchase a home. These costs may be prohibitive, but before giving up the dream of a larger home, there are options that should be considered.

 It may be possible to purchase a home with a 10% down payment, or with an FHA mortgage which requires a lesser down payment.   Also, the buyer can  request the seller contribute towards the closing costs. Buyers should discuss financing options with their agent and a good mortgage broker to determine whether the home of their dreams is affordable.

 I've heard some buyers say their current  home needs to appreciate before they can buy a new home, and they are unwilling to take a loss on their current property.  That may be a mistake. If their starter home appreciates, the larger home they would like to purchase will have appreciated as well.  Also, with inflation, mortgage rates generally rise; so, buying power decreases.  Buyers waiting for their first homes to appreciate may find themselves priced out of the move up market.

Buyers wishing to purchase more expensive homes, who can afford the down payment and closing costs, are probably better off selling their starter homes at a loss and purchasing larger homes while prices are low and mortgage rates are at record lows.

 Buyers who would like to purchase a new home, but cannot afford to put 20% down plus closing costs, should discuss their financial situation with their agent and a good mortgage broker before ruling out it out.