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.
