2008 Year End Review - Southern Chester County, PA

The Housing Market (chart 1) ended the year with a decline of 18% in the number of sales (767 units) compared to the prior year total of 934. The number of properties available for sale increased by 2.4% to roughly 900 homes compared to this time last year. Pricing indicators show the median sales price declined 6.4%, from $375,000 in 2007 to $351,000 in 2008. A further sign of the change in this area is the 3.2% decline in the average sales price, $420,268 vs. $433,963 this time last year. 

The various market segments within Southern Chester County experienced decreases from 1% to 33% with the exception of Avondale, which saw an increase in median sale price, and Pocopson Township which was unchanged. Many of the market areas had relatively few sales though, which will skew the data from one year to the next. The year over year results within this housing market are a testament to the fact that "real estate is local" (see chart 2).

The days on market until a property is sold has increased to 94 days, compared to 77 days last year.  Potential buyers are taking longer to make purchase decisions and have more property choices.  As inventory rises, there is the expectation that there will be an increase in negotiability resulting in larger discounts from list price.

Looking at three housing market indicators on a monthly basis - the number of new listings coming on the market, the average number of days it takes for a home to sell and the sold price as a percentage of the original list or "asking" price - all confirm that the market is showing the continued stress of our weakening economy and tighter credit.

For the year 2008, the number of new listings decreased 10.5% (chart 3) compared to the same time period last year - fewer properties entering the market is a positive trend for the overall absorption rate of homes for sale. Homeowners who have no urgency to sell are clearly reluctant to list their properties until economic conditions improve.  The average time on market prior to sale has increased 22% in comparison to last year and has trended down over the past 6 months (chart 4).  Lastly, there had been some improvement in the "sold price" as a percentage of original list price until the month of September, since then it has declined to 90% (chart 5).  Homes are selling with further reductions from the original list or asking price, as motivated sellers seek the "new market price" for their properties.

Looking to sell your home in today's market? Realize that you must commit to pricing it better than the vast majority of its competition. Gone are the days when "Location, Location, Location" ruled the day, now it's "Price, Price, Price"!

If you are in the market to buy; despite what you hear, mortgage money is readily available within a changed lending environment. A larger down payment, larger cash reserve, and tighter qualifying ratios can be expected.

(All reports presented are based on data supplied by TReND MLS. TReND MLS does not guarantee nor is it responsible for its accuracy. Data maintained by the MLS may not reflect all real estate activities in the market. Information is deemed reliable but not guaranteed. Data is as of 1/20/09. For analysis purposes, Southern Chester County includes Avondale Borough, Birmingham Twp, E. Marlborough Twp, E. Nottingham Twp, Elk Twp, Franklin Twp, Kennett Square Borough, Kennett Twp, L. Oxford Twp, London Britain Twp, London Grove Twp, New Garden Twp, New London Twp, Newlin Twp, Penn Twp, Pennsbury Twp, Pocopson Twp, U. Oxford Twp, W. Marlborough Twp, W. Nottingham Twp)


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