Changing Dynamic of the Berks Real Estate Market
Low available housing inventory, escalating mortgage interest rates, and a sneakily improving economy are changing the dynamics of the Berks real estate market. If you are considering buying or selling a home in Berks, here are some thoughts on ways to keep up.
For years Berks real estate has been trudging along with low growth while other areas throughout the country have been booming. I have often said that if you want to know what is happening in the Berks real estate market look at housing statistics of more substantial real estate markets twelve or more months prior. It seems Berks is always last to the party, good or bad. Berks is now catching up.
Why the Dynamic Change in the Berks Real Estate Market?
Supply and Demand ~ According to Trend statistics, total available home inventory in Berks peaked in September of 2010 at 4,237 units. As of the writing of the article, that number has shrunk to just 1,115, a 74% drop!
Economic Urgency ~ Mortgage interest rates have been stable and low for some time. Recently rates have started to climb. This rise in interest rates creates a new narrative of urgency for buyers. Find a house now and lock that interest rate before they go up and I cannot afford that house!
Confidence in the Economy ~ Tax season is upon us, and it looks like recent changes may put more spending money in the pockets of millions of Americans. Last I checked, this includes Berks Countians. More dollars and an economy on the rise give people ability and confidence when making the most significant purchase of their lives.
Time of Year ~ It is spring in Berks, hooray! People often ask when is the best time to sell a home. In Berks, it is clearly in the spring and summer months. There is a large contingent of seniors who want nothing to do with trying to move in the winter months. There are also a lot of great school teachers who have three months out of their year to do things like finding a new home before returning to the classroom in the fall.
Managing the Market
Seller Considerations ~ Sellers want top dollar for their homes and have a great chance of achieving that goal in this market. That said, it is still very important to price your home responsibly. Overpriced homes don't fare well in any market, up or down. A buyer may desire to pay more for a home, but if they need a mortgage, it will be up to the appraiser. A well-priced home will not have issues appraising. If you take a much higher offer because of aggressive interest in the home, make sure to have controls in place so the appraisal is less of a factor.
In recent months I have seen many multiple offer situations on houses. Some are handled very well and some not. It is my sincere hope that our local MLS or Association considers guidelines on how best to manage multiple offer situations. The MLS could create a category like "ACTIVE- C" that tells other agents there is an existing open offer on a property and the date in which the offer will be presented to the seller for consideration. This kind of official notice would alert other agents of the situation and allow them to represent their client's interests accordingly. Presently, agents call other agents and ask if there are any offers on a property. This practice leaves room for some contentious moments and harmful speculation. Any guideline that helps create fairness in these types of situations could be a big win for buyers, sellers, and their agents.
Buyer Consideration ~ In this dynamic market, a buyer may only get one chance to own the house they desire. If the buyer offers a lower number in hopes of negotiating and another offer comes in that they may not be aware of, the home could be lost. Buyers need to be aggressive if they genuinely want the home and offer their highest and best right away.
How long a home has been on the market is often a consideration when making an offer. In a fast-moving real estate market, this particular dynamic can change rapidly. A house that has been sitting for a while call all of a sudden catch fire and have several takers.
The real estate agent's role in this dynamic changing market cannot be understated. Whether buying or selling a home make sure you have discussed a strategy that will suit your desire and expectations.
Knowledge is Power!
Jeffrey C. Hogue