I have a number of people who have been following the local real estate market for many months, and in some cases, more than a year.  I watch as these folks search my website for listings, and we  have actually looked at homes, from time to time, in some cases. According to an article in the Wall Street Journal, yesterday, some people are finally deciding that the time is right to take advantage of the glut of inventory of houses to choose from, as well as low interest rates, and are taking the plunge.

As the article points out, the housing bust, appears to be creating a new group of winners; first time home buyers.  People who watched as friends rushed to buy homes several years ago, are now in a position to take advantage of what look like, incredible deals.  According to the National Association of Realtors, first time home buyers made up 41% of all buyers at the end of 2008, up from 36% in 2006. 

First time home buyers are in a great position.  They are lured by home prices that are obviously depressed.  In some markets, prices have fallen by as much as 40% from peak levels.  Fortunately, in Bucks County, prices have not fallen as significantly, but they are definitely lower.  Houses are clearly more affordable.

In addition, mortgage rates are near historic low levels. 

On top of low prices, and low mortgage rates, it appears as though there is going to be a great tax break specifically for first time home buyers, in the financial rescue plan.  As the plan is currently presented, first time home buyers may be eligible for an 8,000 tax credit, if they buy in 2009. 

First time home buyers are in a great negotiating position when making offers.  Having nothing to sell, makes them extremely strong buyers.  Often sellers are willing to accept lower prices, knowing that a first time home buyer, with strong credit, is presenting offers that are clean, meaning that there is no worry about the sale of another house. 

Because of the amount of inventory, buyers can be patient and selective.  Although we won't know where the bottom of the market is, until it is too late, it appears to be an ideal time for first time home buyers, to get into the real estate market.

For those who read my blog, I have to apologize for not being very diligent about posting, recently.  Believe it or not, I have actually been pretty busy practicing real estate.  I thought it would be interesting, to offer a brief review of some of the transaction challenges, along with some successes we have seen, of late.  This may help to provide a more accurate indication of what is really happening in the Bucks County/Mercer County, and surrounding areas.

With regards to my listings, I am fortunate in that I am marketing homes in a very diversified price range, from the 200,000 range to well in the millions.  In my opinion, the higher priced market has been impacted more significantly than more modestly priced homes.  An indication of this, is that in Upper Makefield Township, it would actually take years to sell all the houses that are currently on the market, priced over 1 million dollars, based on the current rate of sales.  I recently listed a house priced at 294,900, and we negotiated an offer within the first 2 weeks that the house was on the market. 

I recently listed another property in New Jersey, and we got an offer within the first 4 days of putting the house on the market.  We are still waiting to see whether this will work out. 

If you are wondering what I attribute the fast turnaround to, with regards to both of these recent listings, it is that the homes showed incredibly well, and were priced to reflect current market conditions.  I think that is the single biggest obstacle that we face right now.  I believe that many sellers still are not realistic enough about what happening in the market.  If a house is not priced appropriately, there is no doubt that it will sit on the market for a long time.  There is a lot of inventory competing for the attention of buyers, and there are not enough qualified buyers to absorb all of the inventory.  On top of that, in many areas we are seeing more short sales and bank owned properties than at any time since I have been in real estate. 

I recently had a buyer make an offer on a short sale, and it can be a long and arduous process, since the ability to close the transaction is entirely dependent on the lender accepting the offer.  Depending on the lender, that process can take weeks, or longer. 

Another transaction that I am currently working on, brings up another potential challenge.  I am working with a buyer who made an offer on a property that was absolutely gorgeous.  Totally upgraded, move in condition, and priced at what we thought was a very realistic value.  We wrote an offer, negotiated the price, and thought the process would be quick and easy.  That is until the appraisal came in below the contract price.  Basically that means that the buyer would not be able to get the loan as per the mortgage contingency on the contract.  Somewhat in response to the mortgage crisis, appraisers are now being extremely conservative, so this is not an unusual problem.  Based on the appraisal, we had to re-negotiate the price, and were able to work out a combination of a lower price, and some additional buyer funds to ensure that the house will go to closing.  It was just not an easy process.

I could go on and on with a variety of stories about what is happening in our market.  Prices are challenging for sellers to deal with, but there are houses selling every day.  If you are a seller, be realistic, make sure your house shows as well as it possibly can, and be pro-active in responding to the market.  I have a book that I can email, called, "450 ways to get your house sold quickly".  If you are thinking about selling, I highly recommend reading through this booklet, it offers great advice about getting a house ready to show. 

For buyers, you can be selective, and there are great opportunities in the market.  Interest rates are at all time, historic lows.  Have we reached the bottom of the market?  Only time will tell, but I do know that by the time we know for sure whether we have reached the bottom, it will be too late. 

It has been a while since I posted a specific, statisfical update, of the various Bucks County markets, that I server.  I am sure that everyone realizes that, if you are a seller, in the current market, the market is not very good.  Although Bucks County, still is a lot better off than many areas of the country, we are still going through a very difficult, buyers market.  That means that there are lots of houses on the market, and not many buyers.

Looking at the numbers, through October, of this year, the volume of sold units is noticeable lower than previous years, to date.  For example, Lower Makefield Township is down 28%, Upper Makefield Township is down 24%, Solebury is down 32%, Northampton is down 24%, and Buckingham is down 19%.  This should not come as a surprise to anyone.  The current pending sales, show a similar decline.

The average asking price of homes currently in inventory, as of October 08, has decreased sequentially from September of 07, in virtually all of our markets.  I would expect this trend to continue, until our sales volume increases. 

Inventory levels in October, actually decreased from September of 08, in most of our markets.  If you compare current  levels of inventory to 07, Lower Makefield is down 12%, Newtown down 30% and Buckingham down 9%.  There are some markets where inventory levels have actually increased compared with 2007.  With much lower sales volume, the change in inventory levels does not alter the basic reason for the buyers market, which is, as I mentioned earlier, that there are lots of sellers, and not so many buyers. 

I did have 2 listings that have sold in the past week or so, so there are homes selling.  What did those sellers do that enabled them to obtain an acceptable offer?  Essentially, they made sure that they did everything they could to enhance the way their house showed, and most importantly, they priced it right!  In both cases, we received offers that were within the average discount range, which is currently about 5 % or so, and they were extremely realistic and responsive in the way they negotiated.  In both cases, they will be able to move on with their lives.

Given the current market conditions, it is more important than ever, that homes be priced correctly, and marketed to as wide an audience as possible. 

If you want to see the statistical breakdown of the various markets, please click on the following link:

Bucks County Real Estate Statistics

Please keep in mind that real estate is still extremely local.  Even withihn the same township, statistics can vary from neighborhood to neighborhood.  If you are anywhere in my market area, either in Pennsylvania or New Jersey, I have a great program that will provide you with an emailed report every month, that will show you homes that are active, pending and sold, within about a 5 mile radious of your house.  The report will include days on the market, as well as pricing trend lines.  It is a great way to stay up to date with what is actually happening in your specific neighborhood.  If you would find that helpful, all I need is an address, and an email, and you will recieve the report, automatically, each month.

I couldn't let the election pass, without posting just a short entry, about some of my personal thoughts.  Clearly, political discussions with clients, are dangerous places to go, these days.  I was a passionate supporter of Barack Obama.  Without getting into a political discussion that is too deep for this forum, I feel that the party in power for the past 8 years, has been incredibly irresponsible.  I thought that yesterday represented so much of what makes the United States, such an amazing country.  I thought that McCain's concession speech was fantastic.  I think the election was, obviously, one of historic proportions.  I think that the election of Barack Obama will improve our standing in the world.  I am hopeful that following the election, we will be able to come together, as a country, so that we can get to work trying to solve the incredibly difficult challenges we face.  I had tears in my eyes last night, watching the various celebrations take place, around the country, trying to understand what Barack's election must mean to those who were so opressed, not all that long ago.  Whether or not you supported his candidacy, his election clearly represents a historic positive, for our country.  I pray that Barack Obama will be up to the challenge. I am extremely optimistic about his presidency.

Next post will include news about the current state of our real estate market.

First quarter statistics are in, so we are able to begin to develop a better indication of where things are with regards to real estate in the communities I serve, in Bucks County.  I have written many posts in the past, explaining that the market in Bucks County, is nowhere near as depressed as it is in some markets in the country.  I will address that issue, in another post to follow shortly. 

Here in Bucks County, looking at first quarter statistics, there is no question that we are continuing to experience a buyers market.  That means that there are lots of things on the market, not as many buyers.  One point of emphasis though, is that contrary to what the press would have everyone believe, foreclosures in our area, are still not influencing the market significantly.  I still have buyers who are under the impression that every house currently on the market, is being sold by a desperate seller, who is facing imminent foreclosure.  That is simply not the case.  Virtually every single seller in the market, that I am aware of, is selling for life style, or job transfer reasons.  I have sellers moving up, downsizing, and selling becuase of job transfers.  All of those reasons, are completely normal.

Here is what the statistics show.  The volume of sold/closed units through the first quarter was noticeably lower than last year, in virtually all of our markets.  Lower Makefield Township was actually down almost 30%, and Upper Makefield was down almost 50%.  Newtown Township was actually the exception, in that Newtown showed an increase of approximately 4% in closed first quarter units.

Inventory is trending as one would expect in a buyers market.  Inventory is up from February in all markets.  If you compare inventory levels at the end of March 2008, with March 2007, the results vary from market area to market area.  For example, Lower Makefield's inventory of homes was lower at the end of March this year, than last year, by almost 22%.  Newtown, Upper Makefield and Solebury are higher, as is Buckingham and Northampton. 

Average days on the market are higher over a year ago, reflecting tougher market conditions for sellers. 

Looking at sold/list ratios, shows slighly increasing discounts of between 6 & 10 percent in most markets.

Despite all of the above, the market contines to be extremely price sensitive.  There are still many examples of houses selling quickly, and selling for close to the asking price.  For example, I recently had a listing right in Yardley Boro, on the main street.  It sold in 2 days, for almost exactly the asking price.  Where is the press when that happens!

The message from looking at all of these statistics is that houses are selling every day of the week.  If it is priced correctly, and marketed correctly, it will sell.  It is still a buyers market, but there are still buyers looking, and buyers are making offers. 

In future posts, I will delve into the statistics a little deeper, and I will also reflect on some additional observations about the current market.