Home sales slumped across the region during the month of September, a typical seasonal trend.
Yet despite slower sales, many industry professionals hold new-found optimism about the state of the residential real estate industry.
“We are seeing an increase of buyers entering the market at rapid rates,” said Bill Sands, broker and president of Sands and Co. Real Estate, Wyomissing, Berks County.
“A combination of the low interest rates, and the fact that buyers realize if they buy in today’s market they are not going to lose their shirt in six months if property values will continue to drop, is bringing a lot more buyers in the market.”
Although home sales fell slightly last month in Berks County, September sales inched up 7.8 percent from last year, rising from 267 homes sold in 2011 to 288 in 2012.
“Providing (the buyers) are well qualified, they are able to capitalize on the current market and get a great deal on a home because all this activity is not yet equating to an uptick in values,” said Sands. “What it’s doing is it’s absorbing the existing inventory. Once we reach a six-month level of inventory, then we are going to start to see the market shift from a buyer’s market back into a seller’s market.”
Sands predicts prices will start to appreciate late next year if strong buyer interest continues and interest rates remain low.
“For sellers, they have a lot of competition,” he said. “They have to put their best foot forward both in pricing and condition because buyers are still very picky. They have a lot to choose from. Even though there are a lot more buyers coming back into the market, they are going to select the best bang for the buck.”
Some observers believe more buyers continue to enter the market since they recognize imminent changes.
“I think some buyers are getting scared with the market starting to bounce back,” said Frank Renaldi, Jr., immediate past president of the Lehigh Valley Association of Realtors and real estate agent with Century 21 Pinnacle, Bethlehem. “They don’t want to miss this window. Some people are looking at it, if we have had steady volume growth over the last nine, ten months, it’s only a matter of time before everything evens out and we get back to a normal appreciation. And I think they are trying to grab hold of some great deals before that happens.”
Statistics show more deals and sales. September home sales jumped 8.5 percent from September 2011, rising from 431 homes sold to 468 in 2012.
“We really need volume to stay on the rise in order for us to get through some leftover inventory, dead inventory, in order for us to stabilize and equal buyer and seller markets,” said Renaldi. “That’s when we will see prices start to pick up.”
Renaldi believes that transition has begun as investment buyers continue to whittle away at excess housing inventory.
“I am encouraged,” he said. “I thought that over the summer going into the fall we would see a little bit of a slowdown, and my second and third quarters have been incredible. As long as we trend the way we have been over the last year, I do think that 2013 will be as good as or better than 2012.”
A Carbon County real estate agent agrees.
“I think once we get past the elections, it will help people take a breath for another four years that the conflict politics is over,” said Pam Hawk, real estate agent with ERA One Source Realty, Lehighton. “I think it’s going to improve no matter who gets in. The whole pulse of the country is getting a little better slowly.”
Hawk also sees an increase in buyer interest and construction activity – something relatively absent over the past few years.
“It’s definitely picking up by not by leaps and bounds,” she said. “We also heard from builders that there are some building projects going on. That’s real good news if construction is starting again. It’s not a lot but anything is better than zero.”
Hawk attributes the pickup to increased confidence in the economy combined with low interest rates and home prices.
“A lot of people that were able to were holding off,” she said. “It was uncertainty. They are now ready to move. They could hold off for a little bit but they are now making moves that are not necessary but wanted.”
Move-up buyers also are tapping into higher-priced inventory in nearby Schuylkill County.
“It’s starting to slow down a little bit right now, but this year compared to last year from say May through September was busier than it was last year at this time,” said Bud Yacobowsky, broker with Red E Realty, Pottsville. “In fact, our company has seen the higher-price ranges pick up where last year and the year before anything in Schuylkill County (priced) $225-, $250,000 was stagnant. This year this market has seemed to pick up.”
Yacobowsky sees other factors showing change in the local market.
“There is also a little bit of an increase in new construction,” he said. “The builders are starting to build some homes again where for maybe the last two, three years there was hardly any new construction going on.”
According to Yacobowsky, prices remain low but are leveling off. Pent-up demand has buyers moving inventory, a sign he believes translate into a better year in 2013 as long as interest rates remain low.
Another real estate professional shares that belief.
“I think we have finally hit bottom and we may be starting to creep up, but I emphasize ‘creep,’ said Sandi Meisse, associate broker with Re/MAX Results, Sciota, Monroe County. “Sales are up. It’s been a good year. The number of listings have come down somewhat and things that are priced properly are selling quickly. I think we hit bottom on prices and they might be creeping up ever so slowly.” Meisse sees a slight decrease in inventory and attributes that to continued low interest rates, tax advantages and pent-up demand.
“We’re selling second homes,” she said. “We’re selling vacation homes. They are getting an excellent value right now. Prices have never been this low for many, many years. I think that things are going to continue if people feel safe. They have to feel comfortable with their financial situation.”
Buyers also show increased confidence in the economy in Warren County, New Jersey, where activity improves.
“Things are improving but it’s still flat,” said Victoria Prodromitis, real estate agent with Coldwell Banker Residential Brokerage, Clinton, Warren County, New Jersey. “Prices are holding. We are not increasing but we are not going down, either. Even though we are flat, we are not gaining just yet. Hopefully that’s the next step.”
Prodromitis sees other hopeful signs of a turnaround, including multiple offers on properties priced appropriately and in good condition.
“In the new year, the forecasts are all positive in our industry,” said Prodromitis. “If you watch the stock market, all the developers, their stocks are all up over the past year. That’s a good indication. That means people are confident that it’s coming back.”