Whether you like to live where you get your hands dirty in fertile farmland, prefer the convenience of easy access to urban arts and culture or somewhere in between, Berks County offers a variety of residential housing options.
Similar to other areas across the region, buyers in the county take their time weighing all options before committing to a home.
The first half of the year has seen mostly flat sales when compared to 2013, but that’s an uptick after a poor start to the year because of the snowy winter.
“The first quarter of 2014 was slow,” said Vicki Venezia, president of the Reading-Berks Association of Realtors and real estate agent with RE/MAX of Reading. “Sales and pending sales have not rebounded after the bad winter. First-time homebuyers have not returned to the market as expected.”
Venezia attributed slower sales not only to wintry weather but also 29 percent fewer distressed sales.
“REO or bank-owned sales fell 8 percent, and the number of short sales has been cut in half compared to 2013,” she said. “Price growth is rising faster and inventory is down. With the higher unemployment rate, consumers are not confident in making new purchases.”
Venezia said the slowdown in sales will take several years to bounce back but eventually will create a more stable market.
“A rise in the Berks County real estate inventory and the effects will reduce the number of investors and their presence in the market, which should in time lead to higher average sale prices,” she said. “Despite a housing market that appears to be slow, I believe in 2015 the economy and housing market will continue to see improvement.”
Steve Keiser, president of the Real Estate Investors Association of Berks County agreed with Venezia.
“We see steady growth in the outside area of Berks County, outside the city, so there is cautious growth, but it’s not to the point where it should be or needs to be,” he said. “Everything is cyclical. Real estate will rebound.
“People always need a place to live. If you buttress the residential community, the commercial community follows, so it’s important.”
Keiser said the economy, high real estate taxes, nuisance fees and other costs of home ownership will deter investors and potential homeowners from moving forward.
“There are just unbelievable opportunities out there, but there seems to be a lack of willingness to commit,” he said. “I don’t see a lot of new money coming in, and that’s the disturbing part. Years ago, home ownership was a reality of the American dream. Today you see a lot of people that are happy to rent.
“We don’t have a high-tech community. We have what’s left over of a factory community, so you are not going to have $1,800-a-month apartments here. You are going to have $5- and $600-a-month apartments.”
PRICES INCHING UP
Others see tentative buyers yet also see positives.
“Right now, I haven’t seen too much improvement in the Berks County market from last year to this year,” said Jaime Perez, real estate agent with Betances Realty, Reading. “We did see some growth the two years prior, but this year has seemed to level off.
“Long story short, we are slightly behind the production we hit last year. The good news is the median sales are a little bit higher. The percent of asking to selling price is a lot better, too. We are seeing sellers get closer to 92 percent of asking price, whereas last year it was closer to 91.”
Perez attributed the snowy, cold first quarter weather to the slightly slower sales to date but remains optimistic for the rest of 2014.
“Right now, you’re starting to see that home prices are going back up again,” he said. “It’s very fragile, but they are starting to go up. That might start to entice more buyers to come off the fence because we are very close to if not already at the end of the prices declining or stabilizing. I think now that you are going to start to see them go steadily up.”
Perez sees more competition because of a smaller housing stock and potential higher interest rates as other catalysts for buyers to act.
FEWER DAYS ON MARKET
One Berks County broker also sees positive signs for the residential market.
“What we have seen is the beginning of 2014, there is a reduction in inventory and a reduction in the days on the market,” said Jeff Sicher, broker/owner of the John Monaghan Group of Kutztown Realtors, Kutztown.
“That’s a real good sign as far as there becoming more balance in the marketplace, as far as balance on inventory and demand, and I see that continuing. I see a balanced market really to the end of this year and into 2015.”
According to Sicher, that balance will create a healthier and more stable residential market.
“Sellers are willing to negotiate more,” he said. “There are some more buyers on the market, so we are seeing more multiple offers, and interest rates are still historically low. They have increased a tad from last year at the same time.
“There is more confidence with consumers. They hear that the unemployment rate has dropped again. They are hearing that values have gone up. So I think those bits of positive information are having a positive effect in the marketplace. What we are seeing now is a healthy balance and healthy growth for long-term stability in the marketplace.”
Sicher said that as long as interest rates remain stable and buyer and first-time homebuyer confidence remains strong, buyers will be willing to take on debt and the market will continue to move.