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Housing Market Update

July 21, 2011

If you heard my talk on Tuesday, you know that economists are not predicting a housing market comeback until 2015.  There are different ways to read the results of the “pundits'” comments and, rather than looking at it as doom and gloom, I would like to add some of my perspective.

This is a recent article from Inman News, who reports on the housing industry: http://lowes.inman.com/newsletter/2011/07/06/news/146751.  This article details the thoughts of over 100 housing experts who were interviewed by MacroMarkets, LLC.  Most of those interviewed believe  that this is the year when housing prices will bottom out – which coincides with my observations, as well.  Some say that the bottom occurred in the first quarter; others say prices will continue to decline, though not dramatically, through the end of the year.

Because real estate is such a localized industry, it is important to understand where your particular geographic area is in this process.  I have heard reports that southern California – one of the hardest hit regions since 2008, with up to 60% reduction in housing values – is now experiencing some investor interest and sales are starting to rise.  With demand will come higher values, although we probably won’t see anything dramatic for a long while.

Many hope we will never see the dramatic growth we saw in the beginning of the 2000’s.  That growth was based on false economic expectations and unsound lending practices and we all witnessed those results.

In Chester County, PA, our reality is that we saw housing values decline by just above 13% since 2007/2008.  We saw foreclosures rise dramatically.  Yet, according to numbers recorded in TREND, our MLS system, in May of 2008 in Chester County, 489 houses went under contract; in May of 2010, 297 went under contract; and in May of this year, 476 homes went to contract.  That is a significant statistic, in my opinion, indicating that the decline has ended in our area.  It indicates that consumers – buyers and sellers alike – have decided that they can have confidence that they will not be losing money in their decision to buy or sell now, versus waiting.  Values are expected to remain close to this level with only very moderate increases (3% or less) through 2015.

If you need help deciding if this is the right time for you to buy or sell, please feel free to give me a call.  Most home selling/buying decisions start with an analysis of the current situation.  I will be happy to help you figure out your options.

Patty Cunningham, Realtor®
Coldwell Banker Preferred
Exton, PA 19341
O.        610.363.6006
C.        610.659.4669
Lic #RS294054

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