I still remember the day I was out meeting with a client when I got word that real estate was being shut down. No appointments, no showings, no offices open, etc. Real estate was completely shut down across Pennsylvania for six weeks in the spring of 2020 due to the pandemic. There were people without homes living in campers, and transactions stuck in transition, as everything came to a grinding halt.
All of a sudden people were working from home. Kids were home. Dogs were happy! This brought a huge shift as people realized they needed more space or upgrades. When things opened up, we had a surge in home remodeling and you couldn’t get wood or furniture. We also had a surge of people looking for homes as they needed more space, or realized they could work from anywhere. At the same time, would-be sellers held off, unsure of the future and concerned of health risk with people walking through their home.
So began the seller’s market we have been stuck in! Since spring of 2020 we’ve seen home inventory tighten and home prices skyrocket. It’s the law of supply and demand. Not enough housing supply for the amount of buyers looking – and the cycle keeps tightening. More would-be sellers now are afraid to list their home in fear they won’t find a replacement property. Meanwhile, it is taking longer for buyers to find a home and the buyer backlog keeps growing.
Average home value appreciation year over year is typically 4% (National Association of Realtors). We’ve seen double and triple that amount in the last few years, 9%-20% each year depending on area and studies. Almost every week our list price to closed price is over 100%, meaning that homes are selling for more than they are listed for and prices keep climbing.
Let’s look at the increase in average home sale prices in Lancaster County, PA in the last three years (Bright MLS data):
August 2020 average home sale price – $260,214
August 2023 average home sale price – $350,030
So, it’s not your imagination that home prices have skyrocketed! Add on to that increased interest rates and you can see how affordability has been affected. Many buyers can afford “less” of a home than before. But don’t get discouraged!
I believe homeownership is key to building net worth and wealth. I believe real estate is a time game and it’s always a good time to buy. And today is the best day. The sooner you start the better! Just consider that in 1989 the average national home price was $94,000 and last year the average price was $386,900. Home prices aren’t going to get cheaper.
So don’t be afraid of this housing market! It just takes the right strategy whether you are doing the double transaction of buying/selling to upgrade your home, or you’re buying your first home. Today is always the best day to buy a home.
How can I help you buy or sell? Let’s talk!