I referred her to a great agent, an offer was made, which was ultimately accepted by the seller.

Just after her offer was accepted, the July sales figures for the national real estate market were released. 

My friend emailed me, and asked my thoughts about whether it was appropriate for her sister to be buying a house, given the recent news.

Here was my answer to her.

I will chime in with my thoughts about the real estate market.  I am not able to comment specifically on the house your sister is buying, because I don’t know that market.  I do trust your sisters realtor’s  judgment and knowledge, though.

The recent housing market stats was not at all unexpected.  Everyone knew that the sales activity would plummet following the expiration of the tax credit.  We saw the same thing when it originally expired in November.  Many experts felt that the tax credit basically just accelerated sales activity, so that people ended up buying sooner than they would have otherwise bought.

I can tell you that in Lower Makefield Township, unit sales are ahead of last year, as of the end of July, by 43.5%, which is incredible.  Bucks County as a whole, is up by more than 11%, in the number of units that have sold through the end of July. 

If you just compare the number of houses that have sold in Lower Makefield in July of 2009, compared with July of 2010, there was a sharp decline, which is what the national report indicated.  34 homes sold in Lower Makefield in July, last year, compared with 24 in July this year.  Again, using Lower Makefield as an example, comparing what happened in June 2010, with June 2009, 57 homes sold this June, compared with 31 last June. 

So what does all that mean?  Well, there is no question that we are still in the midst of a very strong, buyers market.  We consider a market to be balanced when there is about a 6 month supply of houses.  In our area, although it varies by community, most areas have a minimum of 9 months or more of houses on the market.  As a generalization, in Bucks County, buyers are achieving a discount of around 7% off of the asking price.  However, in our area, I have seen recent examples of homes that attracted multiple offers, and actually sold higher than their asking price, even in the current market.  I was involved with a transaction on a short sale, where there were actually 5 offers, and the house ended up selling for thousands of dollars over the banks asking price.

I mention that, because in the case of the house that your sister is buying, if the bank has priced the property very competitively, then it is not totally out of the question to pay the asking price.  That’s where I would defer to the expert who really knows the market in Flemington.  In addition, your sister’s lender will require a formal appraisal.  They are tougher than ever, right now, and if the house does not appraise for at least the sale price, she will have the right to not buy the house.  I can explain all of that, if you are not familiar with how that works.

I realize that given the current market, every buyer worries about whether it makes any sense to buy right now.  There was a great article in either the New York Times or Wall Street Journal yesterday, and I apologize because I can’t recall which paper I read it in, that talked about the fact that buyers are getting back to much more traditional reasons for buying homes.  The concept of having a house become a wildly appreciating asset, is a relatively new  thought and concept.  People seem to be going back to the idea that you buy a house because its where you will be comfortable, and where you wish to live, etc.  I also think its worth noting that although there is still a great deal of uncertainty in the real estate market, interest rates are virtually at all time lows.  It is hard for me to envision any scenario where rates can drop much lower.  That means that from a cash management perspective, even if values dropped somewhat in the short term, if rates increase, your probably better off buying now, when rates are as low as they are. 

Although I don’t have a crystal ball, my own belief is that we are closer to the bottom than we have been in a while.  It is also true that the entire corridor between Philly and New York, has still held up much better than many other parts of the country.  2 of my 3 kids have bought houses in the past 6 months or so, and if I didn’t think it was an appropriate time, I certainly would  have told them. 

So, the bottom line is, no one knows for sure what is going to happen in the real estate market.  Yardley, Newtown, and the rest of Bucks County, is a great place to live.  There are a lot more options if you are looking to buy than rent.  I think that sellers are gradually becoming more realistic, and homes that are priced  correctly, still sell. 

If you are buying a house becuase it fits your lifestyle, in terms of size, location and community, as I told my kids, I would say, go for it!

Lets look at some numbers.

Inventory of homes on the market in Upper Makefield Township.

• Homes for sale, end of July, 2010                  141
• Homes for sale, end of July, 2009                 134
• Homes for sale, end of June, 2010                138

Inventory of homes on the market, is up by 5.2% from last year at the same time, and up just slightly from the end of June.

Average price of homes on the market in Upper Makefield Township

• The average price of a house for sale in Upper Makefield Township, at the end of July, 2010 was $1.27 million.
• The average price of a house for sale in Upper Makefield Township, at the end of July, 2009 was $1.39 million.
• This represents a reduction in the average price of a home on the market of 1.9%. 

What is amazing about that statistic, is that the average price of a house that has sold in Upper Makefield, as of the end of July this year, was $849,000.  This represents an enormous difference.  Think about that.  The average asking price is $1.27 million, but the average selling price is $849,000.  The reason for this, is that there are a great number of houses on the market in Upper Makefield, that are more than a million dollars.  Relative to the number of homes that actually sell, the inventory of houses on the market that are above a million, actually skew the average asking price.  Those homes, tend to remain on the market, which also skews the average days on the market, and are much more difficult to sell, than more modestly priced homes.  The same is essentially true in every community, in that the most expensive range of homes in any community, tend to be the most challenging to sell.

Real estate sales volume in Upper Makefield Township.

• Homes sold in Upper Makefield Township as of the end of July, 2010          61  at 90% of the asking price.
• Homes sold in Upper Makefield Township as of the end of July, 2009          38 at 87% of the asking price.

This represents an incredible 60.5% increase in unit volume over a year ago.  In addition, although buyers are still achieving, on average 10% off the asking price, that number compared with 13% last year at the same time.

Summary of real estate market through the end of July, 2010 in Upper Makefield Township, Bucks County, Pa.

So, what does all of this mean?  Inventory levels are up a bit, from last year, but unit sales are up tremendously.  However, at the current sales pace, there is a 17.8 month supply of homes on the market.  This compared with 22.3 months last year, at the same time, so conditions would appear to be improving a bit.  However, please keep in mind, that we consider the market to be balanced between buyers and sellers, when the inventory level approaches 6 months.  Clearly there is a long way to go, before we get back to balanced market conditions.

In addition, almost half of the homes currently on the market (67 of 141 to be exact) are priced about $1 million.  That represents a whopping 37 month supply of houses above a million, at the current sales pace.  It should be pretty clear, especially in the higher priced market, that homes absolutely must be priced correctly, based on current market conditions, in order to sell.  It has never been more important, if you are selling, to price correctly, and market as aggressively as possible.

If you would like to know what homes in your neighborhood are selling for, please ask me for my neighborhood sales report.  You can email me, and I will forward the report immediately.

I Wanted to provide a detailed look at the Bucks County real estate market, in general, and some specifics for local markets that I cover. These statistics are taken directly from Coldwell Banker Hearthside Realtors market research derived from Trend MLS data.

Average For all of Bucks County,

note the following for units that have sold as of the end of July, 2010

2009                                  2010

2554                                  2845                +11.4%

Houses in Inventory for Bucks County as of end of July, 2010

4593                                  4634                  Up less than 1%

Average price of a house in inventory for Bucks County:

$495,000                           487,000            -1.7%

Average sold price:

$329,000                            342,000             +3.9%

Countywide discount from the asking price is 8%

For the entire County, the average days on the market for a home, is 86.

   
It is interesting to note, the huge difference between the average price of a home in inventory, and the average price of a house that actually sells.  Currently in Bucks County, the difference is 487,000, which is the average price of a home in inventory, compared with 342,000 which is the average price of a house that has sold.

The reason for this, and it is true within individual communities, is that the houses that are the most expensive in any area, skew the average price of homes on the market, and are typically the most difficult to sell.  

We see examples of this in individual municipalities as well.

Lets look at real estate specifics for Lower Makefield Township and Yardley, for now.  Keep in mind the Bucks County wide statistics, as we look at individual markets.  In future posts, I will review  statistics from Newtown, Upper Makefield and other areas in which I work.

Inventory of Homes in Yardley/Lower Makefield

July 2010             223
June 2010           238
July 2009            251.

Number of homes in inventory, is down 11.2% from the previous year, and down 6.3% from June, 2010.

Average Pricing in Yardley/Lower Makefield for homes on the market.

Average price of a home for sale in July, 2010 was $520,000.
Average price of a home for sale in July 2009 was $522,000.

Asking price of homes in inventory is flat, down just 0,2% from last year.

Average Pricing in Yardley/Lower Makefield for homes sold

Average price of a house that has actually sold in Yardley/Lower Makefield Township is 414,000, as of the end of July, 2010.

The average price of a house that sold last year, was 462,000.

This is an interesting observation.  The average price of a house for sale in Lower Makefield Township and Yardley, is 520,000, but the average price of what actually sells, is 414,000.  This represents a large difference, and I believe what we are seeing is that the more expensive homes on the market, skew the average price of inventory, and since they don’t sell as often, they don’t have the same affect on the average price of what sells.

Unit Sales of homes in Yardley/Lower Makefield Township.

131 homes sold through the end of July, 2009 at 91% of the asking price.
188 homes sold through the end of July, 2010 at 93% of the asking price.

This represents a very impressive increase in unit sales volume of 43.5% over the previous year to date.  In 2009, sales volume increased by 1.6% overe the previous year.

Please note that buyers are still achieving an average of 7% off of the asking price.

Summary

So what does all of this mean for buyers and sellers as well as home owners, in Yardley and Lower Makefield Township?  Since there is still an 8.6 month inventory of homes on the market, and since buyers are still seeing pretty significant discounts from the asking prices, it is clear that factors still favor buyers in the Yardley, Lower Makefield Township area.  In addition, average days on the market are up slightly, from 73 days last year, to 78 this year.  Competition remains challenging.  Be sure to check out the graphs and charts, that show what all of these numbers mean.  The table that shows yearly appreciation is particularly intersting.

All things considered, the real estate market in Yardley , and Lower Makefield , continues to perform better than in many other parts of the country.  As I mentioned, in future posts, I will look at the real estate market in Newtown, and Upper Makefield, as well as in other parts of Bucks County.

I always welcome your thoughts, comments and questions.  You can reach me at 215-510-1399.

Newtown house inventory vs days on the market

We are definitely in the dog days of summer, here in Bucks County.

I just got back from a very nice, long weekend in Chicago. 

For today’s post, lets look at a couple of charts that show inventory and average days on the market for homes in Yardley and Newtown.

What do the charts show?

Basically, in both Newtown and Yardley, the average days on the market has been trending lower, for the past 90 days.

In Yardley, the number of houses on the market seems to have peaked in early July, and is now trending lower.  It will be interesting to see what happens in the fall, which contrary to what a lot of people think, is actually the second busiest real estate time of the year, after the spring market.

In Newtown, inventory appears to still be on the upward trend. 

I suspect, in both Yardley and Newtown, we are seeing homes coming on the market, but there are still not a great deal of buyers.  Becuase of the new listings, the average days on the market, is a bit lower.  This all translates to market dynamics that still favor buyers.

Although interest rates are at unbelievably low rates, and show no signs of increasing in the near future,  in my view, the pace of sales has slowed down since the spring, which is normal, for this time of the year.

Yardley homes on the market vs days on the market

So, if you are looking to sell, price your home realistically.  Houses are selling, but only those that are priced competitively.

Buyers, lots of choices, and lots of competition for your dollars.

If you need an evaluation of the value of your home, please call me at 215-519-1399.

Gorgeous home in the Estates of Timberly Farms, in Plumstead Township, Bucks County, Pa.  Priced at 565,000, the house is only 5 years old, and shows beautifully.  Enjoy walking trails through the woods, a wonderful country feel, yet just minutes from Doylestown and all that Bucks County has to offer.

To schedule a  private showing, call 215-519-1399.

Check out this house.

I found this article on a great website, called House Logic. The site is defintely worth checking out. There are dozens and dozens of great articles that pertain to real estate. Today, lets look at 12 common home maintenance clues, and solutions.

Your house sometimes acts as if it’s alive—making strange sounds, emitting odd odors, and giving visual cues that say something might be amiss. Often, these are signs of home maintenance issues that need to be addressed, and decoding these sometimes puzzling clues could prevent minor problems from turning into major home repairs.

Here’s how to interpret what your house is trying to tell you, and how to recognize the early warnings of common home

Peeling exterior paint

Cause: Moisture is probably getting underneath the paint, perhaps from a leaking gutter overhead or from a steamy bathroom on the other side of the wall.

Cure: If you catch the problem right away, you might just need to address the moisture issue and then scrape off the loose paint, prime bare spots, and repaint that wall, for a total of a few hundred to a couple thousand dollars. Delay too long and the siding might rot. Patching and repainting the whole house might cost $10,000.

To prevent a chronically steamy bathroom, consider installing a new ventilation fan with a humidity-sensing switch that automatically exhausts moisture-laden air. Cost is about $250.

Flickering lights

Cause: If only a single bulb flickers, it might be loose in its socket or in need of replacement. If lights always dim when the refrigerator or other appliance turns on, the circuit might be overloaded. If groups of lights flicker, connections at the electrical panel or elsewhere might be loose, causing power to arc—or jump—over the gaps. Arcing is a serious problem; it starts fires.

Cure: Anyone can tighten a bulb. Handy homeowners can shut off circuits and tighten loose connections within switch boxes. If you’re not comfortable doing that, or if you suspect an overloaded circuit or loose connection at the panel box, call in a licensed electrician. You’ll pay $150 to $250 for a new circuit, and $500 to $700 for a new electrical panel—way less than what you’d spend to recover from a fire.

Rustling in a wall

Cause: Sure, termites usually signal their presence by building pencil-thick mud tubes up from the ground or by swarming from pinholes in floors or walls. But did you know it’s also possible to detect them by sound? Tap on a wall and then press an ear against it. See if you hear rustling that matches recordings of Formosan or other termites. A sound like crinkling cellophane could mean carpenter ants.

Cure: Call a pest-control professional. Cost is $65 to $100 for an inspection.

Loud knocking

Cause: If the knocking occurs when you turn off water, you have “water hammer,” caused when fast-moving water comes to a sudden stop and there is no air chamber (a short, specially designed piece of pipe) to cushion the shock wave. If knocking occurs when your furnace switches on or off, metal ducts are expanding or contracting as temperature changes.

Cure: If water pipes are the issue and there is an air chamber near the faucet, it may be filled with water and needs to be drained. You might be able to do this yourself. If you’re not confident of tackling that or if there is no chamber, call a plumber ($65 an hour) to add one. Those snapping ducts? Just get used to them.

A toilet tank that refills all on its own

Cause: Worn interior parts may be causing water to trickle through the toilet constantly, causing the water level in the tank to lower and eventually triggering the refill mechanism. A leaky toilet potentially wastes 1,500 gallons a month.

Cure: Untangle or loosen the chain—it may be too tight and preventing the flapper from seating fully, letting water leak out the flush valve. Or, try bending the tube connected to the float ball. If those don’t work, replace the valve and flapper inside the toilet tank (under $25 if you do it yourself, and a little more if you upgrade to a water-saving dual-flush valve).

Creaks and groans

Cause: All houses creak and groan a little as parts expand and contract with temperature fluctuations and with changes in levels of humidity.

Cure: None—it’s normal for house to make a few snaps and pops. But don’t ignore really loud groans when there’s been an unusual amount of snow or rain, especially if your house has a flat roof. There may be an excessive or even dangerous amount of weight on your roof. If you suspect that may be the case, be prudent: Get everyone out of the house and call in a professional to check the roof.

Musty odors

Cause: Mildew, a fungus, is growing because indoor air is humid enough to allow condensation to form on cold surfaces. Basements are favorite haunts for mildew.

Cure: Keep surfaces dry by one or more strategies: increase air movement with a $20 fan, keep relative humidity below 50% in summer or 40% in winter with a $175 dehumidifier, or make surfaces warmer by adding insulation.

Rotten-egg smell when you run water

Cause: Bacteria that produce hydrogen sulfide gas (the scientific name for “rotten egg smell”) are in your plumbing, or there is a problem with your water heater. Fill a glass with hot water, step away from the sink, and take a whiff; if you detect no sulfur smell, they’re in the drain.

Cure: Disinfect the drain by pouring in a $1 bottle of 3% hydrogen peroxide solution, sold at drug stores. A sulfur smell in only hot water points to the water heater as the problem; call a plumber to disinfect the system or replace the tank’s magnesium anode. If hot and cold water both smell, call your water supplier (or health department if you have a well).

Strange-tasting tap water

Cause: Mineral content of drinking water varies, so taste does too. But if the water tastes metallic, iron or copper may be leaching from pipes. If you taste chlorine, your water supplier may have overdosed on disinfectant, or a correct level could be interacting with organic material within your plumbing system.

Cure: If chlorine seems high at all taps, or if you taste metals, call your water supplier or have your well water tested. If only one tap has water with high chlorine or if the taste goes away after you run water for a few minutes, flush your system or call a plumber.

An under-the-counter water purifier with a top-quality activated carbon filter will remove heavy metals, bacteria, and other contaminants. In addition, it removes odors and bad tastes. Expect to pay $150 to $200 for a purifier with a replaceable cartridge.

Sour milk

Cause: With today’s hyper-pasteurized dairy products, milk doesn’t sour easily. So if it or other refrigerated food spoils unusually fast, the temperature in your refrigerator could be too high.

Cure: Get an $8 refrigerator thermometer and adjust the control so on each shelf stays below 40 degrees. If you can’t achieve this, consider buying a new Energy Star-rated refrigerator. Fridges are pricey, $450 to $2,000 or more, but you’ll save energy as well as food and might qualify for rebates.

Trembling floors

Cause: If items on tables and shelve jiggle and shimmy when you walk past, or if your floor feels like it gives under your weight, the floor joists might not be sturdy enough or past remodeling might have removed a support wall.

Cure: Have a structural engineer or experienced contractor see whether you can add more joists, bolster existing ones with an additional layer of plywood subflooring, or add a post to support the floor better. You’ll pay up to $500 for a structural engineer to evaluate your problem.

Mysterious breezes

Cause: If a ground-floor room seems drafty, air may be seeping in along the foundation or through an improperly sealed window or door. A drafty attic can make things worse, as warm air currents will rise naturally and exit through any gaps in the attic, pulling colder air in through lower-level cracks.

Cure: Starting in the attic and working your way down, seal all gaps.

Upper Makefield Township is interesting, because it represents one of the more expensive real estate communities in Bucks County, and also, in general has the fewest number of transactions. As a result, sometimes the numbers can be skewed.

Inventory of homes for sale, as of the end of June, 2010 was 138
Inventory of homes for sale, as of the end of May, 2010 was 141
Inventory of homes for sale, as of the end of June, 2009 was 132.

Inventory is fairly stable, both month to month, as well as compared with the same time last year.

Average price of a home for sale at the end of June, 2010 was 1.24 million.
Average price of a home for sale at the end of June, 2009 was 1.32 million.

List price in inventory is down by 5.5%. However, this is where the numbers can get a bit skewed by the number of houses that are for sale above 1.3 million.

Sales data:

47 Homes have sold, through June, 2010 at 90% of original asking price.
30 Homes sold through the end of June, 2009 at 87% of original asking price.

This really represents a large increase in the activity level, for Upper Makefield Township real estate. Sales volume is up by more than 56% from last year, at the same time.

Additional observations: At the current sale pace, there still remains an 18.6 month supply of homes in inventory. This compares with 22 months a year ago, so factors have improved, although we still remain in a strong, buyers market in Upper Township and Washington Crossing.

The other interesting observation is that during 2009, most (82%) of the homes sold in Upper Makefield Township, sold for less than a million. Currently, 49% of the homes (68 of 138) on the market are priced above 1 million. This represents a 38 month supply at current sales pace for homes priced above a million. As bad as that sounds, it actually represents a significant improvement for more expensive homes in Upper Makefield.

As always, it is critical to price your home realistically, if you want to sell.

I can offer a very detailed report, that will show you homes that are active, pending and sold, within about a 5 mile radius of your home, in any area I serve. It is an extremely detailed report. If you would like to receive the report, please email me. Marty@martinmillner.com

Some observations, Bucks County wide real estate, first.

• Through June, sold/closed units is positive, compared with last year, in 7 of 8 of our principal markets, as well as for all of Bucks County.
• County wide the increase was 22.9%
• Real estate prices were actually up by 5.2%, through the first half of the year, for the entire County.  Refer to the chart, to see how each municipality did.
• For all of Bucks County, the pricing momentum actually declined from May.  It went from a 6.8% increase in May to June’s 5.2%
• The best forward looking indicator we have, is pending sales.  Probably due to the expiring tax credit this June, pending sales for Bucks County, was down 32%, compared with June of last year.  Surprisingly, it was 4 % higher than at the end of May.
• Inventory of homes, is higher now, than it was at the end of May, County wide.  However, compared with June, last year, inventory levels are down, County wide.
• Bucks County wide, there remains a 10.5 month supply of homes on the market, which is better than it was last year, at the same time, but still indicating a strong, buyers market.
• Average days on the market, remains higher in most markets, than last year.
• Average list price of homes in inventory, at the end of June, for the County, was down just slightly from last year. (-0.8%)
• Discounts off of the asking price, are actually showing an improving trend.  Overall, buyers are achieving approximately a 7% discount from the opening list price of the current listing contract.

Each of the real estate markets that I cover, performs differently.  Lets look at real estate in Lower Makefield & Yardley, for now.  I will review Upper Makefield Township, Newtown, Northampton, and others, in furture posts.

Lower Makefield Township, Yardley real estate observations.

• Inventory of homes for sale in June 2010 was 238
• Inventory of homes for sale in May 2010 was 223
• Inventory of homes for sale in June, 2009 was 253.
• Average price of a home for sale in June 2010 was $514,000.
• Average price of a home for sale in June 2009 was $526,000.
• 163 Homes sold through June of 2010, at 93% of the asking price.
• 97 Homes sold through June of 2009, at 91% of the asking price.

There remains an 8.9 month supply of homes on the market, in Lower Makefield Township.  Since we consider a balanced market to exist, when there is about a 6 month supply of houses, conditions still favor buyers.

Average days on the market are now 79 compared with 70 last year at this time.  Competition remains a challenge to sellers.  Now, more than ever, it is critical to price homes correctly and market aggressively, if you are to sell.

As always, I welcome your thoughts and comments, and I will post additional details on other communities, in future posts.