A Deeper Look into this Wild Market

 So this is a wild market.

Many people ask me - when do you think this will change?

As appraisers, we pay close attention to the market as it unfolds and report what we see.

So, we begin by looking at the larger market ... but then we will always need to take a more detailed look at the specific market of the property that we are appraising for our client.

As of today, I can tell you that in looking at the larger market there has been no delay in market activity and prices continue to increase across the SE Pennsylvania region as inventory remains limited.

But when we take a closer look at specific markets.... not all markets are the exactly same.

Some are seeing more extreme market reactions than others.

There are differences when comes to appraising a new construction home vs an older home..... or a detached home vs a townhouse...... or a condo...... or a home located on many acres with horse amenities.....or a home located within a conservancy...... you get where I am going with this?

Every property is a new puzzle to figure out.

So, when you ask an appraiser for stats... this is why we say... it depends...

Now, here is a more detailed look at a specific market in the graphs below.

I was working on a report in Cheltenham Township this week, which by the way, has the highest tax rates in the county.

I narrowed it down to Cheltenham Township, Montgomery County, 3-4 bedrooms, .01-.30 acre, residential, detached, fee simple, 2-2.5 stories, 1500-2300 sf gla, year built 1920-1960.

Now we have a really clear idea of what exactly is going on with sales that are comparable to the property that I was working on.

You can see that the number of new listings is increasing... but the median days on market is still currently really low - 3. .... so the supply is still not meeting the demand.

You can also see that over the last 12 months the median sale price has increased (no surprise) .... but also, look at the list to sale ratio - it's currently at 108%. Yep. Wild.

I also included a graph that shows the year over year median sale prices and list to sale ratios because this particular homeowner just bought their home in 2019 and I want to show my client more information as to why my opinion is higher than what they paid 2 years ago.

So, when will the market correct?

I don't know.

Maybe when forbearance ends?

Maybe when homeowners feel safer about having a bunch of germy people coming into their homes?

Maybe when the Fed raises the rates (which is currently projected to be not until 2023. )

But for now - in the Phila area, Sellers are continuing to receive multiple offers, much higher than market value in most cases, from Buyers who are offering to pay the difference in the appraised value and the sale price, waiving all inspections, paying the seller's closing costs, paying for Sellers moving expenses, paying for the Sellers new furniture in their new home, allowing Sellers to stay in the home after settlement for Free...... the list goes on.....

When we say this market is wild, we are not exaggerating. At all.

It's a very tough time for Buyers and also for the Realtors who are working so hard, writing offer after offer in hopes to eventually get their client in a home they love.

We, as appraisers are working even longer hours for each report that we are completing in order to be sure that our time adjustments are accurate, making sure we haven't missed any important details and doing our best to explain our reasoning for our opinion of estimated market value.

So, if you are a Seller - I am happy for you.

If you are a Buyer - I hope you find that dream home at a cost that you do not regret.

And if you are a Realtor - I am always happy to help answer any questions that will help you to do your superhero job 😃