Lancaster’s Real Estate Market Improves

The gap between the 2008 and 2009 real estate markets in Lancaster County is down to a razor’s edge.  On Wednesday of this week, the front page of the Intelligencer Journal ran the following story:

Market Here For Housing Gets Better ¹

Numbers for pending home sales improve

The housing market in Lancaster County continued to rebound in May, creeping ever closer to 2008′s level, local Realtors reported Tuesday.

The number of pending home sales here was down only 2.5 percent from the May 2008 figure, the smallest gap so far this year, according to the Lancaster County Association of Realtors.

LCAR said the market is starting to “heal from the bottom up,” with homes priced between $100,001 and $200,000 — a price range dominated by first-time buyers — actually up 5.6 percent from last year.

“There’s a marked feeling of optimism in our industry as we continue to see positive signs that the housing market is improving,” said LCAR president Scott Ulrich in a prepared statement.

“We’re anticipating sustained improvement as the year progresses.”

During the initial two months of the year, pending home sales trailed the 2008 level by more than 26 percent.

But as the year has progressed, that margin has narrowed.

Nationwide figures for May released by the National Association of Realtors last week showed the same trend.

Fueling the improvement, economists and Realtors agree, are affordable home prices, low mortgage rates and the $8,000 tax credit for first-time home buyers.

Taking a closer look at the local market, the 2.5 percent decline was the result of 471 pending home sales in May, down from 483 in May 2008.

The entry-level price range, the biggest category, performed best by far. It grew to 246 from 233.

But the second-biggest category — homes priced between $200,001 and $300,000 — also did pretty well. It was down only 2.4 percent, to 124 pending home sales from May 2008′s 127.

Seeing double-digit declines, however, were the lowest-priced and highest-priced categories.

Pending sales of homes priced at $100,000 or less tumbled 20.3 percent, to 51 from 64 in May 2008.

At the other end of the spectrum, pending sales of homes costing $300,001 and higher dropped 15.3 percent, to 50 from 59 in May 2008, the LCAR report showed.

The pending home sales figure measures the number of homes that went under contract, or under agreement, that month.

This figure is considered a more current indicator of the market’s health than settled sales.

That’s because settlement, when a purchase is finalized, typically happens a month or two after a home goes under contract. Most, but not all, sales agreements get settled.

LCAR’s Tuesday report marked the first time the local Realtors group provided the pending home sale numbers for the county. For years, LCAR released just the settled sales.

An LCAR spokeswoman said the organization released the pending home sales data to provide a more accurate gauge of the market. It continues to release numbers on settled sales, too.

Settled home sales show a local market that’s farther behind the 2008 mark. The county saw 415 settled home sales in May, down 12.3 percent from 473 a year ago.

The median price for the settled home sales in May was $172,500, slightly higher than the $172,000 in May 2008.

My monthly analysis of Lancaster’s real estate market posted in my Market Info tab, has shown similar results and corroborates this story.  As the dog days of Summer approach, we’ll see if this momentum continues unabated.  Stay tuned.

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¹ Mekeel, Tim. “Market Here For Housing Gets Better.” LancasterOnline.com 8 July 2009. Intelligencer Journal. 10 July 2009 <http://articles.lancasteronline.com/local/4/239608>.

Related articles of interest:

• Housing Sector ‘No Longer in Freefall’: 5 Things You Need to Know (usnews.com)
• Home sales climb, but at a sluggish pace (msnbc.msn.com)
• Home sales, construction spending stabilize (bizjournals.com)
• Explaining how home prices are measured (seattletimes.nwsource.com)