Real Estate Stats for March 2012

Many people have opinions on the state of the housing market, but the easiest way to understand current and future conditions is to monitor the movements in the real estate absorption rate.  Mathematically, this is the measurement of current housing supply divided by the current rate of sales, expressed in months of supply.  A simpler way to express the definition of the real estate absorption rate is to say it is the number of months that the market will need to clear out the existing supply of homes assuming no new inventory hits the market.

So how do we put this into perspective.  Consider this: The typical home seller would like to move within two to four months of placing their home on the market, so over time, we have developed expectations in real estate and have defined situations as follows:

• Sellers Market:  1 to 5 months supply of homes – home prices increase
• Balanced Market:  6 months supply of homes – home prices are stable
• Buyers Market:  7 or more months supply of homes – home prices decrease

 

The number of homes SOLD in the Greater Harrisburg marketplace year-to-date has shown significant improvement.  Dauphin County improved significantly from last year while Cumberland Countyreflected a solid gain.  This is great news for an area that has been inundated with excess inventory for quite some time.  The one area that was perhaps the hardest hit during the economic downturn has been properties in Dauphin County over $400,000.  This sector of the housing market continues to lag behind every other price range.  Homeowners that are selling their properties in this price range need to be extremely competitive or their home will sit.  The trend of properties taking longer to sell in the Greater Harrisburg market continues with properties in both Cumberland and Dauphin Counties now taking an average of over four months to go under agreement.  Sellers need to price their homes competitively in order to attract Buyers.  Overpricing a home in this market can cause a property to linger longer and become stale.

 

Average SOLD price in the Greater Harrisburg area continues to hold its own with not much movement one way or another.  As buyers start coming back to the market (which they are) to gobble up some of the excess inventory, prices should start to stabilize and then gradually rise by the end of 2012.  This is in line with what most national prognosticators are predicting for the housing industry.

Real estate, market activity from Dauphin and Cumberland Counties, PA will be published here on, or about, the 15th of every month for the previous month.  All statistics on this page are compiled from the Central Penn Multiple Listing Service of the Greater Harrisburg Association of Realtors® and may not reflect all market activity within the geographic area.  This data does not include farms, investment properties, raw land or individual lots.  Analysis and commentary are the personal views of the author and have not been endorsed by any company or association he is affiliated with.