WARM WINTER BRINGS OUT BUYERS!

Pending properties rose sharply while prices continued to dip precariously as the Philadelphia area* real estate market moved, slowly, in the direction of a recovery.  Last year, three winter weekends were lost due to 2-foot snowstorms – this winter has been extraordinarily mild, and buyers were extraordinarily busy in February!

STATISTICS

This newsletter will compare FEB-2012 to FEB-2011 for the Philadelphia area*.  The information was gathered from the “Market Statistics” section in TREND:

Closed (Residential) Units were up 12% compared to FEB-11:  up 11% in PA, and up 15% in NJ

Closed Dollar Volume ($600 million) was up 8% compared to FEB-11:  up 7% in PA, and up 13% in NJ

Pending Properties were up 41% compared to FEB-11:  up 45% in PA, and up 31% in NJ (this bodes well for the spring!)

Distressed Properties:  20% of closed sales were distressed properties – this is a drop in percentage from 2011, but the number of distressed sales remains about the same

Days on Market for closed units increased 8% compared to FEB-11 – an average of 110 DOM for a closed property in PA, and an average of 131 DOM for a closed property in NJ

New Listings - there were approximately 8,300+ new listings in FEB-12 – the highest number of new listings in a February for 3 years; even with this increase, there are fewer properties on the market now than there were last year at the same time

TAILWINDS

Pending Properties point to an active spring.  It looks like it will be easy to beat 2011 numbers for unit sales and dollar volume.  Interest rates remain low, while FICO scores remain high!

HEADWINDS

Prices are under GREAT pressure, even with extra buyers. Inventory remains stubbornly high, and prices fell 3% in February (CHART BELOW). The average price in FEB-11 for a property in PA was $230K, and the NJ average price was 213.

INVENTORY CHECK

The numbers below represent “annualized” inventory** (see explanation below).  The suburban counties of Bucks, Montgomery and Chester are doing better than other counties as inventory levels struggle to stay below last year’s levels:

Berks County remains problematic with 9.3 months of inventory, slightly above MAR-11

Bucks County rose to 7.5 months, about ½ month less than MAR-11 – it remains better than many counties with less than 7 months of inventory in the under $300K price range

Chester County rose slightly to 7.5 months, similar to the MAR-11 level

Delaware County is troublesome with more than 9 months of inventory – it has been consistently higher than 2011 levels

Montgomery County shows improvement with approximately 7.3 months of inventory – lower than MAR-11

Philadelphia County is stabilizing, slightly above 9 months (about the same as 2011)

Burlington (NJ) County remains above 1 year (about the same as 2011)

Camden (NJ) County remains stratospheric with more than 14 months of inventory (and it stubbornly remains above last year levels)

Gloucester (NJ) County continues to improve and is now slightly under 12 months of inventory – almost 2 months below MAR-11 inventory

Mercer (NJ) County is slightly below MAR-11 with 9.8 months – strangely, the crowded segment of this county is in the under $300K range (more than 10 months) while the $700K-$1 million range has slightly above 7 months of inventory (and $300-$700 has only 8 months of inventory)

**”Annualized” Inventory - to get a similar number for the area where you have listings:  find out how many properties sold in the last 12 months and divide that by 12 (to get an average of how many properties sell per month), then unclick “Settled” and click “Active”; then, divide the number of “Active” properties by the average number of sales per month (the previous number) to get “annualized inventory.”