By Peter Becker
The fourth quarter report from the Pike Wayne Association of Realtors for 2012 give evidence of an upward economic trend, with increased pending sales and median sale prices.
Released by Janet Gallagher, Association Executive Director, the report summary states, "It was largely a year of recovery for housing across our nation. Markets resolved to shed their excess weight, appeal to both existing homeowners and renters alike, and learn to play nicer with banks. Hey, three for three isn’t too bad. But there’s more work to be done."
Here’s how the final month of 2012 finished up:
• New listings decreased 129 percent to 507.
• Pending sales were up 15.5 percent to 343.
• Inventory levels shrank 18.6 percent to 1,763 units.
• Prices rallied higher. The Median Sales Price increased 5.2 percent to $139,450.
• Days on market was up 7.1 percent to 167 days.
• Absorption rates improved as month's supply of inventory was down 33.6 percent to 14.0 months.
Coulby Dunn, President of the Association, said that while "we're not even close to the historic highs of 2006 or 2007," even small improvements are good. At this time, he said, they are finally approaching a time when it is both a good market for the buyer and the seller.
For years the real estate market favored the buyer who could get a home for lower prices, and the interest rates were low. Now they are in a transitional phase where sellers are happy to finally seeing their homes sell.
Unlike a suburban real estate market where the market tends to rise and decline rapidly, Dunn said that the market fluctuations last longer in the Poconos.
The Pike Wayne Association of Realtors represents approximately 400 members. Dunn said that they have heard a lot of optimism from realtors in the organization. He said a good indicator is to look at the real estate transfer tax report provided each month at the Wallenpaupack School Board meetings. For years, revenue from the 1/2 percent tax on real estate transactions has been declining; finally, it is starting to rise.
The Poconos, Dunn reflected, continue to be a wonderful place to buy a home. The trend has been to move from the city to live here permanently, rather than to merely have a vacation home. The devastation to the New Jersey coast from Hurricane Sandy turned to benefit the Pocono real estate market.
The average home on Long Island sells for $550,000, Dunn said; the same home in Pike or Wayne County may sell for $150,000 to $200,000 with taxes a third of what they are in Long Island, he pointed out.
Good school systems, lower taxes and quality of life are among the star attractions of living here, said Dunn.
Page 2 of 3 - "Economic growth is on an upward trend and several prominent housing indices continue to showcase market turnaround," the report summary states. "Momentum is on our side, though it won’t be necessarily be fast, consistent or universal. But after five or six challenging years, it’s a welcomed change of pace."
The figures reflect residential real estate activity in the counties of Pike and Wayne, comprised of single-family properties, town homes and condominiums combined. Percent changes are calculated using rounded figures.
A bar graph for new listings show that in the last three months of 2012, there were 507 properties listed for sale in Wayne and Pike, the lowest in four years for that quarter. In 2011, fourth quarter, there were 582 properties on the market. The total for the year was 3,257, also the lowest it has been since 2009. In 2011 the total was 3,381.
"Pending Sales" is the most real-time measure possible for home buyer activity, as it measures signed contracts on sales rather than the actual closed sale which can occur up to several quarters later. As such, it is called a "leading indicator" of buyer demand when compared to Closed Sales.
The graph shows that pending sales totaled 343 in the fourth quarter 2012, up 15.5% over the same quarter in 2011. This was the most in four years. For year-to-date, pending sales in Pike and Wayne totaled 1,505, up 22.0% over the prior year and the highest in four years.
The number of closed sales was also highest in the fourth quarter over the same period in the last four year, and the entire year of 2012 came out on top. There were 418 closed sales in the last quarter of 2012, up 26.7% over the previous year fourth quarter. For the entire year, there were 1,455 closed sales, an increase of 20.1% over the prior year when there were 1,211.
Days on Market
Properties, however, stayed on the sales market for slightly longer periods. For the fourth quarter 2012, properties were on average, 167 days on the market, a 7.1% increase compared to the last quarter of 2011and the most in four years. The same was true for the total year; in 2012 the figure was 169 days, a 3.0% increase from 2011 and the most in four years.
Median Sales Price
The Median Sales Price was up 5.2% comparing the fourth quarter of 2012 ($139,450) with the fourth quarter of 2011 ($132,500). This was also the highest quarter for the entire year.
The Median Sales Price for the entire year of 2012, however, was $129,000, which was down 6.5% from the prior year ($137,900) and the lowest in four years.
Average Sales Price
The Average Sales Price followed the same trends as the Median Sales Price. The rate for the fourth quarter 2012 was $171,010, up 6.5% compared to the fourth quarter of 2011 ($160,613). This was the most for all quarters of 2012.
Page 3 of 3 - The Average Sales Price for all of 2012 was $161,192, a 1.9% decrease from the prior year ($164,298) and the lowest in four years.
Original List Price Received
The percent of original list price received was slightly better than before. The rate for the fourth quarter 2012 was 85.6%, up 2.5% compared to the fourth quarter 2011. For the year-to-date, the rate was 85.7%, up 0.5% from the prior year.
Housing Affordability Index
The Housing Affordability Index measures housing affordability for the region. An index of 120 means the median household income is 120% of what is necessary to qualify for the median-priced home under prevailing interest rates. A higher number means greater affordability.
For the fourth quarter 2012, the rate was 199, up 2.6% from fourth quarter 2011 and the most in four years. For the entire year of 2012 the rate was 211, a 12.2% jump from the prior year and also the greatest in four years.
Inventory of Homes for Sale
There are less homes on the market than there have been. During the fourth quarter 2012, there were 1,763 homes for sale, a decrease of 18.6% compared to the fourth quarter of 2011, when the inventory reached a peak of 2,166, since the fourth quarter 2009 (when it was 1,925).
The Month's Supply of Inventory is the inventory of homes for sale at the end of a given quarter, divided by the average monthly pending sales from the last 12 months.
Comparing the fourth quarter in the past four years, this measure was at its lowest, 14.0, a drop of 33.6% from the prior year.
For more information on the Pike Wayne Association of Realtors, visit www.pikewaynerealtors.org or call (570)226-2300.