An ongoing drought in home inventory, high interest rates and ravenous demand have spawned a housing market where sellers are often flooded with offers, and buyers may be forced to make concessions to secure a home.
That’s the consensus of real estate agents in Berks County and the tri-county area, who were asked by MediaNews Group about what buyers and sellers can expect from this year’s housing market.
“Homes with realistic listing prices are selling in days, for at or above what they’re listed for,” said Meredith Jacks, co-owner of Styer Real Estate, South Coventry Township, Chester County, “(buyers) are trying desperately to get in a home.”
Jacks said that in the Owen J. Roberts school district and surrounding areas, home closings are down 30% since last year due to dwindling inventory.
“In the same districts, we went from about 830 homes sold in the first three-and-a-half months of last year to 600 homes sold this year,” Jacks said.
Inventory has shrunk similarly since last year in Berks County, according to Bright MLS data, which shows a 26% decrease in closed sales between the fourth quarters of 2021 and 2022, and a 30% decrease in the number of homes for sale.
High interest rates may also limit options for homebuyers, Jacks noted.
“Interest rates have more than doubled since 2021,” Jacks said. “So what people used to be able to afford, it’s kind of a sticker shock to see what they can afford now … I do see first-time homebuyers starting to get priced out of this market.”
Market conditions today are a stark contrast to what they were a decade ago, according to Katie Broskey, of Keller Williams Platinum Realty, Wyomissing.
“When I got my real estate license in 2014, the standard days on the market in Berks County ranged from 50 to 70 days,” Broskey said. “Now in 2023, the day that house lists, you need to very often put that offer in the same day.”
Broskey said an abundance of offers can give sellers the power to dictate certain terms.
“When there’s 10 or 20 offers on a home, a lot of times the buyer will buy the property as is, over asking price, or offer to pay some of the seller’s fees, like the transfer tax fee,” Broskey said. “But the buyer has to have cash to be able to do some of those things.”
For non-cash buyers, Broskey said getting pre-qualified with a local mortgage lender can mean the difference between a failed offer and a new home.
“Usually local lenders are going to have the best rates, the best programs, you can go to their office, call them, text them,” Broskey said. “If there are four or five offers that are basically identical, a lot of times it will come down to who the mortgage lender is, because (sellers) want to have that smooth deal.”
Jacks noted that establishing a good relationship with a trustworthy lender can put buyers in touch with grants that make them more competitive in a fierce market.
Getting pre-approved for a mortgage can also give buyers the edge, said Terese Brittingham, broker and owner with Keller Williams Realty Group, Collegeville, Montgomery County.
Brittingham noted that the marketplace for first time homebuyers is especially competitive, and securing a home takes patience, realistic expectations, and a tailored approach.
She said buyers of in-demand properties may find success with strategies that create a more solid offer, like doing inspections before making an offer, waiving inspections in favor of a home warranty, or waiving appraisal contingencies for an agreement that the seller covers the difference between purchase price and appraised value.
Building relationships with buyers to fully understand their needs and capabilities is essential, according to Daryl Tillman, owner of Daryl Tillman Realty Group, Wyomissing.
“There are a lot of things we can do to make the offer more appealing once we know what the consumer is capable of financially,” Tillman said.