Explosion aftermath resources

Apr. 18—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," Broseky 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.

Jacks agreed.

"I think it's super important that buyers work with educated agents that understand the market," Jacks noted, "It's our responsibility to ground buyers in understanding what the current value really is, because sometimes houses aren't priced properly, and (realtors) can manipulate the offer to make it make sense for the buyer."

Broskey said that while the market is tough, buyers shouldn't give up easily.

"I always tell my buyers that the house that's meant to be will happen," Broskey said. "So maybe it's the first offer, or maybe it's house number 10 ... I've had very strong buyers that it just takes us a couple tries to find that house."

While sellers have the advantage in a high-demand, low-supply market, there are still steps they can take to maximize offers, according to Seth Lejeune, team leader with the Seth Lejeune Group, Upper Providence Township, Montgomery County.

He said getting as much exposure to the property as possible is key, even in a sellers' market.

"That means still doing an open house," Lejeune said. "Basically what I tell my sellers is a month of activity is going to be shoved into a weekend, the number of showings, the amount of correspondence ... by allowing as many people as possible to come through and see the property ... (sellers) will know they've got the best offer."

Tillman said the best option for sellers is to make the home as stunning as possible.

"If you defer maintenance, you could lose a substantial amount of money because (the home) isn't presenting itself as well as it could," Tillman said.

Brittingham said it's worth it for sellers to buy a new property as well, because the uptick in pricing offsets the increase in interest rates.

Such a rapid increase in home value is unprecedented, Tillman said, and it's impossible to predict where exactly the market will go in the long term.

"We don't normally see this much equity built into homes in this short of a time," Tillman said, "What that does is allow people to borrow off their homes, in some cases, to survive."

He said large amounts of people taking out home equity loans could cause hardship in the future.

"God forbid the wife, or the husband lose their job, now they have not just their mortgage but a home equity line of credit, that's where you'll see a good amount of short sales start, and that gets us right into foreclosures," Tillman said.

To avoid such scenarios, Tillman advised that buyers try their best to save as much money as possible, so they're not overextended when they make the purchase.

"Some things that happen in this industry are far beyond what we've seen before," Tillman noted, "Obviously what goes up does come down, it's just, how bad is it gonna hit us."