Local Market Report for Franklin County PA - October 2011

For all number crunchers out there, here's what happened in Chambersburg and Franklin County, PA during September 2011. Basically, the positive trends of the past few months continued in September, adding weight to the argument that the real estate market in Franklin County is recovering, albeit slowly.

The number of homes sold in September, 120, was up 20% from a year ago, and the dollar volume of sales was up by nearly 17% to $19.7 million for the month. New listings were up modestly versus September 2010, but the number of active listings was down 11.3% to a 9.1 month supply at the current rate of sales. This is a big improvement compared with last year at this time, when over a year's supply of homes clogged the market.

Total pendings (homes under contract but not yet sold), which had been up smartly for several months, slowed down in September to 181, six fewer than in September 2010. New pendings were flat. Average days-on-market was 130 in September, in line with the five-year average and down from the high of 150 days a year ago. The market is still anemic, so one wouldn't expect these bits of good news to show up in firmer prices. Sure enough, the median sold price, at $151,200, was down 3.7% from September 2010--but at least it was up 6.9% from a month before.

As usual, people selling upper-brackets homes for this market need to understand the power of patience. In September 2011, the number of MLS-listed homes priced above $500,000 was 33. The number sold was...zero, nada, none. Two houses sold between $400,000 and $499,999 (of 20 on offer), and three sold between $300,000 and $399,999 out of 72 for sale. Bad as this sounds, September was actually a fairly active month at the higher price brackets.

What will the future bring? The old crystal ball is cloudy as usual. The local unemployment rate that was improving last spring lately has ticked back up to 7.2% in August. So, despite amazing interest rates (rates on a 30-year fixed-rate loan dipped below 4% for awhile last month) we expect home sales and prices to trend stable to slightly negative over the next six months.

The upshot is that homes are more affordable now that they've been in a long time. For the same payment that bought a $175,000 house last year, buyers can now step up to a $200,000 house. That's huge. In Chambersburg, Greencastle and Waynesboro, that can mean four bedrooms vs. three, for example. With prices not exactly in growth mode, it pays to have a healthy time horizon, say five years or more, to stay in the home.

Sellers, meanwhile, as a class aren't happy people. However, those with a solid reason to sell might as well list (smartly) and get it over with, because prices probably are going a little bit lower and then are expected to be stable (or flat-lined, if you want to think of that way) for some time to come--maybe years. Therefore, families should weigh carefully the pros and cons of putting off their future plans in the hope that prices may improve in the near term.

Market details for Franklin and other counties are available for the asking, for those who haven't yet satisfied their appetite for statistics (assuming such creatures exist, of course.)