Martin Millner

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First quarter statistics are in, so we are able to begin to develop a better indication of where things are with regards to real estate in the communities I serve, in Bucks County. I have written many posts in the past, explaining that the market in Bucks County, is nowhere near as depressed as it is in some markets in the country. I will address that issue, in another post to follow shortly.

Here in Bucks County, looking at first quarter statistics, there is no question that we are continuing to experience a buyers market. That means that there are lots of things on the market, not as many buyers. One point of emphasis though, is that contrary to what the press would have everyone believe, foreclosures in our area, are still not influencing the market significantly. I still have buyers who are under the impression that every house currently on the market, is being sold by a desperate seller, who is facing imminent foreclosure. That is simply not the case. Virtually every single seller in the market, that I am aware of, is selling for life style, or job transfer reasons. I have sellers moving up, downsizing, and selling because of job transfers. All of those reasons, are completely normal.

Here is what the statistics show. The volume of sold/closed units through the first quarter was noticeably lower than last year, in virtually all of our markets. Lower Makefield Township was actually down almost 30%, and Upper Makefield was down almost 50%. Newtown Township was actually the exception, in that Newtown showed an increase of approximately 4% in closed first quarter units.

Inventory is trending as one would expect in a buyers market. Inventory is up from February in all markets. If you compare inventory levels at the end of March 2008, with March 2007, the results vary from market area to market area. For example, Lower Makefield's inventory of homes was lower at the end of March this year, than last year, by almost 22%. Newtown, Upper Makefield and Solebury are higher, as is Buckingham and Northampton.

Average days on the market are higher over a year ago, reflecting tougher market conditions for sellers.

Looking at sold/list ratios, shows slighly increasing discounts of between 6 & 10 percent in most markets.

Despite all of the above, the market contines to be extremely price sensitive. There are still many examples of houses selling quickly, and selling for close to the asking price. For example, I recently had a listing right in Yardley Boro, on the main street. It sold in 2 days, for almost exactly the asking price. Where is the press when that happens!

The message from looking at all of these statistics is that houses are selling every day of the week. If it is priced correctly, and marketed correctly, it will sell. It is still a buyers market, but there are still buyers looking, and buyers are making offers.

In future posts, I will delve into the statistics a little deeper, and I will also reflect on some additional observations about the current market.

I finally saw an article in the local press, (Feb 26th) that accurately described our local market. Here is a link to the entire article, which appeared on the front page of the Philadelphia Inquirer.

(http://www.philly.com/inquirer/real_estate/Houses_still_find_eager_buyers.html) Basically, the article said that there are still situations in our current real estate market, where houses attract more than one buyer. Essentially, it comes down to price. If a house is priced appropriately, it will get shown, and it will sell. According to the article, for all of 2007, the median price of houses sold in Bucks County, was down 0.3%, in 2007, which represents a pretty insignificant drop. Even in terms of units, for the entire county, Bucks was off 4.4% for the previous year. Again, if you read all of the national articles, you would presume that Bucks County is experiencing a real estate depression. That is simply not the case.

Looking at the statistics locally, from January, some of our local markets, are actually ahead of last year. Lower Makefield Township is up by more than 15%, and is Newtown Township. Solebury and Buckingham Township are down. Inventory has increased in virtually of our markets, in January, from December. However, if you compare inventory this January, with last January, most markets are actually showing less inventory than a year ago. Again, this varies on a township by township basis. Sales discounts still continue to average around 5% or so, from the asking price.

What all of the statistics mean from a local perspective, is that the market in Bucks County is nowhere nearly as weak as it is in some parts of the country. Although it is still a buyers market, homes that are priced correctly can and do sell, and they can sell for pretty close to the asking price. I recently had a listing in Yardley Boro, that was priced right, showed well, and sold the second day on the market, for virtually the asking price. (http://101nmainstreet.com/)

I have written a few posts recently, about the state of the real estate market in Bucks County. In those posts, I have consistently pointed out that our local market, is not doing all that badly. That is especially the case when you compare what is happening in Bucks County, with what is happening in many parts of the county. If you listen to the national press, you would assume that the bottom is falling out of the real estate market in Bucks County. I have been extremely frustrated with our local press, because until recently, there have been very few articles that accurately portray the state of the local market. In case anyone has not told you, real estate is, and always has been, local. What is happening in Florida, Arizona and California, has nothing to do with what is happening in Bucks County.

The chart actually documents, from data taken directly from our MLS system, that there were more closed units in Lower Makefield Township in 2007, than in 2006. You would certainly not know this, from reading the local newspapers. This is not to suggest that our market is not a, "buyers market".

I found a couple of very well written articles, in local publications, that very accurately portray the state of our local market. First, the current issue of Philadelphia Magazine, has on its cover, the following headline, "Philadelphia, Smile. Your house is worth more than you think."

In the article, the author points out that the general Philadelphia metropolitan area, of which Bucks County is included, is holding up quite well, compared with other parts of the country. The article explains why the Philly area market is better than you are being told. He points out that the area economy is still strong. Another point made, is that we are a primary residence market, for the most part. There was never a lot of speculative buying, during the hectic, appreciating years. As a result, although prices appreciated nicely in the Bucks County area, they did not appreciate as much as they did in more speculative areas. Conversely, as other parts of the country have crashed, our landing has been much smoother. The article dispels several other myths about the local real estate market. I highly recommend getting a copy of the article. If you are reading this, and would like a copy, please let me know, and I can send it via email.

The second article, was a column in the Philadelphia Inquires, this past Sunday, by the papers real estate columnist, Alan J. Heavens. Alan talks in his column, about real estate from a historic perspective. He says, "Real estate is local as local as a block. Forget the web nuts and NBC nightly news. There is no national housing market." Further, he observes that if you are thinking of selling but worried that the housing market is glutted. Forget it, he says. Houses linger because they aren't priced right for the market. How true!

Interest rates are low, and there is mortgage money available, despite the challenges of the sub-prime lending fiasco.

In a nutshell, as I have been saying recently, the real estate market in Bucks County is not as bad as the press would have us all believe. Houses are selling every day. The spring market is upon us and I will report on how the first quarter faired, once we get through March.

In another post, I will provide some additional statistics for other Bucks County markets.