Will it be a Happy New Year for Berks County real estate? Let’s peer back to 2014 to see if we can get a feel for the coming year.
According to the Trend Market Watch Report, the first quarter of 2014 showed an increase of 0.4% but home sales were down a whopping 13.5% from 2013. The second quarter showed an increase of 2.7% and home sales were up 5.3%. The third quarter showed an increase of 1.7% and home sales were up 7.2%. The fourth quarter ended with a resounding thud. While overall sales were up 13.8% for the quarter, which was tops for the year, home values decreased 5.3%. Simply put, if you owned a home that was worth $200,000 in November of 2013 it was worth $189,400 in November of 2014 based on the numbers.
The number of home sales in Berks County in 2013 was 3,795, in 2014 the number rose to 3,944. This is an increase of 3.92%. The inventory of available homes dropped approximately 7 % for the year. This is normally an indicator that home prices will rise due to supply and demand and that is what happened. From 2013 to 2014 the average home price in Berks County increased a whopping 1.23%. In 2013 the average home sale price was $158,891 and in 2014 it was $160,849 on total home sales of $684,389,416.
To put things into perspective I took a look at the Berks County real estate home sale figures from 2005. The average sale price of a home was $173,028 or 7.03% higher than 2014. The total homes sold was 5,845 for a total sales volume of $1,011,354,000. This is a 32.329% drop in total sales volume in about a decade. Wow!
So what do all these numbers tell us about the prospects for Berks County real estate in 2015? It tells me we are running ever lower on available homes. While this is normally good for home sellers, as stated above, Berks County is not the only place to live. The neighboring counties have seen much higher real estate value and business growth than Berks. Could people look elsewhere? Yes, but history tells me different. Berks County is not very transient. People who live here tend to stay here.
Interest rates are always a huge factor. According to Freddie Mac, the average home mortgage interest rate in 2013 was 4.17% while the average in 2014 was 3.98%. While many have predicted that interest rates will rise this year I am a contrarian. I have come to the conclusion that most economies around the world, including ours, are so busy printing money to pay their bills that yields will go ever lower. Read “The Race to 0%” for more on the subject.
The cost of living is an all important factor in any community. Last year at this time a gallon of gas was around $3.70, ouch! According to theFuelGaugeReport.com, the average price of a gallon of gas in 2013 was $3.49 while that same gallon averaged $3.34 in 2014. Today the average cost of a gallon of gas is $2.10. Not only are gas prices down but all items associated with petroleum. This is a big hit for everyone. Especially those looking to buy or sell a home in 2015.
Lastly we have those darned property taxes. While I do not have exact statistics on how much Berks County property taxes have gone up year over year I am sure the amount does not have a positive effect on our housing market. I have located a great website that shows a plethora of statistics relating to property taxes in Berks County. It is called www.tax-rates.org. It states that Berks County has one of the highest median property taxes in the United States, and is ranked 154th of the 3143 counties. C’mon legislators and other people we elected, please get this one right and we could have an awesome couple of years. Don’t let what is in this Mediatrackers.org article derail us.
So there it is….Low home inventory, low interest rates and low gas and oil prices….Sounds like the Berks County real estate market should be booming.
If property taxes fall in line, banks become approachable and nobody drops any bombs we should be good in 2015. Oh..yeah, it helps to have a great Realtor® too!
Knowledge is power!
Jeffrey C. Hogue
#jeffreyhoguerealtor #knowledgeispower #berkscountyrealestate