Anyone searching for a home to buy in Berks County quickly realizes the selection is limited. In recent weeks more and more buyers are asking me the question; why are there no homes for sale in Berks. Let’s take a look at some of the reasons home inventory is at historic lows.
What Do The Statistics Say
In Berks County, there are presently 1,239 single-family homes available. Of this number 244 are in the City of Reading and 147 are what we call paper houses (homes not built but offered by builders). If we remove the city and paper houses, were left with 847 homes for sale in Berks.
In 2017 there were approximately 4,504 single-family homes sold in the county or 375 per month. Given the presently available home inventory of 847 units, Berks has a housing supply of 2.3 months. This figure reflects how long it would take to run out of homes if no new properties become available. In contrast, the national housing supply is at a twenty-year low of 4.2 months.
Limited New Home Construction
According to the United States Census Bureau, new housing starts peaked at 2,068,300 units in 2005. The number shrank to 554,000 in 2009 and has slowly crept up since then. In 2017 there were 1,202,100. Last year in Berks only 221 new homes were sold and settled according to Trend MLS records. That figure is well below the 752 new homes sold and settled in 2006, a 70 percent drop.
Several factors relate to the decrease in new homes locally. These factors include limited land availability or land at economical prices, over-regulation of construction and land development driving up prices, and of course, the perception of higher taxes on new homes.
Sellers Are Buyers Too
As I see it, there are two main factors at work. Many people purchased their first home with little or no money down. It takes years to gain principal equity and if house prices do not climb more than the rate of interest it can take even longer. The lack of equity makes it hard for these homeowners to move up, so they have to stay put.
Most sellers are also hoping to buy, so they are facing the same market constraints as buyers. I often hear sellers say, “If I do sell me home where am I going to live?” Often they decide not to list their home until they see another property they like. Their action, or lack of, creates a paradox of sorts and keeps the overall inventory down.
Nationally up until 2008, the average homeownership tenure was about four and one-quarter years. Since the end of 2008, it has steadily increased from 4.25 to almost eight years. This statistic is reflective of the fact that homeowners are staying put.
In Berks, we also deal with the time of year conditions like weather. Many older Berks Countians tend not to consider moving in the winter months. Moving can be challenging enough without having to consider that surprise noreaster.
What Does All This Mean
Berks County home inventory is far lower than the 20-year low national average. A healthy number of homes for sale in our area somewhere north of 2,000. New home sales have not rebounded, and home price increases have been limited and do not reflect overall demand relative to the low supply. An economic disturbance exists that, in my opinion, has to do with, you guessed it, property taxes and available good jobs. This is where we need to give a shout out to our Pennsylvania state and local legislators folks.
Bottom line, if you are looking to sell and buy a home here in Berks County, you better have a solid plan and be aggressive. That often means having a real estate agent who can make a difference!
Knowledge is Power!