As we just passed the midpoint of 2023, I wanted to provide an update on the Lancaster County real estate market. The median price of a home in Lancaster County now stands at over $310,000. This is an increase of 2% over June 2022. This is down dramatically from the 15% year-over-year returns we’ve seen compound over the last several years.I closely track home inventory levels in Lancaster County. There are direct correlations between inventory levels, market activity, and pricing. Active listings in Lancaster County are up almost 20% this year while new listings are down 10% over the same period. Meanwhile inventory levels are remarkably stable. Mispriced homes are starting to sit, but the average days on market in Lancaster is still less than 10 days for 70% of home sellers. In short, a small cohort of unrealistic sellers are holding inventory levels steady while well priced homes are still selling in days.
Competition for home buying remains fierce. Cash and conventional financing made up nearly 90% of closed transactions in June. The best homes are still receiving multiple offers without contingencies. However, we are starting to see occasional seller concessions on the periphery, especially when homes are priced at the high end of what the market will bear.
Higher interest rates have slowed the frenzy, but outsized demand coupled with a lack of supply will keep us firmly in a sellers’ market for the foreseeable future.There are many well-qualified buyers that remain sidelined because they are reluctant to compete in multiple offer situations or because they are unwilling to waive their due diligence.
My view is that the demand created by the cheap money of the last several decades is going to take awhile to dry up. My hope is that it continues to dry up slowly while interest rates hold steady at or very near present levels over the next several years. As a country, we are starting to get our arms around some of the inflationary pressures of the last several years, and we are making good progress towards the fabled “soft landing”. In Lancaster County I expect to see lingering shortages at entry-level and middle-class price points accompanied by a continued flattening or possibly some modest decreases in home sale prices over the next 12 months.It is a great time to both buy and also sell a home. Regardless of national or local trends, the most important factor you should look at is whether the time is right for you. Hopefully, this information has been helpful in putting our local market in perspective. Please contact me if you, or someone you know, have any real estate needs or questions or if you want to discuss market conditions.
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