As we just passed the midpoint of 2021, we 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 $260,000. This is an increase of 13% over last year. While 13% is a very healthy increase, these types of year over year increases are not sustainable long term. Interestingly, prices have been moving higher at all price points, not just the lower levels. High end homes have also participated in the market frenzy. We hear many people saying this is a bubble, and they are waiting for prices to drop as they did after the 2004-2007 runup. This is not a bubble. The price increases we have seen the past several years are supported by the fundamentals of supply and demand. What we do expect to see is price increases dramatically slowing over the next 12 to 24 months as we return to a more normal market.
We track inventory levels weekly in Lancaster County and have for 15 years. There is a direct correlation between inventory levels, market activity and pricing. For the past 7 years inventory levels have been steadily dropping as prices have increased. Over the past 4-to-8-weeks, inventory levels have stopped dropping and actually started increasing slightly. If this trend continues for another few months, We expect we will be at the bottom on inventory. Remember you heard it first here. Team Trimble is calling the bottom in the summer of 2021!
As we put the pandemic further in our rear-view mirror, more sellers will enter the market with much needed inventory.
While demand will remain strong, we think we will start to see a “very good” real estate market replace the “frenzy” we have experienced the past 12 months. New construction will alleviate some of the inventory shortage but there will still be supply shortages at the lower price points. Properly preparing a home for sale and pricing it correctly remains very important in all price ranges.
Paradoxically, it is both a good time to buy and also sell a home. The most important factor you should look at is whether or not the time is right for you. Regardless of national trends or local trends, the most overlooked area when deciding to buy or sell is whether you and your family are prepared for this life changing event. Hopefully, this information has been helpful to you to put the 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.