At this time of year I often find a little extra time to reflect on the market and look forward to what next year may bring. I’ve had my cup of tea and made a fun spreadsheet, here are my observations on our micro-market!
The biggest news…
This year Swarthmore had 14 sales of condos and we are down to only 3 active listings!
In 2011 our town had only 5 condominium sales. This was a shame, but not a surprise. In the preceding years our condos were hit hard by three separate events:
- The first was the development of the Plush Mills Senior Center. Prior to Plush Mills there were no hyper-local options for assisted living. Many seniors who would have purchased condominiums chose instead to move to Plush Mills. And many seniors already living in condos listed their properties to move there. This caused a swollen inventory, which ultimately affected prices.
- The second was the changing lending environment. For a time it was nearly impossible to obtain mortgage financing on a condominium. In the national environment many condo owners were living in half-built communities that went under because there were not enough owners paying dues to maintain the community. As a result mortgage criteria were changed nationally in ways that discouraged making mortgages on condominiums. That was a shame for markets, like ours, where there are established and thriving condominium communities.
- The third was the recession, which of course, had a profound effect on all real estate values.
As the economy improved and consumers became more confident in the real estate market, condo sales began to thaw. Although obtaining a mortgage on a condominium is still difficult, a few local banks have indicated a willingness to make loans. As the rental market heated up many condo owners even chose to rent their units for profit – eliminating the need to sell at a lower price. Between increased sales and some renting of units, the excess inventory appears to have been worked through at last! In 2011 there were only 5 sales of condos. Last year there were 20 sales. And this year we had 14 sales of condos and are down to only 3 active listings. This is a true break-through. Although prices are still down substantially from their heights, they are strengthening. It is gratifying to see this progress.
The big picture …
Our market has such a limited inventory that it can be hard to produce data with true statistical significance. Instead, here are a few observations that seemed to be in effect across the board:
– Fixer-uppers: After several years of sluggishness in the fixer market, 2013 was a strong year for fixers and for the re-sales that followed contractor renovations. A few examples of fixers that were snapped up quickly are the charming colonial at 18 Oberlin, the beautiful Thayer-built home at 215 Lafayette, and the solid colonial at 544 Westminster. All three were in desperate need of rescue inside and out. Three post-renovation beauties were the Arts & Crafts rethinking of 315 Dickinson Avenue, the open and sunny renovation of 340 Haverford Place and the clean restoration of 544 Westminster. Fixers in good locations with personality were all the rage this year and I expect this trend to continue into 2014.
– The $550,000 to $650,000 price point: Although there was healthy activity in the market in general this price point saw 10 sales in 2013. There were only 2 sales in 2012 and 2 in 2011 at this price point so it was nice to see a spike! In all, 15 of our 55 single family home sales were over $550,000 this year. This follows 10 out of 59, and 12 out of 51 in 2012 and 2011 respectively. (I do not mean to indicate that prices are rising at a swift rate. Rather, I note that inventory in this price range is popping up, and that buyers are ready to buy it when it does!)
– The prevailing theme: From the perspective of an agent on the ground, the resounding cry from my buyers was that we had a profound shortage of inventory. We never seem to have quite enough houses in Swarthmore for the number of people who would like to live here, and many buyers need to compromise on luxuries like master baths and Central Air! However this year was more painful than usual for buyers as many of them struggled to find a house through a spring market and into the summer. Like in the early 2000s, we are often rushing to see homes as soon as they pop up rather than waiting for a convenient weekend tour!
Thoughts for 2014…
Of course I don’t have a crystal ball! But here are my hopes and expectations for 2014. (These are just my opinions, don’t bet your farm on them, etc!)
– I hope that owners of single family homes who held back on listing their homes during the slow times will have the confidence to market their homes this spring.
– I expect that our “inventory” of buyers will continue to snap up well-priced single family homes with very short days-on-market.
– I hope that more condominium owners will choose to sell their properties rather than rent them indefinitely, now that the market is warming.
– I expect that condominiums in beautiful move-in condition will sell quickly. However, I believe that the fixer market for condos will continue to be sluggish through 2014.
– I hope that the Millennial Generation’s fondness for walkable communities will continue to bring Swarthmore an influx of excited new buyers who appreciate all that we have to offer.
– I expect that as more media attention is paid to Swarthmore for the above reasons, we will draw more buyers than ever who are new to the area. These buyers will need to learn about our older housing stock so that they have reasonable expectations!