What to Expect When Home Buying in Chester County

Steve LaretSteve Laret (Submitted Image)

The Chester County housing market has been nothing short of a roller coaster ride over the last year. Housing prices are at their highest levels, inventory availability has been at its lowest, and buyers and sellers are fraught over the decisions they must make.

During any other typical summer, home buyers looking to upgrade would have plenty of options in the area. But the pandemic took the wind from home buyer’s sails for a variety of reasons.

In decades past, when the government created stimulus, there was a high rate of inflation that followed. This was prominent in the late 70s through early 80s, where inflation hit just over 10% at one point. With continuous talks about economic recovery packages, it’s not unreasonable for some to have reservations about buying a home with so much uncertainty.

Of course, we also saw many homeowners — who might have been considering putting their home on the market — opt to remain there and do upgrades or build-outs instead of moving. This reduced the inventory levels in the county and squeezed buyer’s options even further. In fact, only a few months ago Chester County had just under 600 homes listed for sale – where, during the same period in the past, we would have had nearly 2,000+ homes on the market.

This significant decrease in inventory was one of the main reasons we found home buyers feeling distressed when they were getting outbid on home after home. And if you’re a first-time home buyer, the stress and anxiety can weigh you down when you lose out time and time again.

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For first-time home buyers, the majority are shopping for homes under the $400k range. In fact, it’s around 70% who are shopping in that price range or under and unfortunately, Chester County has only around 30% of houses for sale at $400k or less. In other words, out of the nearly 700 homes on the market today in Chester County, only around 200 of them fall in the $400k or less range. Therefore, you can imagine how tight competition is when 70% of home buyers are looking at these same 200 homes – and it’s why the bidding war hasn’t quite calmed down yet. It’s also important to note, new home development is still not at the levels the country needs at this point.

The competition didn’t stop there. Half of the mortgages in April 2021 were being secured at 20% down or better — and a quarter of all transactions in April were straight cash. This meant all the subprime borrowers who were hoping to put down less than 20% (i.e. FHA, VA, USDA, 5% conventional, etc. aka those that make up the largest buying class in the market) are forced to compete for only 25% of the available inventory.

So where is the silver lining in the housing market?

There is hope for home buyers. If home buyers have the courage to get in now – before inflation increases and inventory decreases – the value of their home will only go up. It might seem worrisome to spend more than you had originally planned, but the equity in homes today is growing rapidly and your home will only appreciate in value going forward.

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It will take many years for new home inventory to get to the place that would benefit first-time home buyers — especially after the significant lumber market we’ve had in the first and second quarter of 2021 — which contributed to increased costs of building new homes. My advice, get in now in a Chester County home before inventory depletes and further or new home construction rises once again.

Steve Laret is the owner of West Chester-based Steve Laret Team and has been helping people buy and sell homes for more than a decade. He is currently licensed in Pennsylvania, and has been a licensed agent in Alaska and North Carolina as well. He and his team rank among the top .03% of all real estate agents nationwide and was recently named by Homesnap as one of the country’s Top Real Estate Agents in the Top 5% of all realtors. Additionally, Steve was named as a Top Real Estate Producer by Philadelphia Magazine and a Top Real Estate Agent by Main Line Today Magazine. Learn more about The Steve Laret Team: www.teamlaret.com.

For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News.

This article is intended for informational, entertainment or educational purposes only and should not be construed as advice, guidance or counsel. It is provided without warranty of any kind.