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News releases in recent weeks have increasingly unearthed irregularities in the foreclosure process, disclosures which have far-reaching effects on first time and move-up buyers of Chester County real estate, those in the process of foreclosure, the real estate market, and the economy in general. In reaction to these reports, Ally Financial, JP Morgan, PNC, Morgan Chase, and Bank of America have temporarily halted all action on foreclosures, and nearly half of the states have issued a foreclosure moratorium.

dominoThe National Association of Realtors (NAR) has long urged lenders to seek resolution to distressed properties through modification and short sales rather than through foreclosure, stating that “These options are far better” and that they involve less risk of irregularities caused by the impact of dealing with such a high volume of foreclosures and heavy demands by lenders for speedy processing, In a recent letter to various federal agencies, the NAR expressed both concern for the rights of borrowers and the buyers of Chester County real estate and the hope that the foreclosure review will proceed expeditiously.

Reacting to a demand by some for a national moratorium (which many feel is inevitable), the White House called for caution in taking such a step and acknowledged that there are valid foreclosures with proper documentation that should go forward. White House spokesman David Axelrod also placed some of the responsibility for the “title wave” on government-run Freddie Mac and Fannie Mae, stating that “…if they had slowed down their loan purchases using internal controls, many of these problems would not have occurred.”

So what does all this mean for the purchaser or would-be buyer of Chester County real estate? In all probability, closings and contract purchases on distressed properties will not take place until all moratoriums have been lifted. It also means that foreclosures already in process will be held up and that some bank-owned listings will be removed from the market. Some “experts” say that those who have already purchased a foreclosed home will not have problems because of the legal finality of foreclosure sales, while others worry that that the moratoriums will bring most mortgage closings to a halt. All seem to agree, however, that properties which do have clear mortgage documentation will demand a premium price in what will be smaller supply of homes from which to choose.

Obviously there is no imminent solution to the current foreclosure fiasco, and the wise and prudent buyer would do well to follow the situation carefully, proceed cautiously, and seek professional advice before making a commitment.

 

Chester County Real Estate Sales Statistics - Sept 2010

by Scott Darling

Despite economic uncertainty, 68 percent of those surveyed in the 2010 National Housing Pulse Survey, conducted by the National Association of Realtors, still believe now is a good time to buy a home; while that number is down from last year (75 percent), it’s up from 2008 (66 percent) and 2007 (59 percent). Lower home prices and record-low mortgage interest rates are attracting buyers to the housing market – more than one-fourth of renters said they are thinking more about buying a home than they were a year ago. Sixty-three percent of renter respondents said that owning a home is a priority in their future, and nearly 40 percent said it was one of their highest priorities.

Americans are seeing more stability in the real estate market. Nearly seven out of 10 believe that home values have stabilized in their area; the same number expects home sales to remain about the same through the end of the year. 

While nearly seven out of 10 say it’s harder to sell a home in their area today than it was a year ago, it’s less of a concern from last year when the number was 10 percentage points higher. This is most likely the result of lower home inventories.

Take a look at how the Chester County real estate market fared in September.

Downingtown Area School District saw a 18% increase in active listings in September 2010, compared to September 2009.  Pending listings have decreased by 48% and sold listings have decreased by 41%.  There was a 16% increase in average sales price to $358,796, while market times decreased by 1 days.

Downingtown

Active
Listings

Pending
Listings

Sold
Listings

Average
Sales Price

Average
DOM

Sept 2010

98

28

33

$358,796

79

Sept 2009

80

54

56

$299,824

80

In the West Chester Area School District, there was an decrease in Sold listings  of 13% when compared to September 2009.  And pending sales decreased by 33% in September 2010 when compared to September 2009.  Average sales price increased by 15% to $380,300 and active listings decreased by 6% from September 2009.  Market times have increased by 3 days.

West Chester

Active
Listings

Pending
Listings

Sold
Listings

Average
Sales Price

Average
DOM

Sept 2010

139

65

71

$380,300

80

Sept 2009

148

97

82

$324,749

77

Active listing have decreased by 1% in the Coatesville Area School District in September 2010 when compared to September 2009.  The average sales price decreased by 3% to $209,622 and sold listings decreased by 36%.  The number of pending home sales decreased by 62% when compared to September 2009, while homes were on the market on average 5 days more than in September 2009.

Coatesville

Active
Listings

Pending
Listings

Sold
Listings

Average
Sales Price

Average
DOM

Sept 2010

103

29

39

$209,622

89

Sept 2009

104

79

61

$216,075

84

A word of caution...markets within a school district can be very different from neighborhood to neighborhood. For the latest Chester County PA real estate market conditions in your neighborhood, please call me at 610-564-SCOT or visit ChesterCountyHomeSource.com.

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Photo of Scott Darling Real Estate
Scott Darling
RE/MAX Action Associates
403 W. Lincoln Highway #101
Exton PA 19341
(610) 594-SCOT
610-363-2001
Fax: (610) 363-5275