As residential real estate activity cools in the region, the jump in home prices has slowed as well, though they’re still well above last year’s figures.
The July reports for Lancaster County, the greater Harrisburg area, and York and Adams counties still show it’s a seller’s market, even as more potential buyers drop out because of increasing unaffordability.
In Lancaster County, closed sales were down 21.7% in July from the year before, plummeting from 627 to 491. They were also 13.1% lower than in June 2022.
The median sold price was $300,500, which is 8.1% more than the $278,000 recorded in July 2021. However, that figure was down slightly – 0.7% – from the $302,500 median in June 2022.
Average days on market in Lancaster County was 12, and the average sold to original list price ratio was 104%, so many houses are still going under contract for above asking price.
Of the homes sold in July, 340 were on the market no more than 10 days.
“It’s no secret the market is slowing down,” said Greg Bardell, 2022 president of the Lancaster County Association of Realtors.
And inventory is still very tight. There were 483 active listings, which is about half the five-year July average of 963, he pointed out.
But the number is rising, at least, compared with a year ago. Active listings for July 2021 were just 396.
The market has a long way to go, but “we’re building inventory,” Bardell said.
For many sellers, the good news is they’re still getting top dollar. Overall activity is down, he said, but “I don’t know that the equation has changed a lot for buyers and sellers.”
From an industry-level perspective, however, what’s happening is that agents are competing for fewer transactions, Bardell said.
In July, 107 settlements were recorded in Adams County, a 6% decrease from this time last year. In York County, 590 homes were sold last month, a 20% decline from July 2021.
Year to date, the 721 houses sold in Adams County are 2% more than a year ago, while the 3,833 homes sold during the first seven months of 2022 in York County were 4% off the pace set in 2021, which produced a record.
The median sales price in Adams County in July was $295,000, a 19% jump from July 2021. In York County, the median sales price rose to $250,000, which was 6% more than a year ago.
Elle Hale, 2022 president of the Realtors Association of York & Adams Counties, agreed with Bardell that it’s still a seller’s market.
“We’re seeing more inventory,” she said, but some potential buyers are taking a break, as mortgage rates have risen above 5%. And that’s leaving the field open for other buyers, she said.
As for home sales prices, the median through the first seven months in York County was $241,500, an 11% increase over 2021 at this time.
Hale said agents are being told to expect prices to rise in 2023 at a much slower rate, with national projections at 2% annually.
In the region covered by the Greater Harrisburg Association of Realtors, closed sales in July fell 12.4% in Cumberland County (346 to 303), 11.5% in Dauphin County (373 to 330) and 19.1% in Perry County (47 to 38).
They’re also down in all three counties from June – 19% in Cumberland, 5.4% in Dauphin and 9.5% in Perry.
Through July, median sold prices were $290,000 in Cumberland (up 13.3% from 2021), $239,000 in Dauphin (up 9%) and $218,750 in Perry (up 9%).
From June 2022, they were down 7.9%, 4.1% and 0.5%, respectively, in that trio of counties.
Average days on market in July was 14 in Cumberland and 15 in both Dauphin and Perry.
Average sold to original list price ratio was just under 100% in Perry County, 102% in Cumberland and 101.2% in Dauphin.
“Year to date, across the board, prices are still stable and rising, but not at the rate they have been, so the next few months will be very telling in whether our market is shifting or whether it is simply stabilizing,” Sylvia Hess, 2022 president of the Greater Harrisburg Association of Realtors, wrote in an email. “Demand continues to outpace supply.”
She said the surge in interest rates has put a damper on activity. “When rates were in the low to mid 3% range, a purchaser could afford higher-priced properties based upon their payments at those lower rates. As rates rise … above 5%, many of those same buyers are unable to purchase based upon their new payment and debt-to-income ratios, etc.”
Price reductions are more common now, too. “Since 2020 and our industry ‘shutdown’ of sorts, we have seen properties selling well above list price, many with multiple offers, many with escalation clauses, with many buyers waiving contingencies, but the tide seems to be turning, albeit slightly,” Hess said.
“We are seeing more price adjustments, fewer multiple offers, offers including contingencies, and some properties sitting on the market longer, especially in the last month or two,” she said.
“Some of this can be attributed to increased inventory, higher interest rates and inflation, but the trend of pricing properties too aggressively from the start is playing a key role in our current market also,” she said. “Properties priced too high remain on the market longer, leading to increased inventory, more possibilities for negotiation and ultimately price corrections, which often leads to a cooling market, all of which are great signs for buyers.”
But it’s still a strong market to sell, she said. The key is the home’s initial list price, “which has never been more critical.”
Hess said that individuals who buy now will be glad they did. “Prices will continue to stabilize and ultimately rise, maybe not at the accelerated rate they have been, but appreciation will increase nonetheless.”
Paula Wolf is a freelance writer