Let's start right off with the overall grade for the local real estate market for 2012 and give it a 'C+' with the details for that explained below. We saw definite improvement over 2011 (which got a 'D' for dismal!), but there's still plenty of room for improvement as we head into the Spring 2013 market. If we keep working hard I think we can get that grade up to a solid 'B' by this time next year!
In 2012 a total of 607 homes were sold in the Parkland School District, up from 502 in 2011 and an increase of 20% for the year. That compares very favorably with the rest of the Lehigh Valley which saw a sales increase of 13% for the year. For perspective there were 746 homes sold in the Parkland area in 2005 which remains our high-water mark in recent years. The population of our area has continued to grow and several new large communities have been built, especially in Upper Macungie, so it's not exactly an apples-to-apples comparison between the two years. However it does provide us with some context as to where we are today.
The average sale price in the Parkland area was down again last year, from $247,000 in 2011 to $242,000 in 2012. This 2% drop is the lowest decrease we've seen in the last 5 years and if recent months are any indication should be the last yearly decrease we'll see in this current market. A word of caution though about how misleading this number can be: just because the average sale price moves up or down is really no concrete indication that your home has changed in value. For example the Breinigsville area has seen a larger decrease in average sale price than most other areas of the Parkland School District. This isn't because of drastically decreased home values, but because more townhomes have been sold recently in Coldwater Crossing and Highgate. 47 of these homes were priced under $200,000 which resulted in a lower average sale price for this area. Back in 2006 Coldwater Crossing sales included a large number of single, detached homes in the $350,000-$400,000 range which drove up the area average. This example shows how important it is to keep these numbers in context and why it's important to speak with a knowledgable professional before making any financial decisions reagrding your home's value.
A really key indicator for the health of the real estate market is the average Days on Market (DOM). This number is very useful in predicting the time it takes for a home to sell. Again, a lot of factors come into play with this statistic but placed in context it gives us a good indicator of the market. At the end of 2011 the time on the market for homes was 103 days; for December 2012 we're down to 84 DOM. Much better, but double what it was in 2005 (44 days!).
We've definitely turned the corner on the really dark days of the real estate industry and 2013 should continue to be a year of recovery. My personal predictions for the Parkland area this year would be a continued increase in the number of homes sold (my estimate is 650-675), values will be flat to slight increase in home prices (1-2%), and the time it takes to sell a home should continue to drop (my target is 65-70 days by the end of the year).
If you're thinking about selling a home this year call us for your free copy of our 2013 Home Sellers Guide and a detailed analysis of your home's value. You can also receive our automated monthly Market Insider report on homes in your neighborhood!