Sales brisk in county, region
With more people entering the housing market, it's a good time to sell a house. And with low interest rates, it's a good time to buy too, said real estate agents in the county.
In its year-end residential real estate report, West Penn Multi-List found a nearly 4 percent increase in home sales between 2018 and 2019, with an average sale price boosted by 5.3 percent in that time. West Penn Multi-List tracks real estate information for 17 counties in Western Pennsylvania, including Butler County.
In Butler County, that trend isn't much different.
“It's busy,” said Jared Sullivan, a licensed listing agent with Chuck Swidzinski's Berkshire Hathaway real estate team. “Last year was a record year for us, and it seemed to continue through the holidays and into the new year.”
The average sale price in Butler County in 2019 was just over $279,000, according to Georgie Smigel, a realtor with Coldwell Banker. Smigel said the prices were higher in the southern than in the northern tier of the county.
In Cranberry Township, for example, a house sold for, on average, about $343,000 in 2019 and about $346,000 in the first six weeks of 2020.
But that doesn't mean the northern area of Butler County saw a decrease. Gary Straub, who manages the Butler, Slippery Rock and Grove City-area branch of Berkshire Hathaway, said the average sale price in his office was around $173,000 last year and has already risen to $185,000 in 2020.
Even if a 7 percent increase in home sale values is unsustainable — the average is about 3 percent year-over-year — the hot start to 2020 is at least positive.
“Normally, the first quarter of the year is not our busy market. This year's different,” Sullivan said. “We have been very, very busy the last three weeks. I'm not exactly sure what the reason is behind that, and I'm not complaining about it, but people have been buying houses pretty quickly as long as the pricing's appropriate.”
Realtors pointed to a couple of factors as part of why more people are buying than in years past, even if the busy January and February are an anomaly.
The first factor, Sullivan said, is that younger people are entering a period in which homeownership is within their means. He said he doesn't agree with the assessment that millennials — a generation ranging in age currently from roughly 25 to 40 years old — are more likely to rent than buy their home, especially when the price is reasonable.
“There's a window of $150,000 to $250,000 where those homes sell very rapidly,” he said.
Smigel said a second reason more people are entering the housing market is the currently low interest rates on mortgages. According to the Federal Home Loan Mortgage Corp., the average APR on a 30-year fixed-rate mortgage is around 3.62 percent.
Compared with February 2019, when the average rate was about 4.37 percent, that's a savings of more than $50,000 on an average-priced Butler County house over the life of a mortgage. Homeowners would also pay $120 less a month on their mortgage payments with the lower rate.
While the price of real estate typically rises every year — Smigel said the average increase is about 1 percent to 3 percent each year — the past 14 months have seen homes selling for more than they have in years, Sullivan said.One reason is basic supply and demand. According to the Multi-List's report, home listings are down 0.53 percent across the 17 counties, which realtors say is similar in Butler.Sullivan called the real estate market a “seller's market,” as there are more buyers than homes on the market. By itself, that drives up the prices — but he added it's not necessarily a significant change.One effect of the seller's market is that, occasionally, houses on the market receive several offers from different buyers.“I definitely think that multiple offers are possible and they do happen, as long as the agent's doing what they're supposed to be doing and pricing it accordingly,” Sullivan said.Straub said the multiple offers can all have different features appealing to the seller. Sometimes, the offer price is higher than the asking price; other times, buyers offer to waive conditionalities such as assistance with closing costs.Sullivan said new construction homes aren't necessarily driving down the prices of other houses. Typically, he said, buyers of new construction houses are families adding children and increasing the size of their homes or empty nesters downsizing.“New construction's not for everybody. It's a process. Sometimes, it takes six to eight months,” Sullivan said. “Not everyone wants to, or can afford to, do that.”Straub said another factor driving down the supply of houses is the low interest rates. He said some homeowners who would be looking to sell may refinance their mortgages rather than sell.Smigel disagreed with that assessment.“They're usually selling the home because they want more space or less space, or moving to a different area,” Smigel said. “That might contribute to a few, but not a vast amount.”Despite the bumps in housing prices, all three realtors agreed that homes are selling quickly. Straub said it's not “out of the realm of possibility” for houses in the northern part of the county to receive offers within 10 days of listing, and Smigel said homes in 2019 were on the market for around 43 days, and that's not changed in 2020.“It's been pretty consistently two months or less for the last year and so far this year,” Smigel said.
