WEST CHESTER — Last week, local Realtor Steve Laret put a client's house on the market listed at $275,000. Within days, the house sold for $305,000.
"It's been like that across the board," said Laret, who heads up the Steve Laret Team with Vanguard Realty Alliance in West Chester. "We're off to a gangbuster start, and personally, January was the biggest January we have ever seen for sales."
Realtors in Chester County say it's a seller's market, created by a pandemic that has created pent-up demand. Add to that mortgage rates at historic lows — averaging 2.84 percent for a 30-year fixed mortgage in Chester County — and it's easy to see how sellers are getting top dollar for their houses.
In January, newly listed homes for sale in Chester County increased by 21 percent from a year ago. And the average number of days a house stayed on the market decreased by 30 percent from a year ago. And the number of houses sold in Chester County in January increased by 31 percent, from 702 to 729.
"There are nervous sellers and there's a lack of inventory," said Tammy Duering, Realtor with RE/MAX Excellence in Kennett Square. "It's great on the seller's side because you will sell your house quick, and you will get top dollar for it. And it's great when you go to buy, because interest rates are in the twos."
Some Realtors feel the low inventory could be from hesitant home sellers, due to the uncertainties created by the pandemic. A national survey recently found that 31 percent of homeowners won't sell their home in the next three years due to financial anxiety of COVID-19. Some are afraid of losing their jobs.
"With the rollout of the vaccine, we will see jobs come back, and some restaurants may not make it, but there will be new ones to take their place," Laret said. "A good number of jobs will come back and we will have historically low unemployment again."
And low unemployment, Laret said, is great for the housing market.
"Our average time with a buyer is four to six months," Laret said. "It's a lack of inventory. It's not uncommon to be writing four or five offers per buyer until you get one accepted. Now, we have to work three times as hard for our buyers."
Duering said she often plays the role of therapist when buyers don't get the house they want, even when offering list price or more.
But the catch-22 for sellers is that waiting to sell may raise the cost of a trade-up. Laret said there will be a correction in the residential real estate market at price points at $800,000 and above far faster than those priced under $600,000.
"It's most competitive at the lower range," Laret said.
Last year, the median listing price for a house in Chester County was just below $390,000. And buyers' preferred choice of high schools last year were, in order, Unionville, Bayard Rustin, Great Valley and Downingtown Stem Academy. Those sellers often got top dollar, and sometimes over asking price.
But Duering said sellers have to be cautious not to overprice their home. She said those houses sit on the market for months, or years and don't move.
"Some people are trying to take advantage (of the sellers market), and the house just sits there," she said.
And although buyers are finding it hard to find their dream home, they are finding that even if they do, financing could be troublesome. Mortgage lenders have set stricter criteria during COVID-19, meaning borrowers with lower credit scores and smaller down payments may find it harder to qualify. The availability of mortgage credit, too, dropped to its lowest level in five years, according to an index calculated by the Mortgage Bankers Association.