Betsy and Bill West are a longtime real estate team in this part of Pennsylvania. Over the past 15 months, the pandemic has impacted their livelihoods in a variety of ways, first feasting them and then creating a feast of opportunity for the Cecil Township couple and their brothers and sisters of estate agents and agents.
Residential real estate has become a nationwide nascent industry, which has been essentially a sellers’ market and a buyer’s market for months – and perhaps a year in the Pittsburgh area, some analysts say.
The main reasons are simple: Although interest rates have risen since hitting historic lows last summer, they are still below 3%. The rates, along with the injection of federal stimulus funds, made it a fortuitous moment for sellers and, to a lesser extent, potential buyers.
Demand in many parts of the country is outstripping the supply of housing, causing potential buyers to compete for a particular home. A number of them may offer thousands of dollars above the list price, but only one will prevail. Salespeople, meanwhile, are shining like never before. Yet in many cases it is a victory for both parties.
That’s why the West, agents of Berkshire Hathaway Home Services in Washington, have adopted some house rules.
“We are telling everyone who has a house to sell and a place to go, that they will never get more than they do today,” Betsy said last week. âSalespeople are getting $ 10,000 to $ 20,000 more than they ask for. We’ve never seen that. Now is a great time for sellers to list and sell quickly.
On the other hand, she added, âWe tell buyers to be aggressive, to be ready to take a chance. Some take over the 1% transfer tax for them and the seller. Some offer to pay the owners closing costs.
âSometimes six or seven offers come in in the first 48 hours (that a home is listed). We sit down with the seller and present maybe six offers and the pros and cons of each. Maybe someone isn’t offering the most money, but is willing to pay the closing costs.
This contrasts sharply with the second quarter of 2020, when Governor Tom Wolf included the real estate industry in his late March shutdown of “non-core” businesses. Agents struggled, working mostly from home, and consumers – some of whom had already put homes on the market – had to wait. Real estate returned on June 5, during a partial reopening by Wolf.
Since then, said Scott Cavinee, his business has been “inundated” with work. Cavinee is the founding broker of SWC Realty, which has offices in Washington, Waynesburg, Uniontown, and Lycoming and Clinton counties.
“It was crazy, and it’s been like that since the governor reopened,” he said. The market boom “lasted longer than I thought”.
Cavinee said Pennsylvania was the only state where real estate was completely shut down during the pandemic, “and it absolutely shouldn’t have happened.”
Ovi Manciu is amazed at how the industry is changing now.
âWhen something is on the market now, it sells very quickly,â said Manciu, an agent for Howard Hanna Real Estate in Peters Township. “There are bidding wars.”
He was recently in the midst of such a “conflict”. Manciu said that one of his clients was in love with a house for sale in Peters “and was prepared to pay $ 25,000 more than the asking price”.
Speaking with an agent representing another interested party, Manciu found that eight offers had been made on this house, and five were more lucrative than the one made by his client.
This individual, Manciu said, is still looking for a home in Peters.
âThis is the best opportunity to sell in 10 years,â said Manciu, a resident of North Strabane Township. âThings have completely changed. Before, people would bid 10% below the asking price. Now they are prepared to pay that much, no matter if the house needs to be renovated.
Buyers appear to be flooding the market, and probably are, in part because the rapid sales drive inventory of available existing homes down, Manciu said. But he also believes a number of apartment dwellers, working from home while dodging the dangers of the pandemic for more than a year, âfelt trapped in a cage. They had good credit, the rates were low, and now they want a house with more space and gardens.
Another problem, according to West, “is that the construction of new homes is so slow now.” Supply chain outages and delays have been formidable, and the costs of lumber and building materials have skyrocketed, limiting opportunities for future homeowners.
âThere is a percentage of buyers looking to build, but new construction is expensive now,â Manciu said. âBuilders are struggling to get materials. The price of lumber became so high that builders could only guarantee lumber prices for 30 days. “
So how long will this phenomenon last? None of these real estate professionals called themselves Nostradamus, and could offer no waterproof forecasts.
The Federal Reserve gave no clarity on Wednesday when its policymakers indicated that due to inflation, they could increase their benchmark short-term rate – which includes mortgages – twice by the end of 2023 They had previously estimated that there would be no increase until 2024.
âI don’t see how (the real estate boom) can continue, but some people think it’s going to continue,â Cavinee said. ” I’ve no idea. It’s already gone on longer than I thought. “
Manciu said, “I see it’s slowing down a bit now, but interest rates are still low and houses are still selling.”
“How long will it last?” Betsy West asked, repeating the question. âThe speculation is that we are going to enter into a change. But Bill and I have been around long enough to know that real estate is like a water tap. It flows, then just as quickly, the tap closes.