Market TRENDs: Chester County, January 2012

Market History
Chester County had a large increase in Settled units, 13.2%, in January 2012 as compared to January 2011. Using that same time frame, Pending units also saw a large increase, at just over 26%.

For more county specific data, check out the Market History Report, which details current and historical information for Single-Family and Condo listings over the last 10 years in Chester County. Single-Family Jan. ’11 Jan. ’12
Inventory 3,278 3,124
Settled Units 242 274
Median Price $300,000 $280,000
Stl Price/Orig Price 91.2% 90.7%
Get this info anytime you login on the Info Center.

• Chester Single-Family Report
• Chester Condo Report

Single-Family YTD Jan. ’11 Jan. ’12
Settled Units 242 274
Average Price $374,000 $321,000
Median Price $300,000 $280,000
Stl Price/Orig Price 91.2% 90.1%

• Single-Family Year-to-Date Report
• Condo Year-to-Date Report
Year-to-Date Market Snapshot
Through January 2012, Chester County has settled 274 units at an average price of $321,000.

This information and more can be found in
the Year-to-Date Snapshot, which contains statistical information for Single-Family and Condo listings recorded within TREND’s 13 primary counties over the last 3 years.

Housing Crisis to End in 2012 as Banks Loosen Credit Standards

01/24/2012 By: Krista Franks

Fed Officials Call for More Housing Fixes

New programs and “housing policy interventions” are needed to help the real estate market rebound and boost growth in the overall economy, three Federal Reserve policymakers said Friday.

The latest statements join a range of calls by the Federal Reserve in the last week urging for more government intervention to help the housing market. Last week, the Fed released a 26-page white paper providing an outline on how the government needs to take more aggressive action to prevent home values from falling further, seek solutions to the foreclosure crisis, and loosen stringent underwriting standards that are keeping borrowers from securing mortgages or refinancing.

New York Fed President William Dudley said on Friday that the housing market is “only one factor behind the frustratingly slow” economic recovery, but it’s an “important one that deserves our attention.”

Dudley said that it’s important for monetary policy to complement actions taken by lawmakers in order to help stabilize home prices and bring about a recovery to the housing sector within the next year or two. He said programs are needed that are aimed at preventing additional foreclosures, easing burdens for home owners in refinancing mortgages, and getting more renters into REO properties.

“Forceful and effective housing policies have the potential to significantly influence the speed and strength of our recovery,” Fed Governor Elizabeth Duke said in separate comments made last week at an event in Virginia.

The Fed will hold its next policy-setting meeting Jan. 24-25.

Source: “Fed Officials Focus on Housing ; Emphasis put on Importance of Sector to Overall Economy,” Bloomberg News (Jan. 9, 2012) and “Fed Officials Push More Stimulus for Housing,” Reuters News (Jan. 9. 2012)

The doom and gloom hanging over the real estate market over the last several years has put downward pressure on home prices throughout the country.  While Florida and the Southwestern United States were hit the hardest in this real estate downturn the Northeast had its fair share of turmoil as well.  If one were to read the prevailing headlines from across the country it would be difficult to gain any positive perspective on the real estate industry as a whole, however, if you narrow your vision to our local market in Southeastern PA and more specifically, Chester County, there has been some very positive signs in the last year which may point to stronger 2012.

Consider the following statistics and their corresponding sources:

• Overall sales activity for Residential properties in TREND’s MLS Coverage Area increased 10% in November 2011 compared to November 2010.  www.Trendmls.com
• In Chester County PA the 3^rd quarter of 2011 saw 15% more sales than the 3^rd quarter of 2010.  www.Trendmls.com
• In Delaware County PA the 3^rd quarter of 2011 saw 19.4% more home sales than the 3^rd quarter of 2010.  www.Trendmls.com
• In Montgomery County PA there was a 24.5% increase year over year for the 3^rd quarter home sales. www.Trendmls.com
• Confidence among U.S. homebuilders rose in December for a third consecutive month, a sign of stabilization in the housing market. www.Bloomberg.com

Chester County residents to see tax increase in U-CF

Residents in the Unionville-Chadds Ford School District will see an increase in next year’s tax bills in Chester County, while Delaware County residents will see a slight decrease. The administration presented a preliminary budget for the 2012-13 tax year which will set spending at $71.6 million. That figure means an increase in millage rates of 3.87 for Chester County residents and an 0.60 percent decrease for Delaware county residents. A mill is a tax of $1 for every $1,000 of assessed real estate value. In Chester County, the millage rate goes up from 24.68 mills to 25.48, a 3.87 percent increase over 2011-12 rates. In Delaware County, the millage rate drops from 21.82 mills to 21.69 mills. The preliminary budget is scheduled for adoption at the Jan. 23 school board business meeting.

Source: Daily Times; 12/14/2011

U.S. Stocks Gain on U.S. Economic Data

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Traders work on the floor of the New York Stock Exchange on December 12, 2011. Photographer: Spencer Platt/Getty Images

U.S. stocks rose, snapping a three- day decline in the Standard & Poor’s 500 Index (SPX), as data on jobless claims and manufacturing signaling a strengthening economy overshadowed concern over Europe’s debt crisis.

FedEx Corp. (FDX) jumped 6.7 percent after earnings beat analysts’ estimates. JPMorgan Chase & Co. (JPM) advanced 1.2 percent as financial stocks gained after Spain sold more debt than it had planned. Novellus Systems Inc. (NVLS) surged 21 percent as Lam Research Corp. (LRCX) agreed to acquire the company. First Solar Inc. (FSLR), the world’s largest maker of thin-film solar panels, led a decline in technology stocks, dropping 4.8 percent.

The S&P 500 gained 0.6 percent to 1,218.83 at 12:11 p.m. New York time, after rising as much as 1.1 percent earlier. The benchmark index for American equities fell 3.5 percent over the previous three days. The Dow Jones Industrial Average added 72.20 points, or 0.6 percent, to 11,895.68 today.

“We do have better economic numbers in the U.S.,” Michael Strauss, who helps oversee about $27 billion of assets as the chief investment strategist at Commonfund in Wilton, Connecticut, said in a telephone interview. “At the end of the day, macro economic news domestically is more important to company valuations than what’s going on internationally.”

Stocks fell yesterday as growing funding stress in the euro area fueled concern that the region is struggling to contain its sovereign-debt crisis. IMF Managing Director Christine Lagarde said at an event in Washington today that the “crisis is not only unfolding, but escalating” and cannot be resolved by one group of countries.

Jobless Claims

Stocks rallied earlier after data on jobless claims and manufacturing signaled a strengthening U.S. economy and Spain sold almost twice as much debt as targeted at an auction. Labor Department figures showed initial jobless claims fell by 19,000 to 366,000 last week, the fewest since May 2008. The median of 47 economists had projected 390,000, according to a Bloomberg News survey.

Two reports showed manufacturing in the New York and Philadelphia regions expanded more than forecast in December. The Federal Reserve Bank of New York’s general economic index accelerated to the highest level in seven months, to 9.5 from 0.6 in November. Readings higher than zero signal expansion among companies in region, which covers New York, northern New Jersey and southern Connecticut.

The Federal Reserve Bank of Philadelphia’s general economic index increased to 10.3 in December from 3.6 last month, indicating expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware.

‘Squaring Valuations’

“Investors are trying to get a sense of not only how the economy is performing but also looking at what happens with policy, what happens in Europe,” Kevin Caron, a market strategist in Florham Park, New Jersey, at Stifel Nicolaus & Co., said in a telephone interview. His firm has about $108 billion in client assets. “You still have some lingering concerns about Europe’s financial crisis. As the market tries to digest all this, it’s looking at squaring valuations with all this new information.”

In Europe, data showed that gauges of manufacturing output in Germany and France contracted this month less than economists had estimated. Services output unexpectedly rose in both countries, climbing to 50.2 in France.

FedEx, the operator of the world’s biggest cargo airline, jumped 6.7 percent to $82.49. The company, considered an economic barometer because it delivers goods ranging from pharmaceuticals to financial documents, posted a quarterly profit that beat analysts’ estimates. It also ordered 27 Boeing Co. 767 jet freighters to retire some of the older planes at the world’s largest cargo airline. Boeing increased 0.9 percent to $70.57.

Banks Rally

JPMorgan added 1.2 percent to $31.88, pacing a 0.6 percent gain among financial companies in the S&P 500. Spain sold 6 billion euros ($7.8 billion) of bonds due in 2016, 2020, and 2021 at a debt sale today, almost double its 3.5 billion-euro target.

Nine out of the 10 groups in the S&P 500 increased, with consumer staples and utilities leading gains, advancing at least 1.1 percent.

Novellus Systems surged 21 percent to $42.08, the biggest gain in the S&P 500. Lam Research agreed to buy the company for about $3.3 billion in stock, valuing it at $44.42 a share. Lam Research fell 3.8 percent to $37.98.

Technology companies were the only group to fall today, declining 0.3 percent. First Solar slumped 4.8 percent, the biggest drop in the S&P 500, to $31.84, after the company was downgraded to “neutral” from “outperform” by Robert W. Baird & Co. MEMC Electronic Materials Inc., the second-largest U.S. maker of polysilicon, erased 5.2 percent to $3.67.

Hedge Funds

Stocks favored by hedge funds fell more than the S&P 500 during the first three days of the week. A Goldman Sachs index of companies that appear most often in funds’ top 10 holdings lost 4.5 percent in the first three days of the week, a period in which the S&P 500 fell 3.5 percent. The index rose 0.6 percent today.

Hedge funds selling assets because of client redemptions may have exacerbated declines for equities and reinforced market volatility, according to Eric Green, a Philadelphia-based fund manager at Penn Capital. His firm oversees about $6 billion.

“The hedge fund exposure continues to go down — it’s year end, they’re squaring positions off, they’re preparing for redemptions,” Green said in a telephone interview. “The volatility is pretty extreme, the market is getting whipped around on nothing and most of them want to shut things down. They probably have to sell more things than buy because they have net redemptions.”

To contact the reporter on this story: Inyoung Hwang in New York at ihwang7@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

Fed Leaves Rate Alone, More Upbeat About Recovery

At its Tuesday meeting, the Federal Reserve reaffirmed its pledge to keep interest rates low and opted to not take any new measures to bolster the economy, saying the economy has already been showing signs of “expanding moderately.” The economy has shown some improvement in employment and consumer spending in recent weeks. However, the Fed cautioned at Tuesday’s meeting that the “housing sector remains depressed.”

In reaffirming a pledge it first issued in August, the Fed said the federal funds rate — which serves as a benchmark rate for many types of loans, including mortgages — will remain near zero until mid-2013. The Fed said it will continue with plans to move $400 billion of its bond portfolio into longer-term securities, which ultimately could send long-term interest rates even lower.

Overall, the Fed said the economy has steadily been showing signs of improvement and is on track to post its strongest gains of the year in the final months of 2011. But the Fed said that the European debt crisis will continue to pose a major threat to recovery with “strains in global financial markets continue to pose significant downside risks.”

Source: “U.S. Fed Leaves Rate Unchanged, Says Economy Expanding Moderately,” Bloomberg News (Dec. 13, 2011)