Is Now a Good Time to Buy a House in the Poconos?

Some may doubt my answer. It is, after all, given by a real estate agent whose income arguably depends upon her ALWAYS responding with a resounding 'YES!' when asked this question.

However, I have not earned the status of Trusted Agent by so many of my clients and neighbors by giving out self-serving advice. So, even though my answer is, indeed, 'yes,' please keep reading as you just might a) learn something about the real estate market, and/or b) find that even an evil, money-hungry agent can tell it like it is.

Either way, I've achieved my goal :)

So, yes, now is a good time to buy a house in the Poconos. And here is why:

1. Pennsylvania is not one of the 5 states driving the media's hysterical headlines about the housing crisis, the subprime mess or whatever other base topics threatening our confidence in real estate investment anywhere. Simply put, real estate markets are local and national news coverage must be ignored in favor of facts, statistics and anecdotal evidence from your target area. PA has never been and is not currently a volatile market.
2. The big-money investors are still investing here. A drive around Monroe County will reveal an incredible amount of money being spent on development and commercial projects all over the place. This kind of investing does not get done without feasibility studies, projections, etc. So what do they know that you don't know? That this is a desirable area and that the demand-well is not drying up.
3. There are plenty of choices out there. Hey, it is springtime so listing inventory is up. Better still, the 'passive-sellers' (those non-urgent owners who listed while the market was hot and were testing the market) are just about weeded out as contracts expire and these dreamers and their agents come back to reality. So you should now be seeing more homes available at the right prices.
4. Dan Green says, "Stop asking your real estate agent if now is a good time to buy." and offers some advice from the mortgage advisor's point of view that makes a lot of sense and has nothing to do with local real estate market conditions. The changing mortgage lending environment should be enough to encourage prospective home buyers to finally take the plunge...this year, before the pendulum swings completely the other way and mortgages get increasingly trickier to obtain (in other words, lenders' CYA policies become buyers' PIA!).

And if you are still skeptical...scared...worried or whatever, check out this article which explains the psychology of a real estate market and how one should evaluate the one that they are in.

Finally, if you have questions or need some information, just email me...I promise I will respond quickly!

Comments

[tom]

With all due respect, everything you just said here is patently false!

1) The market is fundamentally different now -- what with the subprime mortgage catastrophe and the record foreclosure rate in the Pocono area. Oh, and there are the numerous scandals that rocked the area involving homebuilder/financier collusion in overpricing homes to those seeking refuge in the Poconos from the unbearable real estate bubble exploding elsewhere across the country.

Indeed, even as the Northeast has weathered the burst of the bubble relatively well over the last year, the latest new home sales shows a nationwide decrease in new home sales of 1.8%, HOWEVER, the Northeast suffered a massive blow with new home sales collapsing 41% in the month of February 2008.

2) To say the bursting bubble hasn't affected the area is ridiculous. LTS, the region's largest builder, cut their staff by a shocking 50% in February of 2007 and other builders I've spoken with say they've followed suit with similar numbers over the past year.

3) Due to the subprime catastrophe and the associated $200-$300 billion in Wall Street write-offs, the pool of available home buyers was just whacked in a big way, meaning the net demand for new and existing housing will forever be mitigated relative to past years.

4) Existing homes are at decade high levels of 10-11 months of inventory.

5) Home owners are unwilling to admit that they took a shocking hit to their overall wealth and thus would rather hold onto their devalued home than admit that their home is worth less than they paid for it. Thus, they are unwilling to drop the price until desperation requires them to hit the best offer they can find.

6) And most importantly, traditionally, housing downturns persist for 4-6 years. We have, at best, completed the first of those years.

Bottom line, you ain't seen nothin' 'yet.

Now is not the time to buy... regardless of what your 'trustworthy' real estate broker tells you.

[Lisa]

Thanks for stopping by, tom - I appreciate your interest and your readership!

To address your concerns:

# 1 doesn't seem to be relevant to me but without knowing where you get your figures it is tough to address it.

#2 I did not say the area wasn't affected. We have certainly experienced a slowdown but home values are holding steady and even increasing (albeit slower). And remember that I am talking about resales. New construction is its very own animal.

#3 'Relative to past years' is the key here. We will be hard-pressed to EVER experience the heyday of the past few years. Regardless, this point you made actually supports my point that it is a good time to buy...fewer buyers means less competition for homes, no?

#4 Again, this supports my point. More homes = more choices = good for buyers.

#5 This may be true of some sellers. But all this means is that it is important to hire the right agent to help you weed through the inventory and find the good buys.

#6 This assumes we agree that the Poconos is experiencing a downturn. I believe we are experiencing a slow down based on poor consumer confidence driven by the media's distortion of the problems that affect a minority of areas across the country.

Keep your chin up, tom, things are not that bad!