Cherry Hill Housing Market
by: JIM STURDIVANT
6/9/2006
As the housing market continues to cool after years of furious activity, local real estate agents are adjusting to a more sedate environment suddenly bereft of bidding wars and speculation – yet most agree reports of a healthy market’s demise are greatly exaggerated.
In Cherry Hill, as in many other South Jersey communities, rising inventory is key evidence of a slowdown, as is the length of time homes are spending on the market, according to Glenn Petsch of Coldwell Banker Realtors.
“At the peak, we had multiple bids within a few days of listing a home,” he said. “Now we need to be looking at longer terms” – 30 to 60 days or more.
That means more options for buyers, who no longer need to be as concerned about moving quickly on a purchase or entering into bidding wars over desirable properties.
While an actual downturn is not expected, sellers can’t simply throw out any price and expect a quick sale, Petsch said.
“Basically, we’re seeing a stabilization. After three to five years of double digit (price) increases, we’ll probably see more of a 4 to 5 percent now.”
Cherry Hill’s housing market exploded during the period from 2001 to last year, with average home sale prices rising by as much as 11 to 13 percent a year, according to figures from the Multiple Listings Service provided by Petsch.
At the market’s height, about 12 to 18 months ago, a seller could ask $20,000 above the recent sale price of a comparable home and be able to choose among buyers.
“It was a crazy market,” Petsch said.
Things are very different in 2006.
“People are going to start seeing more (for sale) signs, and they will see signs up for a longer period of time,” he said. “As the inventory increases, what has historically been the best seller’s market ever will become a standard, stable market.”
What’s happening in Cherry Hill fits within a larger trend.
“It’s (now) a normal real estate market,” said Mark McKenna, a real estate agent in Marlton. “Fantasyland is over. I tell my people, ‘You are no longer an order-taker. You have to start being a salesperson again.”
“The one thing that sellers have to stop doing is saying ‘I want to test the market.’ You can’t test the market anymore. You have to be aggressive right out of the gate.”
Homes that Petsch describes as “overlisted” – priced too high and not prepared for a good showing – are being listed and subsequently pulled off the market, a phenomenon unheard of at the height of the housing boom. In response, Coldwell Banker is dusting off it’s “Blue Ribbon Preferred” program for sellers, which it initiated in 1999 but had little need for in recent years.
The program functions as a sort of preparation and makeover course to help sellers show their homes well and be ready with incentives like home warranties and appraisals before jumping into the market.
“You have to stage your property again” in order to make it attractive to a buyer, Petsch advises.
Petsch shops short of calling the new environment a buyer’s market, however, characterizing it as “transitional.”
As the market cools even while prices continue to increase, albeit at a much slower pace, “people can catch the edge of the wave on both sides,” he said.
“People read the news reports (about market downturns) and think they’re losing money,” Don Seymour, a broker in Voorhees, said. “They’re not losing anything. They will still make a lot of money; things have just leveled out a bit.”
Because most sellers will have bought their homes before the recent spike in prices, they will have no problem seeing a good return on their investment. The key, Seymour said, is for sellers to adjust their thinking to reflect current market conditions.
“You can’t ask these astronomical numbers and just throw a house out on the market and expect it to sell,” he cautioned.
Rising interest rates are not currently having a great impact on the market, Petsch said, given that rates are still quite low by historical standards. Rising rates are, however, putting the squeeze on those who bought homes with adjustable rate mortgages during the housing boom and are now seeing their monthly payments go up.
With this in mind, Petsch advises buyers to choose a lender with care.
“Get true pre-qualifications from reputable, local lenders and check all applicable fees,” he said. “The Internet is not the answer all the time.”
Overall, Petsch remains bullish about the local housing market, noting the relative stability of housing prices and diversity of the South Jersey economy, which insulates the area from downturns in any one job sector.
“Because we didn’t see the extraordinary growth of the shore and northern New Jersey, we should not see the same downturn that they are seeing right now,” he said.
“We should stay stable because of the type of economy we have. Our pricing should stabilize, but not decrease.”
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