Southeastern PA - Spring/Summer PFR Chairman’s Report
The Chairman’s Report A Message from Lawrence F. Flick, IV, Chairman and Chief Executive Officer Prudential Fox & Roach, REALTORS® and The Trident GroupSPRING/SUMMER 2012 REGIONAL EDITION: SOUTHEASTERN PENNSYLVANIA THIS IS NO MIRAGE The good news keeps getting better, and the signs are Affordability very real — our country’s economic recovery is not a Home buyers have more purchasing power than ever mirage that will disappear before our eyes. Our before. The combination of low interest rates and home economy has strengthened and our real estate market prices make this a once-in-a-generation opportunity. is heating up. Because the key indicators have changed gradually over an expanded period of time, it hasn’t Favorable mortgage rates always been clear that we were headed in the right Mortgage investors believe that this recovery is direction. Caught up in the daily news of stops and real and that means there is only one way for rates starts, highs and lows, it’s been easy to lose sight of to go — up. We’ve seen rates creep up already in the where we were headed. But now we can see that the past several weeks. Though overall mortgage rates are upturn is real — this is no mirage! projected to remain low, they will not be as favorable in the future as they are now. OUR REAL ESTATE MARKET Growth in the number of sales If your personal circumstances dictate a move… if you Pending sales in our marketplace have grown at a want to buy a new home… if you want to sell your positive rate each month since April 2011. And home, now is the time to move forward. For buyers and through March 2012, the number of pending sales is sellers, it’s important to push ahead. If you’ve been approximately 20% over what they were in 2011, holding off because of uncertainty or for “better” significantly exceeding our expectations. market conditions, consider this: 1
Level house prices Growing consumer confidence House prices have stabilized. Moody’s Analytics shows Consumers are spending again. Their debt is more house prices leveling out in 2012 and beginning to manageable, and they feel better about their jobs. The rise in 2013. Although prices have come down over Conference Board’s Consumer Index measuring current the past five years, housing has continued to be a solid conditions is at its highest level since 2008. long-term investment. Strong manufacturing growth THE ECONOMY It was manufacturing that kick-started our national If you’ve read previous issues of my Chairman’s Report, economy’s upward trend. As economist Joel Naroff says, you know I’ve been positive about the economy and our “The manufacturing sector is the rock on which the real estate market for the past two years. There was good recovery is being built and the base is as stable as it gets.” reason to be so. The economy was growing, and the real estate market in our region was more stable than in other Rising employment areas of the country. Then the economy struggled to As more businesses begin to hire, the unemployment withstand the effects of the Japanese tsunami, the Greek rate has dropped, despite more job seekers entering debt crisis and the Arab Spring. These unexpected the market. non-local events fostered uncertainty and made both businesses and consumers wary to move forward. But the Job growth is stronger than it has been in recent years. situation is different now. After nearly three years of slow Between February 2011 and February 2012, the yet steady growth, the economy has gained serious economy gained two million jobs. In the past three momentum. I believe there is enough traction now to months, 734,000 jobs have been added. Compare deflect another unexpected event, including higher gas this to 2009, when the country was losing 750,000 jobs prices. All of the current indicators are strong: per month!2
After nearly three years of slow yet steady growth, the economy has gained serious momentum.Recovering stock market search even though they wanted to make a move. ButThough they still experience ups and downs, today, these buyers are venturing beyond initial interest.the Dow, NASDAQ and S&P have all made They are setting up appointments, attending openconsiderable gains in the past two years. houses, and making offers! In fact, many of our sales associates report that sellers whose houses are inWHY BUY NOW? excellent condition and priced right are receiving multiple offers. We haven’t seen that in quite a while.There hasn’t been a better time to buy a home in ageneration! The combination of low interest rates and THIS IS NO MIRAGEleveling prices create a very real market conditionfavoring buyers. Though the rise in interest rates and What we are seeing is real — it’s clear — it’s no mirage.house prices will not be dramatic, they will undoubtedly If you’ve wanted to move, now is the time. Don’t delay.rise. Therefore, if your circumstances warrant a change, Contact your Prudential Fox & Roach sales associateyou will want to benefit now from today’s positive and your Trident mortgage consultant today!trends. Otherwise, you may look back in a year andrealize you missed your best purchasing opportunity.WHY SELL NOW?The best reason to sell now is to take advantage of the Lawrence F. Flick, IVpent-up demand being unleashed as our economy Chairman and Chief Executive Officerstrengthens. Many potential buyers had postponed their Prudential Fox & Roach, Realtors® and The Trident Group What we are seeing is real — it’s clear — it’s no mirage. If you’ve wanted to move, now is the time. 3
AN INDEPENDENT VIEW Joel L. Naroff, Ph.D., is the rate has generated renewed consumer optimism and President and founder of spending is rising. While the surge in gasoline prices Naroff Economic Advisors. is reducing household purchasing power, unlike 2008 He is a consultant to and 2011, the economy is strong enough to absorb the hit without slowing sharply. The outlook is for Prudential Fox & Roach, the economy to accelerate as we go through the rest Realtors and The Trident of the year. Group. A nationally recognized economic The improving economic landscape has significant forecasting expert, Joel was implications for the housing market. Prices have stabilized and in many areas they are starting to rise, awarded the Lawrence Klein though slowly. At the same time, interest rates are Award for Blue Chip forecasting excellence and was the moving upward, reflecting the better business Bloomberg Business News top economic forecaster in conditions. The combination of higher mortgage 2008. In 2007, he received the National Association of rates and stable or even rising home values should Business Economists Outlook Award and was named the create a change in the strategy of buyers. Once they top economic forecaster by MSNBC in 2006. recognize that both prices and interest costs are going to increase, fence sitters will have to move more Both the national and regional economies are quickly. Given how affordable homes are currently, beginning to pick up speed. Job growth has been now would be a great time to get serious about strong with almost every type of business in all purchasing a home before the rising costs really begin industries adding workers. The falling unemployment to kick in. An independently owned and operated broker member of BRER Affiliates Inc. Prudential, the Prudential logo and the Rock symbol are registered service marks of Prudential Financial, Inc. and its related entities, registered in many4 jurisdictions worldwide. Used under license with no other affiliation of Prudential. Equal Housing Opportunity.