Centre County homebuyers are waiting longer, paying more as red hot market continues

After a nonstop year, Centre County’s hot real estate market shows little sign of slowing down.

The shift to remote work from the COVID-19 pandemic combined with low interest rates and low market housing supply have fed what local realtors are calling a “seller’s market,” which is also something of a national trend. Housing prices nationally are now the highest ever, surpassing even the 2006 housing boom before the economic crash, according to news reports.

“Since May of last year through July (2021), there has not been a slow month,” said Kristin O’Brien, president of the Centre County Association of Realtors and a realtor with Keller Williams Advantage Realty.

In the period between January and August of this year, sales conducted by members of CCAR were up 13% from the same period last year, according to CCAR data. And the average sale price of a house in Centre County and surrounding environs shot up to roughly $294,000 this year from about $265,000 last year, according to those figures.

Buying frenzy sparked by pandemic

When Centre County “reopened” nonessential businesses in May 2020 following a shutdown order from Gov. Tom Wolf aimed at mitigating the spread of COVID-19, O’Brien said the local market was flooded with new buyers.

In the first three weeks after the reopening, O’Brien said, she put 26 homes under contract. And low housing supply was pushing up the prices. “Some houses were getting $10,000 over, $40,000 over,” she said.

“What was happening was people who had backing — backed money — they were buying property over full price, whether it was cash, or borrowed money, or waiving all inspections and basically saying, ‘I’m taking the property as is,’” said Scott Yocum, owner and founder of Yocum Real Estate Centre, who has been in the business for 34 years.

Yocum said his own son, who moved to Centre County during the pandemic and now works as a realtor, waived all his inspections and paid over asking price for his property in Patton Township after only touring it by video. The property, located in the State College Area School District, had seven other offers on it, he said.

Who is buying homes in Centre County — and where?

According to CCAR data, nearly all areas of Centre County upped their housing sales from 2020, save for Bellefonte, which saw a slight dip. Properties in the Bald Eagle Area School District spent on average the fewest days on the market, at 25 compared to 53 days last year. Properties in the State College and Bellefonte area school districts spent on average 31 and 39 days on the market, respectively, and both districts saw the highest total sales this year. Both areas also have less than one month’s supply of housing, while all other areas of Centre County have over a month’s supply of housing, according to the data.

O’Brien said the data is helpful, but doesn’t always tell the full story. She doesn’t know why properties in Bald Eagle area sold so quickly, but said in her experience, buyers seemed to have a lot of interest in properties there with a lot of acreage.

Properties in more rural areas of the county like Bald Eagle and Penns Valley also saw their average housing price increase significantly, according to CCAR data. The average sale price of a property in Bald Eagle increased to roughly $237,000 from about $196,000 last year. Penns Valley boasts the second-highest average sale price behind State College at $290,600, up from $251,800 last year.

First-time homebuyers and those with unconventional mortgages or small down payments often found themselves struggling to compete with all-cash offers or buyers that chose to waive all their inspections, realtors said.

Buyers are staying on the market longer, too, because not as many houses are going up for sale, said O’Brien. In the pre-2020 market, buyers might look at an average of 12 homes, make a few offers, and get one accepted in a few weeks, she said. But starting in 2020, she said, buyers could look at 30 homes and make eight offers over the course of several months before getting one accepted.

Typically, O’Brien said, a five months’ supply of housing is what realtors call a “balanced market.” Centre County currently has less than one month’s housing supply, according to CCAR data. That means that if no other homes were put on the market, all the inventory would be sold off in less than a month, she said.

Centre County’s market is a mix of investors looking for multifamily, commercial properties and individuals and family units looking for residential single family homes, said Yocum. He’s seen many people move into the county over the past year and half — some having accepted new jobs in the area, and others of retirement age hoping to be closer to children or take advantage of Happy Valley’s amenities.

O’Brien said Penn State alumni are also moving back to the area in significant numbers — some are buying second homes, but others are hoping to trade in expensive city life for the affordability of Centre County. Remote workers are also taking advantage of career flexibility and choosing the area or moving back, she said.

The market appeared to slow down a bit, realtors said, especially when August rolled around. Instead of 10 offers on a house, sellers were starting to see two or three, O’Brien said. But now that September is in full swing, she said, it does appear to be picking back up again.

Yocum said he believes the market will continue to be very stable over the next 18 months, as long as interest rates stay low and workers are able to keep their jobs amid the ongoing COVID-19 pandemic.

O’Brien said she doesn’t want to scare new buyers or discourage them, though. “Depending on what you want and where you want it, there are still good opportunities for buyers. There is some hope.”

This story was originally published September 26, 2021 at 6:00 AM.