Lackawanna County Multi-Family Market Trends

When looking to invest in a specific market, it's important to understand where it's at and what it's doing. 

I would like to discuss the correlation between several important real estate metrics that will be of great interest to all you buyers out there. These metrics are crucial in understanding the current state of the real estate market and can help you make informed decisions when it comes to purchasing a property.

Let's start by examining the "Months Supply of Inventory," which currently stands at 1.12. This metric represents the number of months it would take to sell all the available homes on the market, given the current sales pace. A lower number indicates a seller's market, where demand exceeds supply, and vice versa. With a low inventory supply, it suggests that there is high demand for homes in this particular market.

Next, let's look at the "12-Month Change in Months of Inventory," which shows a significant decrease of -54.1%. This means that over the past year, the number of months it would take to sell all the available homes has decreased by more than half. This indicates a rapidly shrinking inventory, which further emphasizes the strong demand for properties in this area.

Moving on to the "Median Days Homes are On the Market," we observe a remarkably low figure of just 15 days. This metric represents the average number of days it takes for a home to go under contract from the day it is listed. A lower number suggests a fast-paced market where homes are being snatched up quickly. In this case, it indicates that properties are selling at a rapid rate, reinforcing the notion of a seller's market. It is important to note that in my opinion, this number is actually skewed in comparison to single family homes in our area. Reason being, showing tenant-occupied properties often comes with listing them days in advance with only certain showing times allotted to allow for proper notice and preparation of multiple parties. Many times in that 15 day window, there would have only been 3-4 showing increments.

Now, let's discuss the "List to Sold Price Percentage," which currently stands at 97.9%. This metric indicates the percentage at which the final sale price of a property compares to its initial listing price. A higher percentage suggests that homes are typically selling very close to their list price. With a percentage of 97.9%, it implies that buyers may have less room for negotiation, as sellers are achieving their desired price more often.

Lastly, we come to the "Median Sold Price," which currently stands at $175,000. This metric represents the middle value of all the sold prices in the market. It provides an overall snapshot of the pricing trends in the area. With a median sold price of $175,000, it suggests that the market is relatively affordable, providing potential buyers with opportunities to find properties within their budget.

In summary, the correlation between these real estate metrics paints a clear picture of a competitive seller's market with a high demand for multi-family homes. The low months supply of inventory, coupled with a significant decrease over the past year, indicates a shrinking housing stock. The short median days homes are on the market further emphasizes the fast-paced nature of this market. Additionally, the high list to sold price percentage suggests that sellers are obtaining prices close to their asking price. Finally, the relatively affordable median sold price of $175,000 indicates that many buyers will still find properties within their desired budget! Just because a market has changed, doesn't mean it's all bad! The Scranton, PA market is still an insanely good place to invest in relation to capital needed and returns provided, especially compared to other metropolitan areas. 

As buyers, it is crucial to be aware of these metrics and understand the current real estate market conditions. Armed with this knowledge, you can make informed decisions and navigate the market effectively. Remember, it is always advisable to work with a professional real estate agent who can provide you with further insights and guide you through the buying process, and I am happy to do so!

Kate Daye Ruane

Associate Broker, ERA One Source Realty

Investment & Property Management Specialist

kate@theKDRteam.com