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Elk County a buyer's market for homes

November 14, 2011

Photo by Colin Deppen - A reduced-price "for sale" sign sits in the yard of a home in St. Marys, where local realtors cite a depreciation in property value. Area realtors say that property values in the area have depreciated, resulting in a buyer-oriented market.

ST. MARYS - While Elk County was not spared by the national housing crisis, local realtors say that comparatively it has fared better than other parts of the country. While certain realtors cite an increase in sales in recent years and others a drop, there is a general consensus that property values in the area have depreciated, resulting in the confluence of a buyer-oriented market.
According to the National Association of Realtors, pending home sales nationwide declined in September, but activity has increased since this time last year.
In addition, the Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, fell 4.6 percent to 84.5 in September from 88.6 in August, but is 6.4 percent higher than September 2010, when it stood at 79.4.
The PHSI says that the Northeast has seen a 4.7 percent drop down to 60.6 in September, but maintains that this is still 4.0 percent above a year ago.
Leah Whiteman, broker/owner of Elk County Real Estate in St. Marys, which opened its doors at the peak of the housing crisis, expressed optimism, saying that locally, market activity is up from the year prior. Whiteman said her company has "tripled what we did in 2008 and this year has been a big year for us."
David Larkin, a sales associate also with Elk County Real Estate, said the number of sales has risen this year.
"It seems like we've been a lot busier in general...It's not as good as it could be, but there is a lot more activity this year," Larkin said.
Larkin said Marcellus Shale activity has led to a spike in rental property activity, with investors "jumping on, taking advantage of buying up rental properties in anticipation that we're going to get hit really hard with the Marcellus Shale people."
He added that while market activity has been consistent and on the rise in parts of the county, property values have continued to depreciate, creating conditions unfavorable to most sellers but enticing to buyers.
"Values have dropped, not as drastically as other places in the country, but we have seen a slight decrease. I don't think our [Elk County's] prices were as inflated as a lot of those other areas to begin with," Larkin said.
Whiteman said currently her numbers show the median home sale price in Elk County as being $72,800 and that she has charted appreciation as being 89.28 percent of the original list price, resulting in a depreciation of approximately 10 percent.
Cathie Bauer, broker/manager at Anderson and Kime Realty in St. Marys, said she has not seen a boost in sales and rather they have remained more or less static.
"Our numbers of homes being sold remains constant, the numbers from my 2010 year-end report really haven't changed that much. Until now we have had a decrease of about 20 percent since 2005 and 2006, when everybody could get a mortgage. The last four years our numbers show a 20 percent decrease in closed sales, that's across the board in all of Elk County," Bauer said.
Bauer said the decrease is the result of potential buyers finding it more difficult to procure mortgages now, and buyers are suffering from lack of job security and reduced incomes. She added that while buying power has decreased, interest rates are at record lows and therefore financing is now a better option than years prior.
"They will never be better than it is now because no economic predictors are saying that these rates are going to go lower. So you can get a whole lot more house at 4 and 4.5 percent than you can if interest rates rise to 6 or 7 or higher," Bauer said.
Bauer said in Elk County, the local market shifted from belonging to sellers to catering to buyers long before it did nationwide.
"The housing crisis with regards to the depreciation in values started here much longer ago than it did nationwide, for different reasons that are local. Every market is different. We've noticed across the board that values have been compromised over the past four or five years," she said.
Bauer said that in the early 1990s, the local market appreciation was especially robust, with a lot of transports from the northeast who had sold "very expensive properties there and were willing to pay premium prices for properties here."
Bauer said higher-end homes are still selling, even though there is no longer the influx of middle- and upper-management people belonging to the various industries.
"We see very few people coming in, in that middle and upper income. Most are sold to locals moving up rather than people coming into the area," Bauer said.
Bauer added that the area has experienced a decrease in population and in turn there are fewer buyers in the market.
Larkin also said that there seems to be more people moving out than moving in and that those coming in are not necessarily sticking around.
"A lot of people moving into the area in the last few years, mostly were looking for rental properties. I've seen where some of those people who moved in have left already," Larkin said.
In the current market, Bauer cautions those who are considering selling their home, but waiting for it to become a seller's market, might end up waiting a long time.
"I personally don't see that happening unless something remarkable happens in our area, like a new business hiring hundreds of people and bringing people in from the outside. I think we've been going down this road for a long time and I don't see it changing, so my thought is capitalize on it now while buyers can get low-interest mortgages," Whiteman said.

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