The pickings are slim if you are looking for a home in Berks County between $150,000 and $300,000, and it has county officials concerned ahead of an anticipated influx of young professionals.
The Drexel University College of Medicine at Tower Health is scheduled to open at The Knitting Mills in Wyomissing for the 2020-21 academic year.
"That is going to bring in a lot of younger professionals, and right now, I don't know if there is any housing available for them to rent or buy," said Mark Mohn, 2019 president of the Reading-Berks Association of Realtors.
He recently checked listings of all types of homes, including foreclosures, fixer-uppers, distressed, new construction, single family homes, mobile homes and townhouses, all within the $150,000-$300,000 range, and he found 390 units for sale. But of those, 379 were going into closing or pending sales. The difference: just 11 homes were unspoken for.
"There is such a demand for inventory. The inventory numbers are well below what they should be coming out of summer," Mohn said. "There is an incredible amount of competition from other buyers. If buyers need assistance with closing costs, that makes it difficult. They may have to go higher in price then they wanted to go."
Current listings in Berks County are moving within days.
"Two weeks seems like a long time to be on the market right now," Mohn said. "If a house lasts on the market longer than two weeks right now, there is a problem with it."
He said homes that are priced properly are moving quickly and sometimes buyers unable to make a quick move end up renting until they can find a house that is affordable and attractive. That is flooding the rental market.
The trend of rising prices and falling inventory has been continuing all decade.
The county planing commission has taken note of what Mohn calls a housing crisis: high demand and low inventory.
"Since the market downturn back in 2007-2008, not a lot of new housing has been built in the county. Specifically not a range of housing," said Shannon Rossman, director of the planning commission.
There have been some buildings converted into apartments in the city, but most of the apartments built outside of Reading have been high end, over $1,500 a month in rent, Rossman said. It's not something someone fresh out of college or a downsizing retiree can afford.
"Most of what is being built with single family homes is over $250,000. We don't have a lot of the kind of homes people will downsize into or that people will purchase as their first home," Rossman said.
Buyers won't have much luck finding newly built townhomes or duplexes in the $150,000-$250,000 range either, she said.
"It's one thing to buy a house that needs some paint and a little bit of work, but a lot of people don't have the time, money or skills, to renovate a house. They are looking for something that is ready to go," Rossman said.
Affordable renovated homes are as hard to find as new homes in the $150,000-$300,000 range in Berks County.
Mohn says the ideal price range is $185,000 to $225,000.
"The average sale price in Berks across all municipalities and all home types is getting closer to $200,000," Mohn said.
Looking for answers
"Nobody is building those homes and we are trying to figure out why," Rossman said.
Around 2008, Berks was in a building boom, peaking with more than 2,000 new housing units in a year across all municipalities. Today, that's down to about a quarter of that amount, with many of the homes scattered across the county, and a lot of custom houses being built.
Unlike surrounding counties, new home construction in Berks has been in a slump. Rossman said housing construction in Lebanon and Lancaster counties has improved in recent years, but not in Berks.
In the in last 63 months (just over five years) only 37 new construction homes in Berks County have sold in the $150,000-$300,000 range, Mohn said.
"New construction is at an all-time low," he said.
"Only 14 new construction homes (in all price ranges) closed in the last two months," Mohn said. "There is zero quick fix for it. The best way for the county to tackle this is to have new construction in that segment and find municipalities willing to amend zoning to have higher density. Townhouse communities would be far better than detached homes. "
The planning commission is studying the problem by first looking at current density rules in all municipalities. Density — the minimum size of a lot in residential zoning — affects profit for builders.
If a neighborhood requires one acre lots for single family homes, the land is more expensive and the builder must charge more. A five family townhome provides more housing and enough profit for builders.
"We've got to get to the right density so that developers can make money and that people can have houses on the market," Rossman said.
The commission will also look to see if public sewer and water is available near higher density parcels.
Depending on what the data shows, the commission may recommend more municipalities consider higher density in some areas.
"We have jobs available and we need people to fill those jobs. We need to attract people to Berks County and we've got to have someplace for them to live," Rossman said.
A builder's view
Walter Greth, president of Greth Homes, says governmental officials need to look in the mirror to determine the cause of the slump in new construction in Berks.
"There are some being built but it's few and far between," he said. "It's property taxes and the cost of putting improvements in."
They're asking so much that you can't buy a lot and improve it and build an afforable house. You couldn't take the risk, and the bank wouldn't let you."
Lancaster County is on fire, he said, noting as well that new construction continues around Berks.
"Everywhere is less (costly for builders) than Berks County," Greth said.
Existing houses are still selling because the property taxes are lower.
Greth built many houses last decade.
"It's depressing when you look at what it was and what it is now," he said.