As realtors living in and focusing on the Palmyra area, Carin and I have seen an incredible increase in Palmyra area home values and the respect that people from the local area and afar give to the town of Palmyra and its school system. Those local to the Palmyra area will remember years past when Palmyra was thought of as the "cheap Hershey" where home buyers could be close to Hershey but not have to pay "Hershey prices". Being just a little farther east of Harrisburg and not in Derry Township made Palmyra less in demand and consequently cheaper in price; but not anymore.
The chart below will show the changes in sale price for 4-bedroom single family Palmyra homes from 2000 through 2021 and even so far into 2022. There are three periods that really stick out on this chart. There were housing 'booms from 2000 to 2006 and again from 2018 to 2022 where home values increased at incredible rates. Then, of course, home values reversed temporarily amid the housing crisis, circa 2008-2010.
In 2000 (as far back as our current MLS archives sale data exists), 4-bedroom Palmyra homes sold for an average of $176,913. Just 6 years later, that number soared to $312,766. Then, it took 10 years after the housing crisis to recover those values. Most recently however, in the past 4 years (from 2018 to 2022), Palmyra home values (and even rental rates) have again increased at a very rapid rate - moving from $315,754 in 2018 to $408,011 in 2022. But what's causing the boom?
I attribute the recent Palmyra housing boom to a couple of things. First, the Palmyra school system has gained a lot of respect and is now one of the most sought after local 'east shore' school districts along with Derry Township and Lower Dauphin. People now want to live in Palmyra and want their kids to go to Palmyra school district. Second, there is a lack of inventory. Since the completion of Arbor Green in North Londonderry and a very small subdivision in South Londonderry called Lyndel Court, there has been very little new construction. In addition, record low interest rates have allowed many home owners to refinance their mortgage rates to 3% or even lower, effectively recommitting to their home in the process. The lack of new construction and resales coupled with increased demand for the area and school system naturally has led to increased competition for homes and in turn higher sale prices. The Covid-19 pandemic has farther exacerbated the supply/demand issue as many people are gaining the ability to work from home and are retracting from the big cities to be closer to family or in lower cost areas with better school systems. Now, we have increased demand on decreased supply, a catalyst for higher prices as defined by simple economics.
How long will this last? Well, that’s anyone's guess. As I type this blog entry, two things are happening that could have some impact on the local Palmyra housing market.
First, interest rates are rising. While interest rates hovered +/- 3% for much of 2021, they have doubled in the first 6 months of this year and now sit at over 6%. While demand is still there, the higher the interest rates on one's loan, the lower their purchasing power - dictating that they pay more monthly for the same house or have to purchase a home at a lower price to stay within their monthly budget. While rates have been much higher than 6% in history, the speed at which the rates have moved has been concerning. Many of the same buyers who were pre-approved for a mortgage at 3% just 6 months ago were not fortunate enough to find a home. Now they are shopping with a 6% pre-approval and seeing their payment much higher or buying power much lower than it was before. This rapid change has led some prospective home buyers to sit on the sidelines - hoping that rates will soon fall, which could prove to be an expensive gamble.
Second, there are two new subdivisions (actually three long-term) on the horizon. Landmark Homes is currently developing the land to house "Winding Creek" a 55+ planned community for senior living. This North Londonderry (Palmyra area) neighborhood will contain 300+ homes at completion and fill a much needed 55+ living gap in the area. Next (also being developed by Landmark Homes) is the soon to come subdivision of Summer Layne. This neighborhood (also in North Londonderry township - Palmyra schools), will contain a couple hundred single family homes for homeowners of all ages. Lastly, S. Gerald Musser builders has purchased the Olde MacDonald farm in nearby North Londonderry township (also Palmyra schools) and will ultimately build close to 100 single family homes there.
How will these new neighborhoods affect Palmyra home values? I argue that resale prices will be driven higher as the new homes in the new subdivision will likely come with average sale prices significantly over the average. With these homes outpacing the average market price, existing home prices may rise to be close to or nearly equal those prices as the resale homes are fully completed homes and ready now. There is some risk in the construction of 500-600 homes in the same small area saturating the marketplace, but I feel Palmyra has needed additional home inventory for over 5 years now and there is certainly pent up demand. It would have been nice if the new neighborhoods would have been built during the time that home buyers could have secured 3% mortgages, but unfortunately that didn’t happen. Ultimately however, these new neighborhoods should bring more demand to the area. Historically, I have seen approximately half of home buyers of new home communities such as these come from within the community and half from elsewhere. Nonetheless, 500-600 new homes will bring hundreds of additional resale homes and/or rentals to the market and with them an increase in population including school age children. This could be an opportunity for Palmyra to have another real estate boom but could also be a challenge as along with a population boom comes risk to our school system and infrastructure within the community. I believe this risk would be magnified if the new homes were built very quickly, but Landmark has a relatively slow build process and can only build a finite number of homes per year - so these two neighborhoods will surely be completed over a number of years - I think this time delay alone, along with our current pent up demand for new homes in the area will allow demand to remain high for the new construction homes and resale homes alike. I guess time will tell. One thing I do know for sure is the demand for townhomes and rentals in the area is real, and unfortunately for now, there are no townhomes planned in these three new subdivisions.
If you are thinking of building your next home in the new Palmyra subdivisions of Winding Creek or Summer Layne, contact us at 717-679-2200 to learn more. Having a buyers' agent by your side throughout the process will likely save you time, stress, and money.
Average Price of Single Family 4 Bedroom Palmyra Homes