Houwzer’s Senior Economic Advisor, Dr. Kevin Gillen, has released his Q2 housing market report for the Greater Philadelphia region. This quarter saw positive market activity across the region, and particularly in the suburbs. Here’s what the second quarter looked like in terms of inventory, sales activity, and housing prices.
As the number of available homes continues to drop, the region has remained locked in a “seller’s market”. With a 2.1 month supply of homes in the city and a 3.4 month supply in the suburbs, both are considerably below the 5 month threshold that indicates a balanced market.
- Inventory: At the end of June, there were only 19,368 houses listed for sale. For reference, that’s about 4,000 less homes listed than in June 2017 and almost 8,700 less than there were five years ago.
Even with low inventory, this quarter had the highest sales volume in 13 years. The number of million dollar homes sold in the region (278) is still hovering around the all-time high (280). And it’s not just the volume of sales that is surging, but also the speed of those sales.
- Home sales: There were 25,820 homes sold in Greater Philadelphia in Q2 – the most since Q2 of 2005 when 25,996 homes were sold. The surge in sales activity was greatest in the city, where 6,460 homes sold – an increase of 15.7% over last year’s numbers. In the suburbs, the number of homes sold was roughly the same as last year at 19,360 – a 1.6% increase. The typical city home is selling in 38 days – 2.5x faster than their 2012 pace of 94 days. The typical suburban home is selling in 48 days – 2.75x faster than in 2012 when they sat on market for 132 days.
Home prices generally increase in the spring, and this spring was no different. Since the real estate market is very seasonal, Dr. Gillen points to the house prices indexes (which factor in quality and seasonality) to give a better representation of home price appreciation.
- Housing prices: The median suburban house price jumped from $221,000 to $245,000 in this quarter (an 11% increase). The median city house price crept up from $150,000 to $153,000 (a 2.2% increase). When evaluated more appropriately through the lens of house price indexes, this equates to a dramatic gain of 5.1% in the suburbs, while city home prices had a more subtle increase of 0.9%.
What does this mean for home buyers?
City buyers should keep an eye on the market as it could begin softening, though it is still too soon to tell. No matter where you’re looking to buy, you’ll need to be prepared – both financially and mentally. This persistently low inventory is forcing buyers to compete for and move quickly on the most desirable homes. Meet with a Realtor to develop a game plan – figure out what your non-negotiables are and make sure everything is lined up so you’re able to jump on the right home. Don’t let yourself be pressured into buying a home that isn’t right for you or that is at the top of your price range. The best way to make your home buying experience as stress-free as possible is by working with a salaried Realtor that specializes in buying homes – someone who’ll be focused on your goals rather than a commission.
What does this mean for home sellers?
With a dwindling number of homes on the market and higher home prices, you may be in a great position to sell your home quickly for a good price. However, this doesn’t mean that you should set your asking price at an unreasonable amount. Your home may be worth more now, but you won’t sell your home for more than the market says it’s worth. This also doesn’t mean that it’s the perfect selling time for everyone. As Dr. Gillen says in his report, “prices in the city are above their previous pre-recession peak while suburban prices remain generally below their previous peak.”
Sellers in the city should also keep an eye out for possible softening in the market. While home prices are still appreciating, the slowing pace of appreciation could indicate that prices are nearing their peak. In the suburbs, we don’t see signs of the market softening. Suburban homeowners will be pleased to see their homes appreciating at a faster rate – although Dr. Gillen points out that “a similar pattern occurred at the same time last year.”
If you’re considering selling your home in the near future, we recommend talking to a salaried Realtor who specializes in selling homes to build the best game plan for you. Our listing specialists understand all of the nuances in submarkets, know how to price a home, and are motivated by your goals rather than a commission. Meet with one of our listing specialists and learn how you can save an average of $15,000 on the sale of your home.
Thinking of buying or selling a home? Schedule a free consultation with one of our Realtors.
Get Started
Read the full report for more details:
