Houwzer’s Senior Economic Advisor, Kevin Gillen, has released the Q1 housing market report for the Greater Philadelphia region. The numbers are generally in line with what we saw in the Q1 report for the city. Here’s the rundown on the region’s Q1 inventory numbers, sales activity, and housing prices.
- Inventory: Like the city, the number of homes on the market in the suburbs is drastically low. The suburbs inventory dropped to 13,681 listings at the end of March. While a winter dip in listings is normal, there were roughly 3,500 more listings at the same time last year.
This reflects housing trends around the U.S. Inventory has taken a sharp decline both in the cities and the suburbs. Regardless of the lack of supply, people are still buying, which is only making the inventory tank more.
- Home sales: Sales activity in the suburbs is surging – even more than in the city. This was the region’s most active Q1 in 12 years and the number of sales were 9.5% higher than last year’s Q1. However, million-dollar listing sales were down 14% in the region, marking the first substantial decline in +$1M sales since 2012.
The high number of home sales is unusual, considering those numbers tend to stagnate in winter months. Especially when inventory is remarkably low. The slim pickings hasn’t scared off buyers too much – neither in Philly, nor its surrounding suburbs. So how is that affecting home prices in the region?
- Housing prices: Pricing changes varied at the county level. The highest gains were in Salem County where house prices grew 9.5%. The average house price also rose in New Castle, Mercer, Delaware, and Bucks. Montgomery County saw no change, and Chester, Philadelphia, Camden, Gloucester, and Burlington dropped. On a quality and seasonally adjusted basis, the suburban house price index fell 1.5%. The median house price dropped from $229,000 to $221,000.
Philadelphia is still outpacing both the suburbs and most other major U.S. cities – even though the average house price dropped 1.6% from the last quarter. Suburban home prices are down 17% from their 2007 peak, but city home prices are 19% higher. While Greater Philadelphia home prices aren’t appreciating at the rate they once were, it’s still too early to tell if the recent deceleration is due to the abnormally long winter or if the market is actually starting to turn.
What does this mean for home buyers?
Competition is tight, homes are going fast, and the good ones are fielding multiple bidders. This doesn’t mean you should stop trying to find your dream home, but it does mean you should talk through your goals and expectations with your Realtor. Make sure everything is lined up and you’re prepared to make competitive offers in a timely manner. In this crazy market, you need a salaried Realtor who specializes in buying homes. You need a buyer agent who has the time and ability to focus solely on accomplishing your goals, helping you define what you really want and need in a home, getting you the best deal, and making this process as stress-free as possible.
What does this mean for home sellers?
If you are looking for incentive to sell your home, this is it. For now, the demand is there and supply is seriously lacking. If you own a desirable home or live in a attractive location with few homes on the market, you may be able to fetch top dollar for your home. Actually, you may be able to hit a high number even if your home isn’t extremely nice. However, even in a seller’s market, it is important to work with a salaried Realtor who specializes in selling homes. Someone who understands all of the nuances of varying submarkets, who knows how to price a home, who only works one side of the deal, and who is motivated by your goals rather than a commission. Meet with one of our listing agents and learn how you can save half the cost on the sale of your home, an average savings of more than $12,000 in Greater Philadelphia!
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Read the full report for more details:
