The Philadelphia housing market continues to be tight heading into the spring, which is normally the busiest selling and buying season all year. Even in January, buyers were already looking for their perfect home. There is still a wide range of homes and pricing available, allowing buyers to find the perfect property to meet their needs with prices ranging from $58 to $1,620 per square foot. Let’s take a look at the market trends so far this year to get an idea of where we are and where we’re headed.
Supply & Demand
Philadelphia continues to see an unusual trend in real estate investing. There are fewer single-family homes on the market, but housing prices are continuing to fall slightly. Usually, when there are fewer choices available, housing prices will skyrocket. The average price for a single-family home is still up over 12.7 percent from a year ago, but the rate of growth has slowed substantially. In fact, during the fourth quarter of 2017, prices dipped by 0.5 percent, and that is a trend that has continued into early 2018.
The number of available homes is still extremely tight. It set a 30-year record low in the last quarter of 2017, and that trend seems to be continuing. Buyers may be balking at buying a property for top dollar when their choices are extremely limited.
Location, Location, Location
The median price for a home is $150,000, but some neighborhoods fared much better than others. Prices continue to fall in the northern and western parts of the city where you are seeing population loss as these areas are less desirable. Keep in mind, however, that 49 homes sold for more than a million dollars in the fourth quarter of 2017 in desirable areas adjacent to Center City, and these areas have shown great promise through early 2018.
Renters saw a pretty flat month with the average rental renting for 10 percent less when compared to a year ago in Cooper Grant, Lanning Square, Cedar Park and Dunning. Meanwhile, rental prices rose by more than 10 percent over a year ago in Carroll Park, Mill Creek, North Philadelphia West, Kensington, Cramer Hill, Center Waterfront, Whitman Park, Woodlynne, Point Breeze and Eastwick.
A Look to the Future
Developers are still developing new units, but there seems to be a lack of interest in real estate investing in new units after this year. Over 4,000 new units hit the market in 2017, and it is expected that about 3,800 units hitting the market this year. This will include 12 new Philadelphia high-rises.
If you are interested in buying or selling real estate in Philadelphia, then please contact us. We would be happy to discuss with you the specifics of your situation.