Daily Local News (West Chester, PA)
A SOLID MARKET
HomExpert Market Reports finds low inventory creating boon for sellers
After the first nine months of the year, the region’s housing market continues to improve at a slow and steady pace that appears to be stymied by a lack of houses available for sale.
According to Berkshire Hathaway HomeServices Fox & Roach Realtors’ HomExpert Market Reports, sales in the greater Philadelphia area, including 12 counties in the Pennsylvania suburbs, southern New Jersey and northern Delaware, increased by 7.8 percent in the first nine months of this year compared to 2016.
That rate of growth slowed significantly in the third quarter in the suburbs, however, highlighted by a decline of 2.8 percent in the number of properties sold in Chester County.
“We saw the same pattern last year,” said Steve Storti, chief marketing officer of Berkshire Hathaway, of the slowdown in the market in the second half of the year. “The market is still up for nine months. We’ll end up the year a few percentage points ahead of the previous year.”
Over the first nine months of this year, 64,671 homes sold
in the region, compared to 59,984 in 2016.
The inventory situation is creating a sellers’ market, Storti noted.
“Home sales are increasing slowly in 2017, and with a lack of inventory to satisfy demand, homes on the market are selling more quickly, indicating that 2017 continues to be a seller’s market,” he noted.
Monthly average inventory was down by 16.3 percent from this time last year, with 29,040 homes on the market in the first nine months of 2017, compared to 34,716 during the first nine months of 2016. Average days on the market continues to drop, from 69 in the first nine months of 2016 to 60 days in 2017. Average price of properties sold inched up by 2.9 percent, going from $266,345 in 2016 to $274,044 in the first nine months of 2017.
In the five-county Philadelphia region in the first nine months:
• Bucks County had 6,304 sales, up 2.8 percent from 2016 and 8.4 percent from the 2015 period;
• Chester County had 5,533 sales, up 4 percent from 2016 and 5.9 percent from the 2015 period;
• Delaware County had 5,435 sales, up 5.5 percent from 2016 and 15.5 percent from the 2015 period;
• Montgomery County had 8,704 sales, up 3.1 and 10.3 percent, respectively;
• Philadelphia had 12,854 sales, up 4.7 and 19.8 percent, respectively.
Chester County posted the highest average sale price in the first nine months of 2017 at $378,088, an increase of 4.3 percent from 2016, followed by Bucks County ($345,241, up 4.8 percent), and Mercer County ($332,258, a decrease of 1.8 percent).
Philadelphia County posted the largest percent increase in average sale price in the region, jumping 10.7 percent from $228,137 to $252,629. Gloucester County posted the largest decline in average sale price, with a decrease of 4.2 percent at $191,700 in the first nine months of 2017, compared to $200,056 from last year at this time.
Inventory remains low
across the region compared to the same time last year, down by 16.3 percent.
Pennsylvania is showing a total monthly average inventory of 15,316 properties for sale, down almost 20 percent from last year. Bucks County posted the highest percent decrease in monthly inventory. It had a 23.7 percent decline followed by Delaware County’s 20.4 percent decline and Philadelphia’s 19.9 percent drop.
Part of the inventory situation can be explained by the Great Recession that started in 2008. People who bought houses just prior to that cannot yet get enough equity out of their properties to move up. That slowdown in trade-ups affects the whole market, as does a decline in new construction.
Even Philadelphia, which
had been a leader in the improving real estate market of the last few years, is not as hot as it had been, Storti noted.
But the improving economy has noticeably propelled one part of the market. The upper end, anything from $750,000 to $1.5 million, is doing well, Storti said. In line with that, house sales at the shore destinations are doing well.
Another part of the market doing well are walkable communities like West Chester, Doylestown, Media and Haddonfield.
“Those are very desirable locations,” Storti said.
To contact Business Writer Brian McCullough, call 610-235-2655 or send an email to bmccullough@21stcenturymedia.com.