Philadelphia real estate market sees modest gains in August

Inventory in the greater Philadelphia market remains low, but the area still saw modest gains in August.

The region’s market remains solid overall, according to the Long & Foster Market Minute reports. The Philadelphia region includes Bucks, Chester, Delaware, Montgomery and Philadelphia counties.

A few areas in the Philadelphia region saw small increases in home sales in August, including Chester County, where home sales rose by 3 percent. Many parts of the region experienced rising median sale prices. In Montgomery County, median sale price increased by 9 percent, followed by Philadelphia County with an 8 percent increase.

“The Philadelphia real estate market is tracking pretty closely to what we’re seeing in many of the other market areas where Long & Foster operates,” said Gary Scott, president of Long & Foster Real Estate. “Fundamentally, the Philadelphia market is solid and performing as we expected.”

Active inventory fell throughout the Philadelphia region in August. Bucks County experienced a 23 percent decrease in active inventory, and Delaware, Montgomery and Philadelphia counties each saw a 21 percent drop. Homes in the area sold in about six to eight weeks on average.

“Inventory is a challenge in every market in which we operate, and we believe inventory is an issue that is unlikely to go away overnight,” Scott said. “There are a lot of people who have financed, refinanced or purchased at very favorable interest rates during the recession and in recent years, and their motivation is different than it was for many in the past — they’re staying put.”

The inventory shortage is making purchasing a home particularly difficult for millennial buyers, Scott said. That’s not necessarily because millennials and older generations are competing to purchase the same homes, but more due to homeowners and investors choosing not to sell homes that millennials would be interested in purchasing, he said. Although new construction has increased, homebuilders are having a hard time meeting the demands of the market, he said.

“Many more people are moving toward smaller more effective, more efficient housing than the big boxes,” Scott said. “A lot of millennials are looking for maintenance-free, convenient living — like condos and townhouses — that is close to retail, entertainment and work opportunities.”

The best thing that homebuyers can do, Scott said, is to have their financing lined up, have an agent who is an expert negotiator at the ready and remember that real estate is hyperlocal. Within a single large subdivision, it’s possible to see homes in one part of the neighborhood sell quickly while homes in another part sell at a slower pace, he said. Long & Foster’s Market Minute reports allow consumers to view market data for individual communities and neighborhoods. Combining the information from regional and local reports, along with the neighborhood insight and expertise of a Long & Foster agent, can provide a much more rounded and accurate picture of the market, Scott said.

The Long & Foster Market Minute is an overview of market statistics based on residential real estate transactions for more than 500 local areas and neighborhoods and more than 100 counties in eight states. The reports include information about each area’s units sold, active inventory, median sale prices, list to sold price ratio and days on market. Information included in this report is based on data supplied by TREND multiple listing service and its member associations of Realtors, which are not responsible for its accuracy. The reports include residential real estate transactions within specific geographic regions, not just Long & Foster sales, and they do not reflect all activity in the marketplace. Information contained in this report is deemed reliable but not guaranteed, should be independently verified and does not constitute an opinion of TREND or Long & Foster Real Estate.