Real estate experts have been predicting a housing market decline after the pandemic surge. This and spiking mortgage rates at the highest levels in a decade are shifting the real estate landscape.
Below are four indicators that the Philadelphia housing market is changing:
- Pending and closed sales see sharp declines
High mortgage rates are definitely impacting the market resulting in fewer buyers and fewer deals. According to Bright MLS, in the 11-county Philadelphia closed sales dropped 22% compared to last September.
- The median time a home spends on the market has increased in four consecutive months
During the pandemic, the housing market was extremely competitive with homes selling in fewer than 10 days throughout the summer months of 2021 and 2022. In September, properties were slightly slower to sell, remaining on the market for 12 days but still well below the 20-30 day historic averages.
- Inventory continues to increase
Supply and demand are shifting from a brisk seller’s market as a result of record-low inventory, to a more balanced environment with high interest rates affecting buyers’ ability to purchase homes. Thus, there are more opportunities to buy in the market. Months of supply is an indicator of available home stock. According to Bright MLS, housing stock was below one month in Greater Philadelphia during late winter/early spring; by September the timeframe was up to 1.6 months. Within the City limits, Philadelphia’s home supply increased by to 3.19 months, but still well below the historic average of six months.
- Price increases are slowing
The market may be leveling off, but home prices in the region have consistently increased. In September the median sale price was 6.5% over the past year, but the smallest increase since June 2020. In 2022 year-over-year price increases hovered around 10%. Philadelphia County actually saw a decline in median sale price compared to last September, dropping 0.4% to $260,000.