As a Philadelphia Real Estate Appraiser, I know what trends I’m seeing day-to-day in the neighborhoods of Philly. However, I thought it would be fun to ask some area Agents what their thoughts were on a couple of issues. Below are the questions I asked along with some of the responses from some of the Philadelphia region’s top agents.
1. How would you describe the Spring market in Philadelphia Metro area so far? and where do you see it going for the remainder of 2014?
2. What do you think has the greatest influence on the market right now…Inventory? Interest Rates? Buyers back in the market?
Center City Condos
I hear a lot of talk about the up’s and down’s of today’s market. And what most Realtors are witnessing is multiple offers, properties selling at or above asking price and a decreased “days on market” statistic.
For the majority of the Center City market, there are more buyers than available inventory and the shift in that relationship will give rise to actions that we see more of today than we would have even six months ago- such as multiple offer bidding. I just encountered three offers on the same home in one day and that home had sat idle for almost two months.
Also becoming common are full asking price offers or even over asking price offers. I think it makes sense (many buyers see the time as being right to snag a condo out of the clutches of others and are therefore willing to put their best foot forward). I am now telling my buyers that IF they see a home they want – do not hesitate to go in quick and strong. Because nothing is more painful than a bidding war. Good for sellers, not so much for buyers.
I think the biggest influence today is the lack of overall inventory.
Coldwell Banker Preferred
Although we had a setback in sales due to the harsh winter for the first quarter for 2014 the spring real estate market has arrived and is brisk for buyers and sellers alike. Our Real Estate market is built around school year more so than the seasonality of the warmer months – they just happen to go hand and hand. People like to have their children finish school at their current district and start fresh with a new one by September. There is a considerable inventory shortage in our regional marketplace and well-priced homes don’t last for more than a week. I still find that price points of $800K+ are moving along in a more healthy fashion but still not to the level of the under $800K markets.
A housing shortage has a great impact followed by the continued challenges of mortgage financing and our tight money policy. As the mortgage market opens up and loosens its restrictive barriers and other investors [in addition to Fannie / Freddie] enter the home finance market we will see continued improvement in unit sales volume and appreciation. I believe that rates shouldn’t be a problem until they begin to reach 6%+ because at that point we will see affordability issues.
Coldwell Banker Preferred
BUSY! Any properties hitting the market that are priced right, move in ready, and in a semi-desirable location are going under contract within 3 weeks on the market. With rising interest rates and more consumers being approved for mortgages I expect 2014 to remain a hot market. Buyers are ready to purchase but need to act quickly because there is a lack of inventory of good, saleable listings.
There are plenty of buyers in this market, and interest rates are still historically low. The greatest influence right now appears to be lack of inventory. We need more sellers!
Berkshire Hathaway HomeServices Fox & Roach, REALTORS
The spring 2014 market is off to a hot start likely due to the pent up demand from a frustratingly cold winder and fears about potentially rising interest rates. Demand continues to outpace supply and so we are seeing a lot of multiple bids and escalation clauses which is driving home sale prices up. As long as inventory is low and demand is high prices will continue to increase, which is great for sellers but not for buyers.
Low inventory. Agents have been pounding the pavement for listings since January of 2013 but demand is strong and homes that are priced well and move in ready continue to sell in days, often with multiple offers. Builders have taken note and new construction inventory is coming towards the end of the summer but for now low inventory continues to cause feeding frenzies and high competition among buyers.
I’d like to thank Mark, Dan, Matt and Frank for their insights. I find it interesting that they all cited “low inventory” as being the greatest influence on the Philadelphia 2014 real estate market. I couldn’t agree more. This market is quickly turning into a text book Sellers Market. We all know when inventory is low and demand is high, prices will rise. That’s good for everyone…except maybe Buyers.
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