Philadelphia's appreciation rates remain among the highest in the country, including the largest metropolitan area, where the monthly supply has dropped to 1.1 months. Home-seekers who can afford to buy should find more options in the coming months, as potential competitors are excluding them from the market and homebuilders are working at the fastest pace in 16 years. Julie Welker, associate agent and leader of Compass's Welker Group, had at least five listing appointments in the last week of March. Salespeople who have been reluctant to list homes for sale due to the pandemic feel more comfortable, he said.
Empty nests are moving to condominiums. Rising rates have started to slow down demand and ease competition a bit in everything. According to the Mortgage Bankers Association, fewer people apply for mortgages. A March report from Redfin revealed that fewer people are starting online home searches and an increasing percentage of sellers are reducing their prices after listing their homes.
Welker said he anticipates an uptick in activity in the coming months, as buyers look to buy before mortgage rates rise. Competition and home price increases in Philadelphia were “crazy” last year, although the market may have started to cool down, creating potential opportunities for real estate investors in Philadelphia. Before the pandemic, Philadelphia's economy had expanded over the past few years, thanks to a growing labor market, rising education levels, and a sharp increase in residential building activity, as developers struggled to meet the demand for housing in the Philadelphia metropolitan area. He attributed the fall in prices to the historically low number of homes listed for sale in Philadelphia right now.
Two key real estate market statistics that real estate investors can analyze to help determine current and future demand for rental properties are the trend in home prices and the affordability of buying a home instead of renting it. As a general rule, markets where it's more expensive to buy a home tend to have a higher percentage of renters. But the agent, who wanted to buy the house for her, insisted that she agreed with the offer; her husband was an architect and they could take care of the total reconstruction that the house would need. Investors who focus on rental properties for the workforce may find that Philadelphia is the perfect match.
Ostroff believes that the rise in prices following the lifting of pandemic restrictions prompted some homeowners to accelerate their plans to sell their homes or buy a new one. The Freddie Mac Home Price Index (FMHPI) measures the change in house prices in the U.S. housing markets.