If you’ve been looking in the Philadelphia metropolitan area for your next home, you’ve probably noticed something: there aren’t that many options. Even if you aren’t being that picky about the kind of house you want, you’ll be competing with a lot of other home buyers in the area. Due to various factors (which we’ll cover below), the number of house listings in Philly just isn’t keeping up with the number of home buyers. Unless they get lucky for some reason, most people either decide to wait a few months for the right house to become available, or use a Philadelphia realtor like Liberty Bell to help them navigate the market more effectively.
This situation isn’t a new development; the decline in house listings has been going on for the last couple of years. If you’re measuring from December 2019, you’ll see that they’ve decreased by 35% by December 2021. If you’re just looking at the last year or so, you can see a 9% drop from December 2020 to December 2021. So what are the main drivers of this steady decline? As it turns out, many of them are probably linked to the COVID-19 pandemic. After all, it’s been affecting most aspects of the economy for the better part of 2020, and all of 2021; it seems that Philadelphia’s housing market hasn’t been immune either.
How and why the pandemic has affected Philly’s real estate market
All other things being equal, there are plenty of people in Philadelphia who list their homes for sale each year – enough to ensure that home buyers have plenty of options, in fact. If there’s a pandemic to worry about, though, that’s enough to make most people delay selling their houses. The coronavirus has jeopardized the paychecks of many; if they were considering selling their homes before, the possibility of reduced income is enough for many of them to stick with their current living situation until things improve. If your financial stability is questionable (or could be soon), the last thing you want to do is uproot yourself and find a new home instead remove the broken screws from the current setup.
Another factor can be found in the construction industry. Once again, the pandemic has disrupted normal operations, resulting in delays and disruptions. Inspections can’t be made on time, there are delays for materials that have to be shipped in, and shortages for both materials and workers. There are houses being started, but they simply aren’t being finished on schedule – resulting in less houses hitting the Philadelphia market.
The pandemic has even altered the yearly patterns of Philly’s house listings and sales. Typically you’d see a lot of new listings in the spring, but last year that happened roughly between June and October. Unfortunately, the increase in listings quickly disappeared; by the last two months of 2021, it had fallen by 11%. It’s hard to determine exactly why this happened, but experts say that the rise in listings and sales could be due to home buyers who were forced to wait until the fall/summer months to purchase homes, because there wasn’t anything available for them in the spring.
Despite unpredictable patterns, experts are confident that things will change for the better over the upcoming months. For one thing, it’s likely that the yearly influx of new home listings will appear around March or April. Then there’s the fact that the coronavirus isn’t affecting daily life and commerce as much as it was last year. Inspection backlogs can be resolved, shipping delays lessened, and pandemic-related labor shortages will hopefully ease up. It’s thought that job security, which was a big cause for anxiety during 2020 and 2021, will improve as well. As both new and old houses are put on the market in the Philadelphia metropolitan area, buyers won’t have to spend months searching for a place to live.
Putting Philadelphia’s housing market problems into perspective
Although prospects for home buyers are looking brighter, the same can’t be said for the present. Mortgage rates might be low, but they’re steadily climbing, which adds to the overall cost of buying a house in the city. Plus, the average home price is going up too; from December 2020 to December 2021, it’s increased by 15% to $313,529.
First-time buyers will have it especially hard this year. To add to all the other factors, they’re having to make their way into an under-supplied housing market without having the sales price of another house to help them with payments on a new home. It’s like people trying to get onto an escalator that’s already carrying too many occupants; even though it’s constantly taking people upwards, there just isn’t enough room for everyone at its base who’s trying to get on.
While Philadelphia’s housing market isn’t doing particularly well, it looks a bit better compared to national averages. For instance, Philly’s house listings dropped 35% in a two-year period between 2019 and 2021; the nationwide drop during the same period was 41%. Redfin reported that there were only 482,000 active home listings in the whole country in December 2021, which is a 27% decrease from December 2020. You’ll see a similar story with home prices; the average home in the U.S. cost $358,460 in December 2021.
Even so, that doesn’t really help anyone in the Philadelphia metropolitan area who’s spent the last several months looking for a home. Given the fact that the average house listing is only active for 13 days before being snapped up, home buyers really have to stay on their toes in order to get anywhere.
That being said, it seems like things are looking up, whether you’re in Philly or the rest of the country. It’s likely that we’ll start seeing more and more homes being listed (both old and new), which should shrink the gap between supply and demand. One thing’s for sure: finding your next home isn’t something that should be rushed, so waiting for a friendlier housing market should pay off in the long run with reliable countertop and top-notch appliances.
