Philadelphia homebuyers aren’t going to have an easy time in 2022; there simply aren’t enough houses on the market to go around. The number of listed houses in the area has been declining over the past couple of years, too; this isn’t a recent phenomenon by any means. There have been intermittent periods where the situation seemed to be getting better, but those never lasted long. Why is this happening, though? While there are a few different reasons, many of them (like so many other issues) are related to COVID-19.
If you’re looking at statistics regarding Philly’s metropolitan area, it’s easy to see the pattern. December 2021 showed a decrease of 9% from December 2020, and a decrease of 35% from December 2019. Given that the coronavirus arrived in the first months of 2020, it seems pretty clear how the housing market reacted to the pandemic. Granted, there are many other factors at work, but there’s no doubt that the coronavirus and Philadelphia’s low housing supply are linked. The question is, what can home-buyers do if they want a house in the City of Brotherly Love? Their best bet is to use a Philadelphia-based real estate agency such as Liberty Bell Investments. Searching for houses is hard enough when there are hardly any houses to find, so it makes sense to get help from people who are well-acquainted with the area.
The link between low house listings in Philadelphia and the coronavirus
While listing your house for sale won’t necessarily increase your risk of infection, it will increase your risk of being left without a stable living situation if your monthly income takes a hit. The possibility of layoffs and reduced hours means that a lot of people are going to hold on to their property, rather than try to sell it and buy a (potentially more expensive) house. Even if they aren’t looking at imminent unemployment, selling a house when your job is in jeopardy is a risky move.
You also have to look at the new houses that are being constructed in the area – or rather, the ones that aren’t being constructed. Many builders have started construction projects that they simply aren’t able to finish due to shortages of materials and labor, shipping delays, and inspection backlogs.
The good news is, experts don’t think this situation will last forever; in fact, they predict that it’ll start improving within the next few months. There’s a regular yearly pattern of new home listings appearing each spring, so even though there probably won’t be enough, there will still be more than before. Even so, trends continue to defy expectations; there was an increase in new listings during the summer and fall of 2021, which is unusual for that time of year. Sadly, it didn’t last long; the curve flattened out, then fell by 11% in November and December 2021.
In a typical year, spring is when you’ll see the most houses listed, not the summer or fall. Last year’s trends could have been due to buyers who couldn’t find anything in the spring, and simply had to wait until later in the year to secure a property. However, there could be other factors at play too; there are just too many variables to know exactly what’s going on.
In addition to that, it seems that the pandemic is finally easing up – along with pandemic-related restrictions, job insecurities, and shipping delays. Rising mortgage rates will probably also affect the demand for houses in Philadelphia, which will hopefully shrink the gap between the number of homebuyers and the number of houses that are available. The hope is that job security and overall confidence will rise over the spring and summer, resulting in more home listings and a healthier balance between supply and demand.
A little background on the current housing market in Philadelphia
Even though the future is looking better, the present still looks a bit grim. The average home value in the city’s metropolitan area was $313,529 in December 2021, which is a 15% rise from average home values in December 2020. Mortgage rates may be lower than usual, but they’re still rising; that too plays a part in climbing housing costs.
Anyone who’s buying a home in Philadelphia for the first time will have their work cut out for them. Since they won’t be able to sell an old house to pay for a new one, they’re fighting an uphill battle. It’s like everyone else has made their way onto a crowded escalator, and the first-time homebuyers are the hundreds of people at the bottom trying to squeeze onto the first step.
It’s easy to get discouraged looking at Philly’s home listing options, but this particular city is actually doing a little better than the rest of the nation. Where Philadelphia’s metropolitan area saw a 35% reduction in listings from December 2019 to December 2021, the U.S. as a whole saw a 41% reduction when comparing the same time periods. According to Redfin, December 2021 saw just 482,000 active listings nationwide; that’s 27% fewer listings than in December 2020. Another surprising bright spot appears when you compare average home prices; compared to Philly’s $313,529 average in the last month of 2021, the U.S. average for the same time was $358,460.
For people who are currently in Philadelphia looking for houses that aren’t there, though, this might not be much of a comfort. With the average home listing staying on the market for just 13 days, there’s certainly a lot of pressure to stay on the ball.
The current situation may be difficult for homebuyers in Philadelphia, but with any luck, that’ll change soon. The usual springtime listings will be hitting the market in the next couple of months and building contractors may be able to finish up their houses as pandemic-related delays are resolved. At any rate, buying a house isn’t something you want to rush. If you’re willing to wait for a more fortuitous housing market, you’ll have a much better chance of finding your dream home.