Q1 2019
“Philadelphia House Prices Show Biggest Decline in Nearly 10 Years. House prices fall while sales volume remains steady.”
Housing inventories (the number of homes listed for sale) remain at an all-time low in Philadelphia. There are currently 3,363 houses listed for sale in Philadelphia, which is essentially unchanged from the 3,336 reported three months ago. Historically, there is typically ~5,000 houses listed for sale in any given month in Philadelphia. The average price of Philadelphia homes fell by 5.7% in Q1 on a quality- and seasonally-adjusted basis.
Looking at Center City and Surrounding Areas (Zip codes 19102, 19103, 19104, 19106, 19107, 19123, 19125,19130, 19145, 19146, 19147, 19148) the average days on market has increased from 79 days in 1st Quarter 2018, to 91 days in 1st Quarter 2019. The average sold price has increased from $393,457 to $404,411.
In contrast to recent quarters, house price changes in individual submarkets were both mixed and relatively large in magnitude. From smallest to largest, the average quarterly change in seasonally- and quality-adjusted house prices by submarket was: University City (-15.2%), North Philadelphia (-8.1%), Northwest Philadelphia (-7.5%), Upper Northeast Philadelphia (-1.8%), Lower Northeast Philadelphia (-0.8%), Center City/Fairmount (-0.6%), South Philadelphia (+2.0%), West/Southwest Philadelphia (+3.0%) and Kensington/Frankford (+6.7%).
How does the future look? Home sales activity remains fairly strong, but its growth has slowed considerably. Although DOM typically increases as the market transitions from the winter to spring months, we are seeing a much larger-than-average increase. While low inventories have consistently been exerting upward pressure on house prices, this quarter’s decline could indicate that prices have finally exceeded the threshold of what most households can afford, or simply that buyers are unwilling to pay the high prices that these homes are being listed at. Inventories have already begun to increase in many other metro areas across the U.S., providing some relief to the rapid house price appreciation in these markets. Since Philadelphia tends to lag the national housing market, this could be taken as an indicator of what to expect in the near future. If so, expect further downward pressure on local house prices.
We hope you found this overview informative. Please feel free to reach out if you would like more details on the Philadelphia Real Estate Market, or if you or anyone you know is thinking of buying or selling in the near future.
*Information for this report sourced from Lindy Institute of Urban Innovation at Drexel University
http://drexel.edu/lindyinstitute/