DEVON, PA — The real estate market in the Greater Philadelphia area and beyond experienced some significant changes in the year culminating in December 2023. The fluctuating home sales rates, coupled with alterations in average sale prices, are creating a unique market landscape that may impact homebuyers, sellers, and real estate investors.
In December 2023, the HomExpert Report by Berkshire Hathaway HomeServices Fox & Roach, REALTORS® revealed a decline in home sales and available properties in the Greater Philadelphia area. Limited inventory resulted in swift sales and elevated prices. Nevertheless, there is a sense of cautious optimism for heightened activity in 2024, fueled by pent-up buyer demand and a decrease in mortgage rates.
“With the conclusion of the 2023 real estate market, we continued to see a lack of homes for sale and those that were for sale, sold quickly and for elevated prices. We are cautiously optimistic that activity will pick up in 2024, with pent-up demand from buyers. Homeowners who held on tight to their low mortgage rates will be encouraged by the predicted drop in mortgage rates and may choose to enter the market themselves, increasing the inventory of homes for sale,” comments Fox & Roach, REALTORS® CEO, Larry Flick V.
Decrease in Sales and Availability
Firstly, data reveals that both sales and availability of homes in the Greater Philadelphia area have shown a downward trend. Statistics indicate a 7.2 percent drop in the number of properties sold. Correspondingly, the average inventory of homes for sale shrunk by a worth noting 8.8 percent.
These shifts imply that potential homebuyers may now face a more competitive market with fewer options available. Consequently, home sellers might find themselves in a stronger bargaining position due to reduced competition.
However, the picture isn’t the same everywhere. For instance, the Main Line reported an even steeper decline in home sales – a significant 14.8 percent. Simultaneously, the properties under contract in the area also took a drastic plunge by 20.9 percent, implying a potential slowdown in transaction activities for the area.
Decrease in Time on Market
In contrast, the period that houses stayed on the market decreased by 8.8 percent across Greater Philadelphia. This reduced time means a quicker turnaround for sellers, which can lead to increased liquidity. For investors, it could mean a quick return on their investment.
Yet, it’s not all bad news for buyers. The increased speed of sales might require them to make decisions quicker, but it also means new properties may become available more frequently.
Increase in Sale Prices
While the number of properties sold may have witnessed a dip, the average sale price saw an upward trend. The Greater Philadelphia region saw a 4.3 percent increase, while the Main Line reported a smaller yet noticeable increase of 2.8 percent.
The increase in sale prices could make homeownership less accessible for some prospective buyers. Simultaneously, it could yield higher profits for sellers and potentially higher returns for real estate investors.
Region Specific Impacts
Regional variations also play a significant role in the real estate market. Taking the Jersey Shore area as an example, Atlantic County experienced a notable decline in home sales by 21.4 percent, indicating a shift in market dynamics. Similarly, Cape May County saw a decrease of 17 percent, with 142 homes sold in December 2023 compared to 171 in December 2022, reflecting a change in buyer preferences or economic factors.
Shifting our focus to the Main Line, which encompasses nine major municipalities/townships, home sales witnessed a decrease of 14.8 percent. This decline, with 156 homes sold in December 2023 compared to 183 in December 2022, raises questions about the market conditions in this area and the factors influencing buyer decisions.
Moving further, in the Lehigh Valley, another notable region, home sales decreased by 12.5 percent. This decline, with 471 homes sold in December 2023 compared to 538 in December 2022, indicates a potential adjustment in the housing market of this area.
Conclusion
While real estate trends can be complicated, understanding them is crucial. For homebuyers, sellers, and investors in the Greater Philadelphia area and its surroundings, being aware of these changes can provide insights to better navigate the current property landscape.
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