Home News Philly-area housing market has slowed but is still challenging for buyers

Philly-area housing market has slowed but is still challenging for buyers

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A couple in their 30s from Montgomery County bought their first home in 2017 when they were just the two of them. Mortgage rates were stable and a frenzied pandemic housing market was years away. Since then, they have had children and are thinking about expanding their family.

But they want to stay in the Lansdale area, and the larger house they want is selling quickly. In the meantime, they are afraid to put it on the market unsure if they can get their hands on another one.

Richard Strahm, a real estate broker helping them with their search, said their story was pretty typical.

“There is a lot of angst on the part of buyers and sellers about entering the market right now,” said Strum, owner of Lansdale-based American Foursquare Realty, which operates in southeastern Pennsylvania. “In part, it is that fear that is destabilizing the market.”

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Rise in mortgage interest rates and resulting economic uncertainty inflation Recession fears are helping put the brakes on the housing market in the Philadelphia area. Sales are slow and prices are high. Although there are fewer buyers looking for homes, the remaining buyers are still in competition as the supply of homes is still tight.

Following previous pandemic-era frenzy, the housing market is behaving like normal during this time when activity tends to slow down. said Lisa Sturtevant, chief economist at Bright MLS, which provides

“Right now, it looks like we’re holding back on the sell and buy sides for those whose moves are discretionary,” Sturtevant said. Households are waiting to see where the economy is headed.

“People want stability,” she said. “It hasn’t been that way in the last few months.”

Home sales have fallen this fall compared to last year’s booming market. New pending home sales in the greater Philadelphia area in September fell nearly 27% from the same period last year, according to Bright MLS. Also, last month’s sales numbers were his lowest for September since 2015.

In the current housing environment, sellers are adjusting their price expectations, and more are lowering their asking prices after realizing they are being too optimistic, Sturtevant said.

However, according to Bright MLS, the median selling price in the greater Philadelphia area was $330,000 in September, up 6.5% from the same period last year. Prices in the Philadelphia area are rising faster than in other major Mid-Atlantic markets.

This may come as a surprise given that buyer demand is dwindling and mortgage rates are rising, limiting buyers’ purchasing power.However Historically low supply of homes for sale Prices are kept high in the Philadelphia area.

A frenetic market over the past few years has helped drain an already tight housing supply. Bright MLS said he could sell out of homes in the Philadelphia area in six to seven weeks if the pace of sales stabilizes and new homes don’t hit the market.

Eight properties went up for sale in Lansdale on Oct. 12, Strahm said.

New listings across the Philadelphia area fell in September compared to the same period last year.

Potential homebuyers in the Philadelphia area face both high and high prices. rising mortgage interest ratesThe average 30-year fixed mortgage rate was 6.92% on Thursday, the highest rate in more than 20 years. Freddie Mac, according to government-backed mortgage buyer.

Due to the sharp fluctuations in rates this year, Home budgeting is hardand the upward trend in interest rates is bargain some buyers.

“First-time homebuyers are being slammed by this economic uncertainty and rising interest rates and rising prices,” Sturtevant said. “It’s a triple whammy.”

” read more: U.S. average long-term mortgage rates hit their highest level in more than 20 years this week

Rising mortgage rates are also preventing some sellers from putting their homes on the market as most homeowners have to buy another home. Fixed at a low rate at the time of purchase Sturtevant says he doesn’t want to give them up in exchange for the current higher interest rates.

She had expected to see sellers listing properties in August before interest rates rose further, but that didn’t happen. their house was probably appreciatedand they can use the proceeds from the sale to keep more cash in mind and take out smaller loans.

Sturtevant said buyers should compete for a shrinking pool of buyers and hunt down mortgage lenders offering varying interest rates and terms.

Overall, the current mortgage rate of around 7% has not slowed the market as real estate agent Mercy Purcell thought.

“People are just adapting,” said Purcell, an agent for Better Homes and Gardens Real Estate, who works in Bucks and Montgomery counties. People still need and want to buy housing. But buyers who would have searched in the $350,000 range are now looking for $325,000 homes, she said.

“It’s a strong seller’s market right now, but it came from an insane seller’s market that was literally off the charts,” Strahm said.

Gone are the days when sellers regularly submitted dozens of offers and accepted bids tens of thousands of dollars above the asking price. Strahm said he sees things he hasn’t seen in years. He offers price cuts and sellers contributing to the buyer’s closing costs.

“Buyers are— depression It might be a good word to use during most of the pandemic,” Strahm said. .

” read more: Philadelphia-area homebuilders continue to struggle despite slowing buyer demand

With fewer buyers looking for homes, properties are staying on the market longer than they used to, but they are still leaving the market faster than they did in 2019.

Erin Lewandowski, team leader of the Erin Lewandowski team at Moorestown-based real estate agent Berkshire Hathaway Home Services Fox & Roach, said there were several numbers in the market before the claim was made. Instead of spending time on the house, he said the house would remain for sale for several weeks.

Buyers now have more time to strategize and negotiate, she said.they don’t feel pressured to waive home inspection When Other contingenciesThey want to find a property that they’ll be happy with at least five years from now, given current housing prices.

” read more: Black homebuyers face barriers from past racist policies and current practices

But demand remains strong, especially for single-family homes under $500,000, said Lewandowski, who runs a team in Southern Jersey.

“Overall, buyers still feel pressure to act fairly quickly when they find a home that meets their needs,” said Sturtevant of Bright MLS.

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