Being a prosperous real estate agent involves staying up-to-date with your local real estate market developments. A well-informed agent is a better resource for buyers and sellers, leading to a more robust clientele and referral network.
While property markets may fluctuate from city to city and even within specific neighborhoods, they generally follow a broader trend. For instance, looking at Pennsylvania’s real estate market gives us a valuable overview of how buyers and sellers perceive the housing scene. This insight helps us comprehend their needs, enabling us to exceed their expectations.
Market Shift: From Sellers to Buyers
Before we delve into Pennsylvania’s real estate stats, it’s crucial to understand the current market shift. The COVID-19 pandemic led to a surge in the seller’s market in Pennsylvania. The low supply of homes was insufficient to meet the high demand, particularly in smaller, affordable markets. The work-from-home revolution provided employees the option to move further away from cities, leading to a rise in demand for suburban and rural properties.
However, the Federal Reserve’s decision to raise interest rates to combat inflation has made home loans more expensive. Consequently, homeownership has become less affordable, leading to a dip in buyer demand. The decrease in demand has resulted in less competition among buyers, signifying a transition from a seller’s market to a buyer’s market. However, this shift is beneficial as it allows for a much-needed market correction. The post-pandemic growth was unsustainable, making a more stable, slower growth rate healthier in the long term.
Statistics Breakdown: Pennsylvania’s Real Estate Market
To better understand the current state and direction of Pennsylvania’s real estate market, let’s examine some statistics:
- The median sales price stands at approximately $298,600, an increase of 7% over the previous year.
- Homes are spending an average of 22 days on the market before selling.
- Approximately 46.5% of homes are selling above the asking price.
- Homes are selling on average for 1% more than the asking price.
- Though the year-over-year data indicates strong growth, the market appears to be stabilizing when looking at the month-to-month data.
It’s important to remember that these stats represent state averages. However, real estate is local, so delving deeper into specific city trends is essential. Let’s examine the market conditions in Pennsylvania’s three largest cities.
Philadelphia’s Real Estate Statistics
- The median sales price is approximately $270,000, down 1.8% year-over-year.
- Homes stay on the market for an average of 36 days before selling.
- Pittsburgh’s Real Estate Statistics
- The median sales price is around $250,000, a 6.4% increase over the past year.
- Homes are staying on the market for an average of 48 days before selling.
- Allentown’s Real Estate Statistics
- The median sales price is approximately $205,000, up 6.4% over the past year.
- Homes are selling within an average of 10 days on the market.
Seizing the Opportunity: How Agents Can Leverage the Shifting Market
Acquiring your Pennsylvania real estate license was only the beginning. The next step involves learning how to best serve your clients under the shifting market conditions.
Guiding Buyers in a Cooling Market
Your clients might be considering waiting for the prices to drop before making a purchase. However, this strategy could backfire. You can guide your buyers by informing them about how rising interest rates will impact their mortgage payments. For example, a $300,000 house with a 5% down payment and a 5.1% interest rate would result in a monthly principal and interest payment of $1,547.41. If they wait for the home price to drop to $275,000, the interest rate could rise to 6.1%, leading to a higher monthly payment of $1,727.09. Demonstrate to your buyers that waiting for a potential price dip could end up costing them more in the long run.
Assisting Sellers in a Cooling Market
Many sellers tend to wait until spring to list their homes due to the higher sale prices in spring and summer compared to fall and winter. However, with interest rates rising, 2023 might see temporary price drops. Therefore, it would be beneficial for your clients to sell now while prices are still at their peak, and buyer demand remains strong.