PHILADELPHIA - The Philadelphia housing market is expected to remain stable throughout the rest of the year. In December, the number of listed homes fell by 6.2 percent compared to a year earlier, while median sales prices increased by nine percent to $305,000. In addition, demand for higher-priced properties is expected to continue to rise.
Demand for higher-priced properties
In Philadelphia, the demand for higher-priced properties will remain high over the next few years. According to Zillow, the median home value has increased by 7% since 2012. In the Philadelphia area, first-time home buyers will continue to be the driving force behind the rising property values. Generation Z homebuyers are also expected to play a bigger role in Philadelphia's housing market.
Philadelphia is becoming a city of renters, with nearly half of its housing units being rented. In addition, the number of single people living alone has increased. Center City has a large population of carless residents who prioritize public transportation and cannot afford the high-priced homes in the suburbs. As a result, Philadelphia renters need to do their homework about the rental costs, taxes, and fees before making a decision.
Demand for single-family detached homes
Philadelphia housing demand remained strong in April 2022, with single-family detached homes in Philadelphia increasing at a high clip. However, the Philadelphia housing market is showing signs of change. The number of new listings has dipped, and the number of pending sales has remained low. This has resulted in a rise in asking prices for Philadelphia properties.
Nevertheless, Philadelphia's real estate market is expected to remain hot for the next two years. As of April, the median price of a single-family house in the city was $304,000, up 8% from last year's median sales price. For the remainder of the year, Philadelphia is expected to see a rise of 8% in its median sales price.
Demand for investment property
The Philadelphia housing market is one of the strongest in the country. Its affordability makes it an ideal place for investors. The Philadelphia metro region is home to one of the highest percentages of renter-occupied housing units. The city is also home to numerous historical monuments and strong economic ties. Therefore, the demand for investment property in Philadelphia is projected to be high throughout the rest of 2022.
The median price for homes in Philadelphia is $280,000. The sale-to-list price ratio is 100 percent, meaning homes sell at or above their asking price. The most expensive neighborhoods in Philadelphia are Graduate Hospital and Frankford. However, there are several neighborhoods where home prices are the lowest.
House price appreciation rate
The Philadelphia real estate market continues to be one of the most affordable on the East Coast. Philadelphia's price-to-income ratio is just 2.6, well below the nationwide average of 5.4. But house price appreciation in Philadelphia continues to slow. In Q4 of this year, it increased by just 1.1%. That's down from the 3.8% increase recorded in Q3 of the year. The decline in house prices since the end of 2020 Q4 results from a slowdown in the overall Philadelphia housing market.
While higher mortgage rates are good news for sellers, they can also cause lenders to tighten lending standards. This can make it harder for prospective buyers to obtain a mortgage. Therefore, the Philadelphia real estate market could see tempered home appreciation through the remainder of 2022.
