Friday, October 18, 2013

Philadelphia Marketwatch Report - September 2013

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The MWR from Trend (or the MLS, as most people call it), focuses specifically on Greater Philadelphia. There are reports available for the entire 5 county area in Southeastern PA (and also in Berks County, so let's call it 6), as well as in Southern NJ and Northern DE.

The report for Q3 2013 is still moving in a positive direction, as was the Q2 2013 report I posted in July. The key metrics show that Philadelphia's average sales prices are up, closed sales are up, homes for sale (aka supply) are down, and the average property marketing period (aka marketing time) is down.*

*Please note that these stats are based on year-over-year changes, to help compare the real estate market in Q3 2013 as compared to Q3 2012. I wanted to reiterate this just so people don't assume these statistics are month-over-month, which is almost always a hard comparison to make (due to weather changes, school calendars, etc).

So, let's break these down 1-by-1:

1. Average Sales Price: $209,001, up 4.8% from Q2 2012. Why do real estate prices go up? Simply put, supply and demand. If supply is low, demand is high; and vice-versa. That is what's happening here.

2. Closed Sales: 3,279, up 15.5% from Q2 2012. That's a decent jump, especially in a still-tight lending environment. It means that homes are selling in larger quantities than the previous year, which makes it easier to sell; which can also be translated into a "seller's market." The pool of buyers is more qualified because lending guidelines haven't really changed yet (for the better), and people can still afford to buy; also good news for the housing market.

3. Homes for Sale & Months Supply: Down 14.9% and 27.6% from Q2 2012. Again, if supply is low, demand is high. If demand is high, prices go up. If prices go up, there is more competition. If there is more competition, there are more bids for each property. And so on, and so forth.

4. Average Property Marketing Period: 84 days, down 19.4% from Q2 2012. This means that it's taking the average seller less time to accept an offer on his/her home. When sellers have to wait a long time to sell, what typically happens? They lower their listing price to attract more buyers and buyer agents. When sellers don't have to wait as long to sell, what typically happens? Prices remain stable, and start moving up.

I'm sure that most of these are self-explanatory to the average reader, but I personally find that it helps to break down each key metric individually and explain what it means to the market as a whole.

If anyone would like the most recent MWR report (for your specific area), please don't hesitate to reach out via phone/email/text. I will email you a customized report, via PDF.

2 comments:

  1. That makes for an interesting graph on Philadelphia real estate. The number of homes for sale is dropping yet the number of closed sales is increasing? Does this mean that the real estate agents are getting better at what they do, selling more homes with less selection??
    -Jackie

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  2. Actually, no.

    It means that more people are buying than before. If the buyer market grows, it creates competition. That lessens marketing time, and raises prices.

    The reason this is probably happening is because rents are high and mortgages are low. Because buying can be more affordable than renting in a lot of instances, it's turning renters into buyers once again.

    Hope that helps, Jackie.

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