Thursday, February 20, 2014

Philadelphia Marketwatch Report - December 2013

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First off, my apologies for the lateness of the Q4 Trend Marketwatch Report.

The MWR from Trend (or the MLS as most people call it), focuses specifically on real estate in/around Greater Philadelphia. There are individual 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.

My focus is always on the Philadelphia report specifically, as that is the center of our local real estate market.

The report for Q4 2013 (aka December 2013) is still moving in a positive direction, as was the Q3 2013 report I posted in October. The chart's key metrics show that Philadelphia's Average Sales Price is 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 Q4 2013 to Q4 2012. I wanted to reiterate this just so people don't assume these statistics are month-over-month, which is a hard comparison to make in real estate (due to weather changes, school calendars, etc).

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

1. Average Sales Price: $198,756, up 3.8% from Q4 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, and that is also what allows homeowners to build equity; a prime reason why people decide to buy real estate in the first place.

2. Closed Sales: 2,793, up 4.3% from Q4 2012. That's a nice increase, especially in a still-tight lending environment. It means that homes are selling in larger quantities today as compared to the same time period in 2012, which means we are slowly transitioning from a Buyer's Market into a Seller's Market. To add to that, these buyers are typically more qualified (because lending guidelines haven't loosened up yet), and they can still afford to buy. Which is great news for the local real estate market.

3. Homes for Sale & Months Supply: Down 12.5% and 23% from Q4 2012. As stated before, if supply is low, demand is high. If demand is high, prices go up. If prices go up, there is more competition to buy real estate. If there is more competition, there are more bids for each property. And so on, and so forth. Low supply is good for sellers.

4. Average Property Marketing Period: 91 days, down 11% from Q4 2012. This means the average seller requires less time to accept an offer on his/her home. When sellers have to wait for long periods of 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 may go up.

Most of these metrics may seem self-explanatory, but I personally find that it helps to break each one down individually and explain what it means to the local Philadelphia real estate market.

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 can then email you a customized PDF.

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