Wednesday, April 30, 2014

Philadelphia Marketwatch Report - March 2014

Click to see the numbers up close

If you're a regular PUL reader, you have seen my MWR blog posts before. If you're new to PUL, I encourage you to read this regular post!

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 for Berks County, so let's call it 6), as well as for 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 same data/report is available for each of the other aforementioned counties as well.

The report for Q1 2014 (aka March 2014) is still moving in a positive direction overall, as was the Q4 2013 report that I posted back in February. The report's key metrics show that Philadelphia's Average Sales Price is up, Closed Sales are down, 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 Q1 2014 to Q1 2013. I wanted to reiterate this so people don't assume these statistics are month-over-month, which is a hard comparison to make in the real estate industry (due to weather changes, school calendars, etc). These factors play an important role with people looking to buy/sell real estate.

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

1. Average Sales Price: $200,320, up 10.1% from Q1 2013, which is a big jump. 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. Building equity is one of the prime reasons people decide to buy real estate in the first place.

2. Closed Sales: 2,252, down 12% from Q1 2013. That is the first decrease reported since I began putting this regular blog post together. The only thing I can attribute it to was the brutal winter we just went through. As a real estate agent working on the street everyday, I would say it's the most likely reason why the numbers dropped. When there is a snow storm going on, you cannot look at homes, you cannot make offers, and you cannot have closings. Philadelphia had its fair share of storms this winter. For those who need another reason besides weather, it could also be attributed to the sharp increase in prices and a lower level of inventory. That has been a recent complaint from buyers all across the US. If there aren't enough homes for sale, the number of closings will go down.

3. Homes for Sale & Months Supply: Down 12.5% and 17.6% from Q1 2013. 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 to buy real estate, there are more bids for each property. And so on, and so forth. Low supply is good for sellers, and bad for buyers; which means we are transitioning from a Buyer's Market to a Seller's Market.

4. Average Property Marketing Period: 102 days, down 7.7% from Q1 2013. This means that 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 accept an offer, what typically happens? They lower their asking/listing price to attract more buyers and buyer agents. When sellers don't have to wait as long to accept an offer, what typically happens? Prices remain stable and/or start to go up.

Most of these metrics may seem self-explanatory, but I personally find that it helps to break them down individually and explain what it means to the local Philadelphia market. Please note that this is a general overview of what is currently going on in Philadelphia, which means that some neighborhoods will be different than others.

If you would like the most recent MWR report (for your specific county), please don't hesitate to contact me via phone/email/text.

I will email you a customized PDF.

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