The Latest Trends in the Philadelphia Area Real Estate Market

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So far, this has been an amazing winter real estate market. In my last market report, I told you why all the talking heads were wrong about existing home sales. As it turns out, I was right!

Last month, I told you that the big drop in existing home sales was caused by delays in processing thanks to the new mortgage regulations called TRID. A lot of closings were being pushed forward into December, so we didn’t see as many closings in November. The media told you that the market was crashing. This month, they’re all saying how the housing market is blowing up. Well, the media is wrong again!

Although it looks like we’ve seen a huge spike in sales, the market was really just leveling off since so many sales were postponed. That said, 2016 is shaping up to be a fantastic year for real estate.

One challenge in the real estate market is the lack of inventory. Existing inventory is depleting at an alarming rate. Throughout 2015, we struggled to keep 5 months of inventory on the market. As I’ve said before, 6 months of inventory is a balanced market. This month, we only have 3.9 months of inventory, placing us in a strong seller’s market.

Inventory could become a big issue, especially if we can’t get more homes on the market. If you’ve been thinking about selling your home this year, now is the time to make your move.  You will be in an excellent position to maximize the profits from your home sale this year.

Supply and demand is the driving force of any market, and we have very strong demand and very low supply. Most listings come on the market during the second quarter of the year. If you have a great home, my superior marketing skills will have buyers battling it out to get you the best offer.

Finally, let’s talk about interest rates. Freddie Mac projects that rates will dramatically increase throughout 2016 and 2017. Even a slight increase in rates can dramatically affect buying power.

For instance, let’s say you want a monthly mortgage payment of about $995 dollars a month. In 1985, rates were 11.50%, and you could afford a $100,500 home for that monthly payment. In 2000, rates were at 7.54% and buyers could afford a $142,000 home for about $996 a month. In our current market, interest rates are at 4% and you can afford a $209,000 home for $997. If rates go up, the amount of money you can pay for a home will go down.

If you have any questions, give me a call or send me an email. Don’t forget to sign up for our next Home Selling Sharks Seminar on March 12th. I look forward to hearing from you