Stalemate.

If you're looking for one word to describe the Philadelphia region's residential real estate market this morning, that's it.

The eight-county metropolitan area is in better shape than almost anywhere else in the country, for reasons I've touched on to some degree in virtually every story and column I've written over the last 12 months:

Prices here didn't rise as quickly or as much as they did in other places, nor have they fallen as precipitously or as rapidly.

Moderate price increases and the relative absence of flippers and investors in this market during the boom years limited the number of subprime mortgages, and have kept mortgage delinquencies low compared with other, higher-flying locales.

Most of the foreclosure filings here occur for the traditional reasons, loss of job or illness. Both Pennsylvania and New Jersey, as well as the City of Philadelphia, have mechanisms in place to help keep people in their homes, and foreclosure laws are among the nation's most consumer-friendly.

Residential builders in the suburbs didn't overproduce for the market in this boom as they did in the late 1980s, with disastrous results that haunted them for almost a decade. The region's unsold inventory of about 28,000 homes is one of the lowest in the country.

Until the national subprime meltdown in August 2007 began tightening credit, sales of new and existing homes in this market were only slightly off the pace of 2006 - the midpoint of the boom that we were belatedly experiencing.

Because of low mortgage delinquency rates, sellers of new and existing homes here aren't competing now with large numbers of foreclosed properties, as sellers must in California, Florida and other states. Forty percent of all U.S. home sales these days are of foreclosed properties.

What this means is that prices of existing homes in this region have not declined as much - about 3.8 percent since the end of our boom, compared with 40 percent or 50 percent in some parts of California. Some outside economists are predicting that while many areas still have a way to go before prices bottom out, this market may be close to bottom already.

And though it's not clear yet whether a trend is emerging, the percentage decline in the volume of existing-home sales year over year was smaller for both September and October.

The litmus test comes this week in a report on pending home sales for October, a month of economic disaster that saw investor nervousness spill over to the housing market. Pending numbers, which reflect agreements of sale, will show how badly.

In this market, the economy's gyrations are making buyers nervous about paying any price for a house, and sellers worried that whatever they ask may not be enough to tide them over hard times.

In other words, a stalemate, reflected in the growing inventory of unsold existing homes and the lengthening time it takes to sell one of them.

Unless the stalemate is broken quickly, the Philadelphia real estate market will look like everywhere else.

On the House:

Inquirer real estate writer Alan J. Heavens is the author of "Remodeling On the Money" (Kaplan Publishing). His home-improvement columns appear Fridays in Home & Design.

EndText

"On the House" appears Sundays in The Inquirer. Contact Alan J. Heavens at 215-854-2472 or aheavens@phillynews.com.