More sales but lower prices characterized the suburban real estate market in 2015's first quarter, as the Philadelphia region continued to extricate itself from the housing downturn.
An analysis by economist Kevin Gillen of data provided by Berkshire Hathaway Home Services Fox & Roach Realtors showed that the typical suburban house sold fell in value by 1.8 percent in the first quarter compared with the fourth quarter.
Yet Gillen, chief economist of Meyers Research and senior fellow at the Lindy Institute for Urban Innovation at Drexel University, also noted that while the average home price declined by only 0.3 percent in the city quarter to quarter, in the suburbs the average price fell 2.3 percent. Value is measured by comparing resales of particular houses. Average price reflects sales overall.
The typical Philadelphia-area home has recovered only 5 percent of the 23 percent it lost in value during the housing bust, which began here in third quarter 2007, the data show. Values must appreciate an additional 18 percent to recover the loss completely, Gillen said.
His analysis covered data from the 10 suburban counties in which BHHS Fox & Roach sells properties: Bucks, Chester, Delaware, and Montgomery Counties in Pennsylvania; Burlington, Camden, Gloucester, Mercer, and Salem Counties in New Jersey; and New Castle County, Del. (Gillen previously analyzed first-quarter sales numbers and quarterly price changes for homes within the borders of Philadelphia, based on data from the city Recorder of Deeds Office.)
Of the 10 suburban counties, Gillen's analysis of the data shows, Mercer County homes lost 6.6 percent of their average value in the first quarter from the fourth. Delaware County was down 5 percent; Gloucester, 2.8 percent; Bucks, 2.4 percent; Chester, 1.8 percent; and New Castle, 1.3 percent.
Gainers were Montgomery County, 0.3 percent; Burlington County, 0.8 percent; Camden County, 1.2 percent; and Salem County, 7 percent.
Although Gillen tracks prices quarter to quarter in his analysis, his data are for year over year. Sales volume increased by 1,124 houses in first quarter 2015 from the same period in 2014 - to 9,032, from 7,908.
"I don't believe the sales have gone up drastically in any of our areas, especially the ones that I specialize in - West Chester and the surrounding townships of approximately 10 miles," said Kit Anstey, of BHHS Fox & Roach. "Prices are stable and have not seen a decline. When a property is put on the market, regardless of price, if priced properly and staged properly, it will sell quickly, and many times with multiple offers."
Year over year, Gillen said, there were fewer million-dollar suburban sales, 112 vs. 115.
"There is no question that the higher-end resales are somewhat slow - especially the $2 million and higher - but if they are in a good neighborhood, in good condition and priced right, they tend to move very quickly," said John Duffy, of Duffy Real Estate on the Main Line.
"We recently listed two homes in Lower Merion in the $1.2 million range, and they both sold in under one week," Duffy said.
Overall, the number of homes listed for sale declined to nearly 30,000 units, from 35,000 in the same period a year ago - "a post-bubble low," Gillen said.
"At their peak back in 2011, the number of homes listed for sale in the region was nearly 55,000 units, when house prices were, not coincidentally, in free fall," he said.
Location is the factor.
Martin Millner, of Coldwell Banker Hearthside in Yardley, said he had seen inventory improve in the 20 Bucks County submarkets his firm tracks.
"When we look at the number of months of inventory, or what we refer to as the absorption rate, it is now 7.9 months, compared with 7.4 at the same time last year," he said. "Not much of a difference, but still up very slightly."
Inventory is 9 percent lower than it was in the first three months of 2014 in both Camden and Gloucester Counties, the lowest levels since 2006, said Mike Lentz, of Keller Williams Real Estate in Washington Township.
Noted Lentz, "I've seen multiple-offer scenarios on about a third of my transactions this year."