New listings of high-end houses, which dropped the furthest and fastest during the early months of the pandemic, are coming back to the market and inflating the median price of houses currently for sale, according to a Zillow analysis.
The median list price for a home in the Philadelphia metropolitan area in June was $333,074 — a 5.2% increase from May and nearly 12% higher than a year ago, according to the online real estate database company.
During the same time, the number of new listings above $402,000 — the top fifth of new listings in June — was up roughly 19% in the region. Buyer demand remains high, and inventory is low, which has brought high-end sellers who had been nervous about the pandemic back to the market, Zillow analysts said. Higher numbers of high-end sales raise the median list price.
For the most affordable segment of the Philadelphia-area market — the bottom fifth of new listings, priced below $159,000 — new listings are down more than 20% from last year and down roughly 7% from May to June. Spring is typically the busiest season for home sales. Nationally, before and early in the pandemic, new listings of the most affordable houses outpaced those of high-end houses, so June saw a reversal of that trend.
“Owners of higher-end homes held off on listing their homes much more back in April and May than owners of more affordable or middle-tier homes,” said Jeff Tucker, a Zillow economist. “With more resources, they can often afford to wait more and time their sales strategically.”
Buyers who are looking for houses with big yards, pools, and space for home offices in the collar counties because of the pandemic are spurring sellers of larger, higher-priced homes to enter the market, said Rachel Rothbard Heller, a Realtor with Coldwell Banker Preferred based in Old City. Her clients are searching for houses in the price range of $700,000 to $1.2 million.
“If it’s priced right,” she said, “it will go.”
At the lower end of the market, expanded forbearance options as part of pandemic relief are keeping a significant number of homeowners in their houses who might otherwise have been on a path to foreclosure, Tucker said. That also helps constrict inventory. Through forbearance, homeowners can delay their mortgage payments by months.
The increase in new listings of the most expensive houses, even as new listings of more affordable homes remained low in the Philadelphia region, reflected national trends largely dictated by the unequal way the pandemic’s economic downturn is affecting households, according to Zillow.
Across the country, the high-end market has largely recovered. New high-end listings were down 9% in June compared with last year. In May, these listings had been down by more than 50% compared with last year.
Nationwide, new listings for the most affordable homes were down 29% in June compared with a year earlier and up slightly from May.
“It’s a pretty consistent story around the country of the biggest shortage of new listings in the bottom price tier,” Tucker said.
Sellers overall have been slower than buyers to come back to the housing market, exacerbating the overall inventory shortage. New listings have been replenishing at a much slower than normal rate.
Stephanie Biello, president of the Greater Philadelphia Association of Realtors, said midprice houses around $400,000 are subjects of bidding wars and have been closing over asking prices in the city, since the city doesn’t have much inventory in that price range and lower.
“If we don’t have inventory, the prices are going to go too high” and keep people from being able to afford their first homes, which they could later sell to first-time home buyers in order to buy a more expensive home, said Biello, the associate broker and manager at Kurfiss Sotheby’s International Realty’s Philadelphia and Main Line office. “I hope more inventory comes on at the price points where the inventory is very low, so we can keep that cycle going.”
Biello said she’s seeing a lot of activity for listings above $600,000, particularly in Bucks County, where her brokerage has its main office. A lot of buyers are coming from New York in search of more land, spurred by concerns about the pandemic, she said.