Both the housing supply and the number of days that houses stayed on the market hit record lows in August in the Philadelphia region, as buyer demand has stayed high, according to Bright MLS.
New listings reached a 10-year high for August after the pandemic delayed the normally busy spring housing market, but the region continues to face low housing supply. The area has less than two months' worth of housing inventory, according to the multiple listing service, meaning all the homes currently on the market would sell over that period if conditions held steady. That’s a historic low, fueled by strong buyer demand and housing supply that can’t keep pace. In August 2019, the region had a three-month supply, and even that was considered low.
“This is a really remarkable time in Philadelphia where you’re just seeing so many superlatives and firsts,” said Chris Finnegan, chief marketing and communications officer of Bright MLS. “It just goes to show a voracious appetite for housing in the Philadelphia metro area.”
The pandemic is driving much of the region’s record August activity. Nervousness among sellers and buyers and shutdowns of real estate industries early in the pandemic pushed back many sales that would have happened in the spring. Also, many buyers are looking for more space after being cooped up in their current homes during stay-at-home orders, and want to take advantage of historically low interest rates. And potential sellers are seeing how well others are faring and entering the market, too.
The current market favors sellers, who are seeing bidding wars and selling their properties above the listing prices. Five years ago, the region’s market was balanced with a housing supply of more than 6½ months, according to Bright MLS.
Nationally, home buyer demand and home prices are up, and more homeowners are entering the market, according to Zillow.
Homes in the Philadelphia region also continue to leave the market quickly. They spent a record-low median of 11 days on the market last month, according to Bright. That’s two fewer weeks than in August 2019, when homes stayed on the market for 25 days. Five years ago, homes spent a median of 43 days on the market.
Edmund Choi, a Realtor at Re/Max Main Line, said that early in the pandemic, many agents “misjudged the velocity of the rebound” that would come after Pennsylvania lifted real estate restrictions.
“It was like the floodgates opened,” he said. “The demand for the change in the environment, that was really unexpected.”
Across the metropolitan area, the number of closed sales last month was up about 14% from August 2019. Roughly 8,640 sales closed last month, about 1,520 of them in the city. New pending home sales throughout the region hit an August record at 9,730.
More newly constructed homes sold in the city than anywhere else in the mid-Atlantic this year through August, according to Bright. Roughly 370 newly constructed homes in the city sold during that time. Ninety-five new construction closings happened in Fishtown.
Choi, who typically serves Chester and Montgomery Counties and northern Delaware County, characterized the market over the last three months as “insane.”
Last month, single-family homes in Chester County spent a median of seven days on the market, about two weeks fewer than last year. In Coatesville, the county’s only city, detached housing units spent a median of five days on the market, compared with about a month in August 2019. Homes in Bucks, Delaware, and Montgomery Counties spent a median of seven or eight days on the market last month.
Gloucester County had the steepest drop in median days on market from last year, from 44 to 14.
Because of high buyer demand, sellers across Philadelphia’s collar counties are getting well over their sometimes “aggressive” listing prices, Choi said.
“That has been almost every single person’s experience in the ‘burbs,” Choi said. There just aren’t enough houses for those who want them.
One of his clients offered the asking price for a house in the $800,000 price range in Blue Bell and got outbid by about $25,000. A $675,000 house in Bucks County, he said, sold for $75,000 over the asking price.