Houses for sale in the Philadelphia region sold more quickly in April and at higher prices than they have in a decade, thanks to historically low mortgage rates and low housing inventory squeezed further by the coronavirus pandemic, according to multiple listing service Bright MLS.
The Philadelphia metropolitan area’s median sale price was $272,100, the highest for any April in the last 10 years and more than $32,000 higher than April of last year.
The median number of days a home in the Philadelphia area spent on the market was 16 last month, a 10-year low, according to Bright MLS, which represents about 95,000 real estate professionals in the Mid-Atlantic region. Homes in Bucks and Chester Counties sold the quickest, spending a median of nine days on the market.
"The properties that are out there, they’re moving and they’re moving at a nice price,” said Chris Finnegan, chief marketing and communications officer at Bright MLS, which is based in Maryland. That’s a good sign for the housing market.
But buyers’ and sellers’ worries about the pandemic, government stay-at-home orders, and statewide restrictions on the real estate industry continued to depress the usually busy spring market.
Pennsylvania is the only state in which most in-person real estate activity is still shut down for the majority of residents, according to the Pennsylvania Association of Realtors. Gov. Tom Wolf’s administration has deemed real estate activity nonessential and has prohibited in-person showings of homes in counties that remain shut down. Wolf declined to grant a waiver to the real estate industry as a whole. Only transactions under agreement on or before March 18 or in counties that are reopening are allowed to proceed in-person.
The restrictions mean roadblocks for some consumers who want or need to buy and sell, including people stuck with two mortgages, residents planning to move for a new job or the new school year, or those who need the income from a sale.
Buyers, sellers, and agents are being resourceful and continuing to rely heavily on virtual showings and open houses. But the pandemic has reinforced a national trend of low housing inventory.
Last month, the Philadelphia area had 4,505 new listings, the lowest April figure in a decade. It’s a level on par with a typical December — real estate’s slowest month. New pending sales in April dropped more than 46% from March, the biggest month-to-month decrease in 10 years.
“It’s what one would expect, because at this point, you’re going to have people on the sidelines,” Finnegan said. ”Some folks that would be selling a property are in wait-and-see mode.”
The general hypothesis is that “a decent amount of people” are in this position, pausing real estate transactions while they try to figure out what the future holds, he said. That could delay the busy real estate season to the summer or fall.
Tom Toole III, a Realtor at RE/MAX Main Line, which operates in Chester, Delaware, Montgomery, and Philadelphia Counties, said his team sold more than 30 houses in each of the months of February and March. In April, the team completed 12 virtual transactions.
Heading into April, Toole thought "if we could get anything on the board this month, we’d be in good shape.”
"We knew it was going to be a challenging time,” he said.
Some clients circled back to buy houses they’d visited before the business shutdown. Others looked at photos online, drove by, and purchased sight unseen. Others purchased after virtual tours. Clients who have been most comfortable with virtual showings tend to be those in a hurry to move.
Agents predict that activity will increase once Pennsylvania allows in-person showings. At least anecdotally, some people who had no intention of moving are now looking to jump into the market after discovering during months stuck inside that their home no longer fits their needs.
The Pennsylvania Association of Realtors has been lobbying on behalf of its 35,000 members for the state to reopen real estate activity with safety precautions, which is how New Jersey and other states are allowing the buying and selling of homes to continue more robustly. In-person transactions are allowed in counties that move into the yellow phase of reopening, but the Philadelphia region is not close to that milestone. Wolf plans to veto a bill that lawmakers passed last week that would allow in-person transactions in every county.
Cory Benhardt, a Realtor at Keller Williams Philadelphia who operates mostly in Bucks County, said sellers and buyers seem to be growing more confident in the strength of the market. Nervous sellers who took their houses off the market early in the pandemic put them back on. And their properties sold.
Over the last few months, Benhardt has consistently seen properties get four, five, or six offers, even those listed as “coming soon” and not technically on the market yet.
“The demand is definitely still there,” he said.