Philadelphia region's hot housing market continued through September
Realtor Erica Deuschle listed a $450,000 home in Havertown on Monday. Four offers later, the house went under contract Wednesday night.
Normally, the market pauses a bit in September as families transition into the school year. But historically low interest rates and the desire for more space because of the pandemic have fueled and sustained buyer demand. The pandemic pushed the usually busy spring market to the summer, and market activity has remained high into early fall.
"I don't see things slowing down, honestly, any time soon," said Deuschle, who operates in the Main Line, Philadelphia, Delaware County, and Montgomery County for Berkshire Hathaway HomeServices and Fox & Roach Haverford.
In the Philadelphia metropolitan area, the number of homes that sold in 10 days or fewer jumped from about 1,730 in September 2019 to roughly 4,250 last month, according to the multiple listing service Bright MLS. And sales hit a 10-year September high with about 8,310 homes sold. More than 1,900 more homes sold in September than sold in the same month last year.
The region did see a few hundred fewer closed sales in September than in August, but the roughly 4% dip is much less than the nearly 17% decline the month has averaged in that period over the last five years, according to Bright MLS.
June, July, and August were strong months for the housing market in the Philadelphia region, said Chris Finnegan, chief marketing and communications officer at Bright MLS, and "a lot of the trends we've seen have continued" in September. The Philadelphia region is "one of the hottest markets" in the country, he said.
"These markets are roaring," he said. "I think they're going to continue to roar in the fourth quarter."
Low interest rates, which are enticing buyers to enter the market, averaged 2.9% for a 30-year fixed loan in late September and dropped to a record-low average of 2.81% this week, according to mortgage financier Freddie Mac. Rates are projected to stay at historic lows through the end of the year.
Jamie Ridge, president and chief executive officer of the Chester County-based Suburban Realtors Alliance, anticipates that the strong seller's market will continue through the end of the year, but rising coronavirus cases in the fall and through the winter could be a wild card that throws off momentum.
"This market was definitely supercharged by the lack of a market in the early months of the pandemic," when Pennsylvania shut down in-person real estate activity, he said. He doesn't expect another shutdown because of the economic impact it would have.
"The real estate market right now is kind of a savior for the local economy," he said. National economists have called residential real estate a bright spot as businesses close and unemployment remains high.
New listings of single-family homes increased from last year and reached a 10-year high for September, but those gains were no match for strong buyer demand and a stubborn lack of inventory. At the current rate of sales, September's supply of available single-family homes would sell in about 1.5 months, an all-time low, according to Bright MLS.
The region's number of new and active listings ticked upward from August to September. Compared with September 2019, new listings last month were up by about 550 across the region.
Homeowners in their early and mid-50s are thinking about downsizing years earlier than planned to take advantage of the current market, said Deuschle, the Haverford-based agent. Usually, people talk for years about selling their home before they start the process, but a convergence of favorable market conditions has "made people rip the Band-Aid off."
"Sellers are jumping in sometimes before they even know where they're going," she said. "They know it's a great time to sell, so they want to capitalize on that."
Buyers continued to enter bidding wars for homes in September, a result of low inventory and fierce competition.
"Buyers are watching prices go up and up," Deuschle said. "They feel urgency to get to where they're going and get settled before maybe values go up even more."