What You Should Know About the Pennsylvania Real Estate Market
Are you interested in buying or selling property in Pennsylvania? Learn more about the Pennsylvania real estate market here.
Thinking of buying or selling a home in Pennsylvania?
The pandemic has made for an interesting housing market. With low mortgage rates, fewer homes for sale, and high buyer demand, things are fast-moving for buyers and sellers.
Keep reading to learn how this market will affect you if you are looking to buy or sell.
Changes in the Pennsylvania Real Estate Market
The COVID 19 pandemic threw everyone for a loop this past year, affecting the financial market and the real estate market.
According to CNBC, the pandemic sent many homebuyers into a buying frenzy, making home sales the highest in more than a decade.
With so many people buying homes, that left a little supply of homes. This made for a large gap between the properties available and the demand by homebuyers.
According to PR Newswire, the demand for homes has left the housing stock with 39% fewer homes than last year. Reports are showing 10,000 fewer homes each month compared to what it was in 2020.
The lack of homes available is in turn affecting the number of home sales. With fewer homes to buy, the rate of sales has decreased since last year.
In Pennsylvania, the competitive market has led to a median price increase. The median home price is 16% higher than last year.
This is great for those who have a property to sell. This means a higher profit when you sell your home. The lowered supply of homes and the high demand to buy make this market a bit tricky for those looking to buy.
While mortgage rates were at a historic low in 2020, they are expected to rise somewhat. Currently, mortgage rates in Pennsylvania are at 2.99%, but reports expect rates to rise to 3.2% and 3.4%.
Reports show that Millennial and Gen Z homebuyers are likely to affect the real estate market. Young millennial and older Gen Z members are starting to buy their first homes. This added demand will affect the already hot market.
While research shows that the market is expected to go back to normal soon, the Pennsylvania real estate market is showing to be a seller's market. With the demand for homes, it's a competitive market whether you are buying or selling.
So if you're looking to sell, now is definitely the time to do it.
Fulton County Market Trends
Currently, homes in Fulton County are selling for a median price of $300,000, an 82.9% increase since last summer. With the competitive market, homes are selling faster—in just 21 days.
The gap between supply and demand is seemingly starting to even out with a 15.4% increase in homes for sale compared to last year.
Franklin County Market Trends
Homes in Franklin County are now selling for a median price of $230,000, which is a 17.9% increase since last year.
Since it's such a competitive market, homes are selling in just 13 days! This is a shorter selling timeframe compared to last year, where homes sold in 29 days.
Buying in a Competitive Market
Although prices are high, interest rates are meager, which is good for buyers. The Federal Reserve has kept interest rates low given the toll the pandemic has taken on the financial market and on the finances of Americans.
Low interest rates mean more buying power for those who are looking to buy a home. This is because a smaller amount of your monthly house payment will go towards interest.
If you're looking to buy a home and want to get your foot through the door, there are a few things that can help in this competitive market.
It's recommended that you get pre-approved for your mortgage and have your pre-approval letter ready for the realtor.
It's also recommended that you make a strong offer that will stand out from the others. A strong offer refers to offering a higher price or making a bigger downpayment.
With a competitive market, it's important not to get your hopes up. Stay focused and stay in touch with your realtor and loan officer so that you are ready to go when the chance comes.
Real Estate Market Forecasts
Many aspects of this current market leave reporters wondering what will happen next. The current real estate market is being described as a bubble that will soon pop.
Low home inventory and historically low mortgage rates have all increased the demand of the housing market. But there is some hope for homebuyers.
Reports show that some median home prices are starting to lower. For three months in a row, the annual price growth rate for homes has slowed.
Although this market remains unusual, the real estate market is likely to return to normal when mortgage prices rise.
This will take some time though. The real estate boom that we are in right now will not likely end until 2022 or maybe 2023.
While many people describe this market as a "bubble" because of unusual circumstances, reports say it is not. A bubble in the real estate market is often defined as a situation in which economic factors do not justify rising prices and high demands.
The trends we see in this market have been caused by significantly low mortgage rates and changes in desired housing.
When the pandemic started, more people were spending time at home due to remote working. With more time at home, people needed larger at-home workspaces or sought to live in a less populated place due to COVID infection concerns.
Economists believe that mortgage rates are likely to rise in 2022 because financial markets will expect inflation. An increase in mortgage rates will slow the market, making 2022 and 2023 a better time to buy.
Making a Decision in This Market
The Pennsylvania real estate market will benefit sellers more than buyers. With homes selling at higher than usual prices and quickly, now is the time to sell.
And if you're looking to buy, be prepared to pay more or plan to wait a bit until prices lower. Either way, if you're buying or selling, this market is moving quickly.
Are you interested in buying or selling Pennsylvania property? Palmer Realty can help you navigate this market. Click here to set up an appointment today!