Residential real estate transactions continued to edge up at the end of 2011 in Philadelphia, giving sellers and real-estate agents hope that perhaps recovery is on the horizon for the housing market. But it is important to note that full recovery is still a ways down the road.
The eight-county Philadelphia area posted real estate sales that were 5.3 percent greater in December 2011 than in the previous month. They were 4.8 percent greater than they were in December 2010.
Nationally, the rates increased 5 percent and 3.6 percent, respectively, according to a real-estate industry report. Also, the inventory of unsold homes dropped, which could make things more equitable for buyers and sellers, experts said.
Still, there were some troubling signs. More sales contracts were canceled in December 2011 than in the same month a year ago, with 33 percent of agents saying they had canceled contracts in December. Appraisals that came in under the selling price were a chief culprit, experts said.
And even though interest rates on a fixed 30-year mortgage fell to record lows, it still is tough to qualify for mortgage loans. That could become even more difficult as the Federal Housing Administration this month moved to make it more difficult to get an FHA loan.
While some agents and economists expressed hope at the new numbers, one economist said Philadelphia and the rest of the nation still have a ways to go before they can say the housing market has recovered.
An estimate by the Federal Reserve said that a large number of house in repossession remains. By the time the second quarter of 2011 ended, about 25 percent of the homes on the market were repossessions. The government estimates about 1 million homes in foreclosure in both 2012 and 2013.
Source: Philadelphia Inquirer, “Existing-home sales still rising in Dec.,” Alan J. Heavens, Jan. 21, 2012