Philadelphia’s housing inventory, that is, the number of properties available for sale, is notably low right now, and it means that sellers are getting multiple offers on homes even days after they go on the market. Buyers are having to offer above list price and have also been willing to make important concession in their real estate contracts, such as agreeing to be bound by a sale even if an appraisal suggests they are paying too much.
Residential real estate inventories in the Philadelphia area stand at about 3.1 months, meaning it would take that long to sell all of the houses currently on the market assuming there were no new houses going up for sale. While to a layman this may seem like a reasonable length of time, realtors like to see an inventory of between 5 and 7 months. Philadelphia’s inventory indicates a housing shortage, meaning that even neighborhoods that are not particularly hot or desirable are hard for families to get in to right now.
Experts are attributing the shortage to a relative lack of construction activity in the Philadelphia area, meaning there are not a lot of new properties available to relieve the shortage. Moreover, there is an ongoing interest in investing in Philadelphia residential property, and investors typically prefer to hang on to properties as rentals rather than put them back on the market.
Buyers in the Philadelphia area need to be aware of the market conditions and should realize that, if they must buy right now, they will face some tough competition from other buyers. Still, people should be careful and may even think about consulting a real estate attorney before agreeing to significant concessions in a real estate contract.
Source: The Philadelphia Inquirer, “Philly’s housing shortage: New construction, investor ownership have biggest impact, study says,” Caitlin McCabe, Aug. 5, 2017.