What’s next for the Philadelphia real estate market?

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After a busy spring / summer shopping season in Philadelphia, potential buyers and sellers who may have taken a break from the market are likely wondering what awaits them for the rest of the year.

The limited supply, coupled with historically low mortgage interest rates, has spurred Philadelphia homebuyers into action, creating a competitive real estate market in the City of Brotherly Love.

However, home buyers in Philadelphia will face new challenges in buying a home in the coming months, so the team

Prevu Real Estate

collected these trends for the rest of 2021.

Rational profitability of real estate

When employers implemented a work from home policy last year, Philadelphia residents realized that their home office or spare bedrooms did not provide the necessary space to balance living and working from home.

The need for additional space, coupled with low interest rates, forced Philadelphia homebuyers to purchase affordable inventory from the Philadelphia market in late 2020 and early 2021. The excitement in the markets pushed prices up around 11% across Philadelphia as buyers rushed to buy larger properties.

But endless bidding wars and competitive searches have tired many buyers, and the number of property offers has dwindled over the summer as buyers enjoy their vacations. Sellers can now have three to four offers per house instead of 15. Although the competition has leveled off, the number of offers on the market has not yet increased as sellers cling to their coveted properties.

As buyers and sellers end their vacations in August and early September, inventories are expected to rise again this fall.

Expect additional stocks in the coming months

Homeowners in Philadelphia are making a profit on their housing investments in this market, making big returns on real estate that has skyrocketed in value over the past few years.

Not all sellers have sought to cash in on the surge in activity, hoping to get the best price for their property. Some homeowners worry that any new-found profits will be immediately needed to purchase their next high-value home.

The idea of ​​selling the perfect home just to compete with other buyers due to the limited number of homes has got many sellers thinking.

But as Americans have enjoyed the summer, buyers and sellers are hoping the fall season will bring more supply to the market.

Commission refunds violate brokerage regulations

The first half of 2021 was dominated by rising housing costs, and cost-conscious Philadelphians were looking for solutions to improve their competitiveness in proposal writing. Buyers creatively wooed sellers by making concessions on their bids and asking multiple mortgage brokers to find the best interest rate.

In addition to interviewing several lenders, Philadelphia shoppers interviewed various brokers and found:

commission discounts

which effectively increased their purchasing power.

BUT

commission discount

simple: when a homeowner buys a property, the broker provides a percentage of his commission in the form of a discount. Commission discounts are legal in 40 states, including Pennsylvania, and the additional savings allow shoppers to increase their purchasing power.

Prevu Real Estate

transfers savings to buyers with the largest commission in Philadelphia – up to 2% of the purchase price of a home.

Homebuyers in Philadelphia crave office proximity again

American jobs are at a crossroads as employers deploy hybrid work-from-home scenarios requiring many workers to return to the office at least a few days a week.

The workplace pendulum swinging back into the office is forcing home buyers to rethink their searches and focus again on smart commute homes. As employers roll out hybrid plans, buyers will be negotiating between larger dwellings or looking for apartments closer to the office by the end of 2021.

Changing priorities affects the market, forcing buyers to rethink buying houses in the suburbs in favor of the city.

Interest rates remain historically low

Low mortgage rates are prompting Americans to take their first steps up the home ownership ladder. Interest rates fluctuate every day, but rates on 30-year mortgages usually drop below 3%, and rates on 15-year mortgages are around 2.25% or below.

The cheaper cost of borrowing is inspiring Philadelphia shoppers to enter the market, increasing competition to buy existing listings. Buyers and sellers can expect rates to remain low for the remainder of 2021, which will hold back real estate growth in the near future.

Interested in buying a home in Philadelphia? Check

listings for sale

and find out how much you can save with Prevu’s

Smart shopper discount

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