To be a successful real estate agent, you need to keep current with what’s happening in your real estate market. Knowing your market will help you better serve local buyers and sellers. And that will lead to repeat clients and new referrals!
While housing markets can vary by city (and even neighborhoods within a city), general conditions tend to follow a larger trend line. By looking at what’s happening in Pennsylvania in general, we can get a good idea of how buyers and sellers are viewing the overall housing market. And that will help us understand their motivations and exceed their expectations.
So let’s take a look at the 2022 Pennsylvania real estate market.
Pennsylvania is Shifting from a Seller’s Market to a Buyer’s Market
Before we dive into specific real estate statistics for Pennsylvania, it’s important to understand the shift currently taking place.
The COVID pandemic unexpectedly caused a hot seller’s market in Pennsylvania. We saw sellers with the upper hand as the low supply of homes was too little to meet the high buyer demand. This was especially true in smaller, more affordable markets. The work-from-home revolution gave many employees the option of moving further away from the office. And they took advantage of that, moving away from the cities and into further suburbs and more rural areas.
But now, the Federal Reserve is raising interest rates to combat inflation. This means it’s costing buyers more to get a home loan. So it’s making homeownership less affordable, and that has dampened buyer demand.
With less demand, there is less buyer competition. So we’re seeing a shift from a seller’s market to a buyer’s market.
And that’s not a bad thing. In fact, we’ve been waiting for the market to correct itself. The growth we’ve seen since the pandemic simply wasn’t sustainable, and a slower, steady rate of growth is much better long-term.
Pennsylvania Real Estate Stats
To give you a better idea of where the Pennsylvania real estate market is today and which way it’s trending, here are a few stats from July 2022:
The median sales price is around $298,600, up 7% over the past year.
The average home spends only 22 days on the market before selling.
46.5% of homes sell for more than the asking price.
The average home sells for 1% more than asking.
While this data shows strong market growth over the past year, we’re noticing the market stabilize when we consider month-over-month data. For example:
The median sales price in June was $307,300, meaning values have dipped a bit.
The average days on the market in June was just 20 days, so it’s starting to take homes just a little bit longer to sell.
In June, 52.7% of homes sold for more than the asking price.
In June, the average home sold for 2% more than asking.
Again, none of these recent figures are concerning. They’re simply a sign of a stabilizing market. And even if home values dip temporarily, they will always come back up.
Also remember, these stats represent state averages. But real estate is highly local, so it’s important to look further into the trends in your specific city. Let’s take a quick look at market conditions in Pennsylvania’s three largest cities.
Philadelphia Real Estate Stats
Here’s the latest on the Philly real estate market:
The median sales price is around $270,000, down 1.8% year-over-year.
The average home spends 36 days on the market before selling.
Pittsburgh Real Estate Stats
Here’s what’s happening in the Pittsburgh housing market:
The median sales price is around $250,000, up 6.4% over the past year.
The average home spends 48 days on the market before selling.
Allentown Real Estate Stats
Here’s what you can expect from the Allentown real estate market:
The median sales price is around $205,000, up 6.4% over the past year.
The average home spends 10 days on the market before selling.
How Pennsylvania Real Estate Agents Can Capitalize on Market Conditions
Getting your Pennsylvania real estate license was just the beginning! Now you get to learn how to best serve your clients under shifting market conditions.
How to Serve Buyers in a Cooling Market
Your buyers might mention that they want to wait for prices to drop before they buy. But that could backfire! Serve your buyers by educating them about how rising interest rates will increase their mortgage payments.
For example, if your client buys a $300,000 house with a 5% down payment and a 5.1% interest rate, they would pay $1,547.41 in monthly principal and interest. But if they wait until that home is $275,000 (assuming prices dip at all), the interest rate could be 6.1% at that point. And that would result in a monthly payment of $1,727.09.
Show your buyers how waiting for a hypothetical price dip could actually cost them more!
How to Serve Sellers in a Cooling Market
Lots of sellers prefer to wait until spring to list their homes. And statistically, that makes sense. After all, spring and summer listings usually sell for more than fall and winter listings. But with interest rates on the rise, we could see temporary dips in selling prices in 2023. So it’s in your client's best interest to sell now while prices are still at historical highs and we still have solid buyer demand.
Contact your potential sellers today and explain the benefits of selling now!