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3 Philly Housing Market Predictions for 2022 from a Drexel Expert
It’s the start of the new year and many people are wondering what the real estate market is going to look like in 2022. Kevin C. Gillen, Ph.D. is an economist who holds positions as both a Senior Research Fellow with Drexel’s Lindy Institute for Urban Innovation. He produces quarterly reports on the state of the Philadelphia region’s housing market. Gillen shared his predictions for the 2022 Philadelphia housing market with the Philadelphia Business Journal. Their report notes 3 key things that Gillen is expecting to see this year.
Inventory Will Likely Remain Low & the Seller’s Market Will Continue
Gillen told the Philadelphia Business Journal that home inventory is not likely to rise anytime soon. According to Bright MLS, the number of homes that went on the market in the Greater Philadlephia Area in December 2021 was down 6.2%. Meanwhile, the median sales price went up 9% to $305,000. This means it is a great time to sell! With such low inventory, that means buyers have to be creative in finding ways to make their offer stronger. That is why it is so important to work with a real estate agent who can help guide you through that process and negotiate for you. Gillen attributes the scarcity in inventory to a few things:
New construction has been below average levels for man that a decade, which means there are not as many new homes to hit the market.
Many homes, foreclosures from the recession in particular, were converted into rentals and have not been re-listed in years.
People are not selling their homes because they want to wait until more options to buy come on the market.
Home Prices Will Likely Continue to Rise
Gillen was quoted in the Philadlephia Business Journal article saying that Philadelphia-area buyers have been paying “Range Rover prices for a Honda home.” With home prices being up 9% right now, there are fewer affordable options and buyers are getting priced out of the market. Gillen said he anticipates ‘fairly aggressive’ price increases in 2022. This causes concern about housing affordability in Philadelphia. However, Philly was just named on a list of the Top 10 Trendiest and Most Affordable Cities in America. Here’s what we recommend:
Work with a lender to find out how much you are pre-approved for. Once you determine that, make sure you are working with a great real estate agent to help you find the best options in your price range.
The seller’s market won’t last forever. If you are thinking about selling, you will likely get top dollar for your home right now. Curious about how much your home could sell for? Take our free home valuation!
An Increase in New Construction Could Help Bring the Housing Market Closer to Normal
Gillen said Philadelphia could see up to 10,000 new housing units in the city. That’s because the Department of Labor and Inspections processed hundreds of residential building permits in 2021. That will be a major help in solving the inventory scarcity problem. Many of those properties will be able to take advantage of the 10 Year Tax Abatement Program. Although, that program is changing this year. Gillen said that has been vital to Philadelphia’s renewal and expansion of its housing stock and it’s too soon to tell how the changes to the program will affect that.
If you’re interested in buying or selling in the Greater Philadelphia area, please contact us. We can help you navigate the market and find your dream home!