Where Philadelphia area home prices are rising
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Philadelphia's housing market is forecast to "soften" in 2023, but prices are likely to keep rising.
Driving the news: Prices are expected to increase in the Philly metro area anywhere between .7% and 5.7% over the next year, according to competing predictions from Zillow and Realtor.com.
Why it matters: Rising demand and limited inventory have pushed prices up in the city over the last year, and it's pushing many people out.
- "The 2023 housing market could become a 'nobody's-market,' not friendly to buyers nor to sellers," Realtor.com chief economist Danielle Hale warned in a national report.
By the numbers: The city's median metro sale price was $325,000 in October, a 6.9% increase from the year prior, said real estate research firm Bright MLS.
- Homes spent a median 13 days on the market, up two days from the same period last year.
Zoom in: North Philadelphia's 19133 ZIP code, which includes West Kensington, saw the city's highest jump — 3.4% — in average prices between July and October. Prices rose from around $93,665 to $96,880, per Zillow data.
- Average prices in Far Northeast's 19115 and 19114, which covers Krewstown and nearby Torresdale, rose by around 3%.
Meanwhile, suburbs like Pennsylvania's Willow Grove and Salem, New Jersey, saw slight declines.
- The rate of home price growth has been decelerating more drastically in the suburbs than in the city since 2021, Kevin Gillen, of Drexel's Lindy Institute for Urban Innovation, shared from a recent report.
Between the lines: Mortgage rate increases are contributing to a slowdown.
- After hitting a 21-year high about a month ago, the benchmark 30-year rate fell to 6.49% last week, the AP reports. The average rate was 3.11% a year ago.
- Plus, new home listings in the Philadelphia metro area are about 22% lower than last October, according to Bright MLS.
What they're saying: It's more expensive for contractors to build homes as the cost of construction materials has risen nearly 50% in the last two years, Gillen told Axios.
Yes, but: While Philadelphia's housing inventory remains low, it's up significantly since last December, suggesting a "softening market," Gillen notes.
What's ahead: Gillen expects home prices to rise on the more conservative end of the forecasts, considering that many Philly ZIP codes saw more modest growth around 1.8%-2.8% between July and October.