Since 2013 onwards, the Pennsylvania real estate market has been on an upward trend, allowing the housing market to gain not only stability, but also a certain degree of evolution. These steadily increasing housing prices serve as a mark of improvement and allow us a mild optimism regarding the Pennsylvania Housing Market. We predict a steady improvement over the duration of the year.
An important aspect one must keep in mind when analysing the housing market predictions in Pennsylvania is the population growth. PA experienced the addition of 70,000 people to the state between 2010 through 2013. That means that some aspects like a decrease to the average time a property stays on the market along with the fact that people continue taking advantage of the low interest rates as mentioned in our 2013 housing market analysis. These factors contribute to a flourishing of our real estate predictions for 2015.
Main Factors of the 2015 Pennsylvania Housing Market:
Pennsylvania has never had a negative appreciation rate since 1990, according to data collected and analysed by NeighborhoodScout. Even more so, the past 12 months present a 2.42% appreciation rate, which is aligned with the steady and constant upward trend we previously mentioned. The appreciation rate is the result of a calculus based on both median house value data and a weighted repeat sales index. That means that the average price changes is measured in repeat sales or refinancings on the same properties. The information is obtained by reviewing transactions on repeat mortgage for single-family properties.
- Some of Pennsylvania’s regions are considered to be among the most affordable housing markets in the nation. Take Pittsburgh for an example, a region which had a median home price of $116,100 in 2005 and now presents according to Zillow a home value index of $86,900. Given the actual median home value in the state of $150,800, one can conclude there is a particular affordability in the area, with a geographically specific bargain possibility which makes the state attractive to medium sized pockets.
- If prices can be low in Pittsburgh, that doesn’t mean that Pennsylvania doesn’t have posh living options to offer. Of course there are cities like Philadelphia, where housing costs are obviously more expensive with an average price of a home around $215,300 and there is probably no going downward from there, as the local economy stays steady and shows all signs of progress with a recent whopping number of 35,000 new jobs available in the area. Without any exaggeration, it is pretty obvious that Pennsylvania is among the economically stable states where real estate transactions actually happen within the parameters of a fair market. Luckily, major influencing factors indicate an empowered transaction climate which keeps expanding.
- Now for some factual information: the current median home value in Pennsylvania is $150,800, according to Zillow. Together with that let us not forget that Pennsylvania home values have gone up 0.5% over the past year. Optimistically, the same source predicts a rise of 1.3% within the next year.
- Even if foreclosures have been impacting home values and overall the whole real estate market, the national value of foreclosed homes is 3.0 (per 10,000), while Pennsylvania has a lower 2.8 value. Also, the percent of delinquent mortgages in the state is by 0.2% lower than the national value of 6.3%.
- With around 117.000 homes currently for sale in Pennsylvania, might it be an appropriate moment in time to consider that perhaps America is switching to a market driven by renters? Since the foreclosure crisis turned millions of people to renters from previous homeowners, especially single-family residences are a key target to take into consideration when looking into the rental market. Pennsylvania offers a variety of single-family residences for rent, from small one bedroom homes to larger three or four bedroom houses, with prices ranging from $1.200 to $1.500. Since tight credit and low for-sale inventory make owning a home difficult for many today, we predict a rise in the interest for rentals not only in Pennsylvania, but on a national level too.
- Real estate research shows that on a national level, new home sales have increased in the past three months, but that is not yet reason for certainty. Even if monthly new home sales show a remarkable jump of 6.9, 4.3 and 7.8 respectively between December and February, the median sale price has fallen, with a strong decline in February. We keep our optimism though, since the real median household started to rise in 2013 and 2014, marking the end of the continual declines since 2008. That happened thanks to just 0.2 percentage points away from full employment. In plain English, more people right now are employed and make money – or perhaps, even more money – than at this time last year. Home-buying obviously depends on employment, which generates financial power over the real estate market. That is why prospects seem positive if caring for the labor statistics is considered to be relevant as a key indicator for residential changes. It just might be that mortgage rates will also remain as they are, hopefully, thanks to the positive job picture, for at least a few more months this year.
Basically, if we would try to name a moment in recent history when we would expect or at least hope for a good and dynamic selling season in the real estate business, then it would definitely be 2015 for Pennsylvania. This might actually be the year to encourage purchasing a home, as various economic factors seem to indicate.
With a new listings increase, as well as pending sales growth, median sales price up with 1.9 percent and an encouraging decrease of the days a property stays on the market until sold by 1.0 percent, Pennsylvania simply looks good. Progress is made without shaking any real estate predictions and we do not expect any brutal changes that would affect the steady but healthy and energetic real estate market.
Real estate specialists talk about interest rates making headlines again. Mortgage rates remain near historic lows, but the Federal Reserve Board (FRD) could lift the floor for short-term interest rates in the near future, as expected. This makes a serious impact for any buying decision, if predictions become reality. This could be relevant and might need to be taken into consideration even if Pennsylvania Housing Market manifests itself as a calm and growing medium. Although buyers would likely take advantage of what may be called ”the last days” of very low rates, risky moves need to be deeply analysed even when facing hopes of keeping financing costs low.
Pennsylvania is also one of the states where new home construction and sales get to be at least comparable to existing home sales, if not perhaps exceed them. Probably because the recent trends focus on high-end construction demands and differently built houses, which obviously raises the budget exponentially. Younger, entry-level buyers will chip in the extra amount of money for differently designed houses, but this doesn’t mean that financially conscious buyers wouldn’t prefer investing in a less expensive existing home, so we can conclude that there is room for everyone in Pennsylvania – figuratively and… really, actually, there are types of homes for every expenses and budgets waiting for their new owners to settle in.
A recent United States Census Bureau report indicates that a relevant percent of Americans desire to move. 9.6% is the number, and the reasons are dissatisfaction with current housing or neighbourhood, interest for local safety or public services. It would be interesting to observe how Americans re-evaluate their relationship to their homes and their future houses, especially in states where housing opportunities are various, like Pennsylvania, while the economic context is also favourable for change. Should it be Delaware, Maryland or Philadelphia. Perhaps, you would prefer a smaller town to fit your housing needs?
Perhaps it is not just about finding a new home close to one’s heart, but simply making a good investment. Bear in mind that Pennsylvania Association of Realtors points out that real estate is again among the choices Americans make for best long-term investment, according to a recent Gallup survey. Not only that the percentage of people choosing real estate as the best investment met a steady growth over the past few years, but particularly now this number is up 1 percent from last year. So, if stocks, gold, saving accounts or bonds are not on your to-do list in terms of investment, our housing market predictions are not too bold when recommending Pennsylvania as either your next bargain or top of the notch investment.