After a reasonably successful first two quarters, the Philly’s suburban housing market posted some less-than-stellar numbers in the third quarter, with the growth of home values slowing down and homes remaining on the market for longer periods.
That’s according to the latest Houwzer report by researcher Kevin Gillen, Ph.D., of the Lindy Institute of Urban Innovation at Drexel University, who found that “after one of its strongest quarters since the recession, the housing market in Philadelphia’s suburbs decelerated in Q3.”
Taking a sole look at suburban counties, things sound pretty decent: In the last quarter, home values in the suburbs grew by 2.4 percent, with the median house price of $249,000.
In addition, the home price rates jumped in Burlington and Salem counties by 3.7 and 7.9 percent, respectively.
But compared to the Philadelphia housing market, things start to sound a little more grim. For example, in Philly, housing prices have jumped 42 percent since 2012. In the suburbs, homes have only recovered 11 percent of their value after falling about 23 percent during the recession.
“This implies that—unlike most city homeowners—many suburban homeowners remain ‘underwater’ on their home: they owe more in mortgage debt than what they can sell their house for,” Gillen writes.
Why are the suburbs struggling so much more than the city’s housing market? The same reason why the city’s housing market is so hot right now: Inventory.
“Although both the volume and pace of sales in both markets are brisk, there is a significant disparity in the supply of homes for sale in the city [versus] the suburbs,” says Gillen.
While it would take just 3.5 months to sell off every home for sale in the city, it would take 5.2 months in the suburbs. That means the suburban housing market is a balanced market, while the city remains a seller’s market.
Read the full breakdown of Philly’s suburban housing market here.
Correction: This story has been corrected to show that suburban housing market is a balanced market and that home prices have risen by 11 percent.