Philly’s real estate has notably been on the upswing in the last year, with home values hitting all-time highs in 2016 and the market transitioning from a buyer’s to seller’s. But as the first quarter of 2017 comes to a close, new numbers show that there really isn’t enough inventory in Philadelphia to keep up with demand.
A recent report by real estate website Trulia reveals that home inventory in the Philadelphia metro region dropped 32 percent in the last five years, from January 1, 2012 to January 1, 2017.
The results are based on Trulia’s own database of listings.
That’s on trend with the rest of the country. The U.S. housing inventory hit its lowest level on record from January to March this year, with the total number of homes on the market falling 5.1 percent over the past year. And Philly’s significant drop of homes for sale isn’t even the worst of it. Salt Lake City, Utah, experienced the biggest decrease in total inventory over the past five years, falling a whopping 69.5 percent.
Why the lack of homes? The researchers suspect that current homeowners haven’t been willing to part with their properties or trade up. They write: “This has added to the inventory gridlock that ties up would-be starter-home inventory from ever coming on to the market, further constraining supply and decreasing affordability.”
Looking at Philly, the stock of starter, trade-up, and premium homes for sale all decreased by 16.5, 39.3, and 36.5 percent, respectively, in the last five years. Meanwhile, the median price of homes in these same categories increased by 0.1, 9, and 22 percent, respectively.
There’s a silver lining, though. The uptick in construction should help ease this strain on first-time buyers as new residential units start to deliver, the researchers note. Philly experienced a 20 percent increase in building permits for new construction in 2016 alone.