At the end of 2017, there were 3,329 single-family homes for sale in Philly, making it the lowest level of housing inventories in the city’s history. At the same time, house prices took a small dip from the last quarter, offering a bit of relief to homebuyers.
That’s according to the latest numbers from Kevin Gillen, senior research fellow at the Lindy Institute for Urban Innovation, who just his released fourth quarter report on the state of Philly’s single-family housing market. This does not include condos.
“The fact that house prices have decelerated while inventories continue to drop towards ever-lower levels would seem to be something of a contradiction,” Gillen writes. “Typically, low supply is both empirically and historically associated with significant upward pressure on house prices.”
In the fourth quarter, the median house price fell slightly to $150,000 from $159,900. Gillen points out that it is not uncommon to see this dip at the end of the year, since the housing market tends to slow down in the winter months.
Home prices fell and rose across multiple neighborhoods, too, with South Philly experiencing the largest decline of 4 percent. Meanwhile, neighborhoods like University City and Kensington/Frankford experienced jumps in home prices, rising 7.1 and 5.7 percent, respectively.
The “contradictory” fourth quarter rounded out what was one of the hottest years for Philly real estate in a long time. In the second quarter, housing inventory also hit an all-time low, falling below 4,000 for the first time in the history of this data going back to 2001.
Gillen points to one explanation for the fourth quarter’s mixed results: “Potential buyers may be balking at paying such high prices while the selection of homes to choose from is highly limited.”
Meanwhile, he says to expect a typical slow winter season, when home prices and sales will likely chill out until the spring months pick up again. “It should be remembered,” Gillen says, “that the market showed similar mixed numbers at the end of 2016, only to go on to have one its hottest years ever once the calendar rolled over to 2017.”
- Philadelphia Housing Report: Q4 2017 [Official]