The changing of the season traditionally brings a few alterations in the Philly housing market. We spoke with several of the area’s most experienced realtors to learn what autumn has in store for buyers and sellers.
The market favors sellers right now, with a high demand for housing making the supply expensive. And it looks like it’ll stay that way through the season, because “there are no significant signs of inventory increasing,” says Jim Onesti of the McCann Team, part of Prudential Fox & Roach.
In other words, says Frank L. DeFazio, also of Prudential Fox & Roach, “as long as inventory is low, sellers will remain in the driver’s seat and prices will continue to be driven up by so much competition for the limited inventory."
Deciphering the jargon
Realtors like to talk about the “affordability index,” which really just refers to people’s ability to afford the house that they are buying. Income and location come into play when formulating the index. “Even with higher interest rates and higher prices, affordability index remains very attractive for homebuyers,” says Chris Somers, realtor and owner of the Somers Team, part of Re/Max Access.
Mike McCann, owner of the McCann Team, says “interest rates are at historic lows,” but others warn that that could change with the cooler months. “Motivated buyers,” says DeFazio, “might be fearful of rising interest rates and ultra-low inventory, creating feeding frenzies and multiple offer situations on new listings.”
This will be something to really keep an eye on, especially if you’re looking to buy downtown. While it may not be apparent right now that taxes will be increasing, McCann believes that there is something brewing. “We have a concern next year with the city increasing taxes so dramatically,” he says. “Many homes in and around Center City will see their taxes double and triple in 2014.”
What about the renters?
Renters and buyers work on different planes, but their respective markets influence one another. “The rental market will continue to soften as the purchase market continues to rebound,” says Chris Somers of Re/Max Access. Somers. That soft market he’s referring to is one where sellers – or in this case, landlords – outnumber buyers or renters. So renters will see a surplus of inventory with competitive prices to match.