Will The Pennsylvania Real Estate Market CRASH? We hear about the real estate bubble & how it’s going to ‘pop’ more than we’d like to hear. In this video, I’ll be discussing Inventory levels, interest rates, rising home prices,and buyer demand moving forward in 2021 and beyond so make sure you stick around till the end!
Will the bubble pop? Few people foresaw the housing market crash 15 years ago. Unlike today it was fueled by low interest rates and loose mortgage lending standard. When the housing bubble burst, some nine million families lost their homes to foreclosure or short sale between 2006 and 2014. Housing values plunged 30% or more, homeowners lost a collective $7 trillion, and it took nearly a decade for most markets to recover. With today’s market activity everyone is asking, are we in for a repeat housing market crash? The short answer is “not likely.” Today’s mini-boom cannot be sustained, but a crash as serious as the last one is highly unlikely because of a few determining factors including higher lending standards, pandemic mortgage forbearance, price growth slowing, which we saw in august, and homeowner equity.
Right now on The Main Line buyer demand is showing no signs of slowing and as soon as homes hit the market they are being snapped up. All of the listings I have sold in the past month have been on the market less than a week before they go under contract and some go under contract in a matter of hours, over list price, and without contingencies. Bidding wars, love letters to sellers, and removing all contingencies that are precautions for buyers are going by the wayside. We are seeing an incredible demand and part of that is it is really a good time to buy. Homes in PA are as affordable as they were in 2016. Because mortgage rates are low and home equity has been building, it is an incredible time to buy and an incredible time to sell. We are also seeing a number of international buyers on The Main Line, which is not the case in the rest of the US. One thing to remember about Main Line real estate is its’ desirability.
People are drawn here for a wide variety of reasons. For many years now national publications have pointed out that in comparison to other east coast metropolitan areas such as Philadelphia, Washington DC, Boston, Connecticut, and New York, etc. real estate prices on The Main Line are much lower. In addition The Main LIne offers top notch schools, universities, a booming arts and food scene, and easy access to the outdoors. Because of this, we haven’t seen many dips in the market. However Inventory on the Main Line right now is really, incredibly limited. Homes on average in August were on the market 26 days and the number of homes is down 47% from this time last year. The median sale price is 1.75 million and market cooled only slightly in August. As we move into fall and winter, we are probably going to see the market cooling more, but I do not anticipate there being any slowing of buyers. In fact, I am getting more and more buyers looking at Main LIne homes as commutes become less important with new hybrid work models.
Another reason people are still buying is the mortgage rates dipped below 3% which is an all time low and you can get more home for your money. Buyers are really taking advantage of this and this is why we are seeing the such sustained demand. Keep in mind, if you are buying, you will need to present all of the proof of loan repayment and have a 20% down payment. This is one of the reasons we really do not expect a crash because lenders are increasingly strict on the terms and who they will lend to and how much. In the immediate, experts anticipate the cooling during the holidays, at a normal clip, but beyond that the housing market is very stable, if not constricted still. New homes are slower to come because if the labor shortage and timber shortage earlier this year, making it even more constricted. On the Main Line, inventory is not largely new home, but in New Town, there are definitely new developments to check out.
All indicators point to it still being a really unique market in which it is good for buyers because of lending conditions and sellers because of so many buyers. We do expect a market correction to pricing, but they should continue to rise for the foreseeable future, in 2022, because of inventoty. Are you looking to buy or sell on The Main Line? This would be the time to contact a realtor and see the options available. I am always available to help. I have decades of experience and have helped so many buyers and sellers secure their dream home on The Main Line. Kimmy Rolph Sells The Main Line and Local Areas.
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