Realtors see yet another spike in home prices across Pennsylvania, New Jersey, and Delaware

In the past five years, the median sale price for a home in Pa. nearly doubled, data from the state realtors association shows.

Rowhouses at 34th and Spring Garden streets for sale or rent

File photo: Rowhomes at 34th and Spring Garden streets for sale or rent. (Emma Lee/WHYY)

The cost to purchase a home continues to spike across the tri-state area and doesn’t appear to begin slowing down, as monthly realtor reports across Pennsylvania, New Jersey and Delaware show.

Since the COVID-19 pandemic began three years ago, the cost to purchase a home has increased by 31% in Pennsylvania — but prices were already climbing before then.

The median sale price for a home in Pennsylvania was $219,811 last month, up from $211,000 in May 2022. The average 30-year fixed mortgage interest rate was 6.57% in late May, compared to 5.1% last year.

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The surge is due to a combination of factors, such as fewer homes having been built while millennials, one of the largest generations, hit their peak homebuying years.

“We’re seeing a lot of that generation jump into the marketplace,” said Al Perry, president of the Pennsylvania Association of Realtors. “We haven’t seen nearly as much housing come into production as the market demands.”

Perry saw one client get outbid after offering $5,000 over asking price for a Philadelphia condo, losing out to an all-cash buyer.

In New Jersey, the median sale price for a single family home was $500,000, up from $490,000 last May. In Delaware, the median sale price was $363,000, up from $361,950 in May 2022. The median home sale price nationwide was $396,100, down 3.1% compared to a year ago.

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New home listings across Pennsylvania are down by 23% compared to last May. There were 36,146 listings statewide compared to 47,149 in May 2022, according to the Pennsylvania Association of Realtors data.

There were 7,371 new single family home listings, down from 10,330 in May 2022, New Jersey Realtors data shows. Likewise, there were 1,512 new home listings across Delaware, down from 1,755 in May 2022, according to the Delaware Association of Realtors Data.

Across Pennsylvania, there were 10,967 units sold last month, down from 13,269 in May 2022, data shows. In New Jersey, 4,999 single family homes were sold statewide, down from 6,526 in May 2022. In Delaware, 1,238 homes were sold, compared to 1,478 last April. Nationwide, home sales dropped 20% compared to May 2022.

There is about 3 months of home inventory on the market across Pennsylvania, which means it’s considered a seller’s market; 6 months of inventory is a balanced market and more would mean a buyer’s market. In New Jersey, there are 2.5 months of single family home inventory, which is even tighter. In Delaware, there is 2.4 months of inventory.

Sometimes it’s difficult for successful sellers to become buyers again as there’s fewer homes on the market — especially since any homeowner who refinanced with low interest rates is not likely to move.

“That’s a variable that’s keeping some of the houses off the shelf. The best sellers to find today are the sellers who already have a house down the shore that they bought in 1995 that they’ve been using as their summer home,” he said. “And now that they’re going to retire down there because they already have their ‘out’ housing opportunity lined up for them so they can just cash in.”

While Pa. might have about 3 months of housing supply, some hot Philadelphia neighborhoods have even tighter markets.

“If you buy in the Fishtown zip code, it’s like a 1.8 month supply of inventory,” said Christopher Mattioli, president-elect of the Greater Philadelphia Association of Realtors.

Mattioli had one client with several offers way over asking price in a bidding war for a Fishtown home. The spring and summer are typically busy seasons.

“A lot of sellers wait for the spring to come on the market because they feel like it might be the opportune time for them to really get a return on their investment with the heavy buyer activity,” he said. “We are seeing people sell and then wait because they feel that they’re priced out.”

Most counties in New Jersey saw median sales increase over the year but there was some cooling down in South Jersey.

Atlantic County saw a 2.5% drop in the median sales prices compared to last year, to $299,450, New Jersey Realtors data shows. Likewise, Ocean County median sales prices dropped 1.2%, to $410,000. Salem County dropped 3.3% to $217,500, data shows.

The higher interest rates have pushed some home buyers to move in with family and save up for longer, said Kathleen Morin, first vice president of New Jersey Realtors. But buyers shouldn’t be wary about making offers on homes that are a good match.

“I think that people should not not be afraid to purchase in this market,” Morin said. “The interest rates are a little higher right now, but there are other products out there that they can utilize.”

Morin said she’s seen most demand for homes that are not fixer-uppers: “People are still looking for something move-in ready.”

Home buyers are concerned about affordability and high interest rates, said Chrissy Steele, president of the Delaware Association of Realtors.

“We are still drastically short on affordable housing,” Steele said.

As interest rates hover around 7% for the first time in years, it’s actually closer to normal, she said.

“It’s a very typical interest rate. We’re not talking about the ‘80s or the ‘90s where interest rates are 17%, 18% or 19% — and even that didn’t slow buyers a whole bunch. Those 3% interest rates are incredibly rare and not sustainable.”

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