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Investment Homes In Philadelphia Projected To Rise

Is it true that if a lot of properties go into foreclosure that the prices in the Philadelphia housing market will drop?

As we begin to wind down 2020 and look towards a new year, we start wonder what impact this continued economic uncertainty will have on the real estate market in Philadelphia. In the grand scheme the rules of supply and demand will always give us the clearest picture of what is to come. Due to the lack of homes in Philadelphia, the market remains a seller’s market. The basic rule in Economics is when there is high demand for real estate and not enough inventory, buyers are willing to pay more for properties. That’s what’s happening right now in the Philadelphia real estate market. Housing supply is down resulting in a buyer bidding war, which also drives price points higher. There’s no evidence that supply will increase, thus experts project price appreciation will continue over the next twelve months. Below is a graph showing a forecast released in the last 60 days:

Experts are worried that many homeowners that entered into a mortgage forbearance, due to the pandemic, may face foreclosure.  However, when you look at all the data, it’s clear the actual level of risk is quite minimal.  

Ivy Zelman, CEO of Zelman & Associates  an expert in real estate, was very firm in a podcast interview last week saying…

“The likelihood of us having a foreclosure crisis again is about zero percent.”

With demand high, supply low, and little risk of a foreclosure crisis, home prices will continue to appreciate.

To sum this up…

Over the next year, we will likely see home prices in Philadelphia continue to rise given the continued lack of inventory of homes for sale. Not even the coronavirus can change this market!!

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