Philly slowly getting rid of distressed properties
In many respects, foreclosed homes and distressed properties lingering from the housing collapse of the late 2000s are still affecting Philadelphia's housing market. According to recent data from a real estate information aggregator, home prices throughout Pennsylvania declined 0.6 percent between July 2011 and July 2012. However, when distressed sales are excluded, home prices in the region actually increased 7.8 percent during the same period.
What does this mean for homes for sale in Philadelphia, PA? In general, it means two things: that there could be some great values in the region for thrifty buyers, and also that the market could experience a rebound once the distressed properties are sold.
Once the foreclosed homes are sold, and full-priced homes once again dominate the inventory, sales prices are expected to rise. According to some real estate professionals in the area, this process has already begun.
"There is no question the number of foreclosures have fallen and prices are firming up," Stuart Huffman, Ph.D finance and real estate professor at Temple University, told LoanSafe.
Indeed, the data supports Huffman's assertion. The number of foreclosed properties on the market has decreased by half in some counties in the Philadelphia area, the source reports. To Huffman, this suggests that a price rise could be in store in the second half of 2012 or the first half of 2013.
This process is also expected to help the region minimize its backlog of for-sale properties. At the moment, the City of Brotherly Love is one of the only cities in the country that is adding to its inventory, according to Forbes. The number of currently listed homes has grown by 3.5 percent in the last year, which is in stark contrast to many regions where the inventory has shrunk to almost zero.
Unsurprisingly, this glut of for-sale homes has resulted in properties that stay on the market for a considerable amount of time - the median stay for a for-sale property in Philadelphia and surrounding suburbs is 102 days, LoanSafe reports.
However, with the stock of distressed properties dwindling, the length of time on the market could change in the near future. For example, Joyce Cornell, a local real estate professional, believes that these properties will be off the city's market in the coming months.
"The region is working through its foreclosed properties," she told LoanSafe.
In the meantime, now could be a good time for creative homebuyers to find a good value in a city that many local experts expect to strengthen in the coming months.