To be a successful real estate agent, you need to know your market. You need to know if people are buying or selling, where they are looking, and how these factors affect how you serve your clients.
The 2020 market will vary depending on the city, and it will even vary between neighborhoods in the same city. It’s always important to do your own specific research. Here, we’ll go over a few general market trends to guide you and talk about 2020 trends in Philadelphia, specifically.
Buyer’s Market vs. Seller’s Market
A seller’s market is a market condition in which the number of properties for sale is lower than the demand for houses. There are a lot of people looking to buy but not a lot of properties for sale.
A buyer’s market is any market in which there are a high number of sellers and a low demand. There are a few people looking to buy but a lot of properties for sale.
A buyer’s market often leads to a more favorable price for the buyer. A seller’s market allows the seller to have more power and stick to their demands. A license holder should always know what type of market they are in so they are ready to negotiate for their client.
Pennsylvania Shifting to a Buyer’s Market
For the past few years, Pennsylvania has leaned towards a seller’s market, but experts predict a shift towards a buyer’s market in 2020. License holders will need to cater their approach to this shift and prepare their sellers for more negotiations and compromises.
Pennsylvania Property Stats
To give you a better idea of where the market is and where it could go, here are a few stats on Pennsylvania real estate:
The median home value is around $200,000.
On average, home values have gone up about 4% in the past year.
The average home spends about 80 days on Zillow before selling.
The average rent price is around $1,300 per month.
These data points show that home values are going up (which investors like) but property prices are still relatively low (which investors also like this). This means Pennsylvania is a hot market for property investors. It also helps that Philadelphia is growing quickly — more quickly than the country, on average. This makes Philadelphia, specifically, a prime area for real estate investment.
Properties spent a fair amount of time on Zillow before selling, suggesting more of a buyer’s market. License holders should cater their strategy to accommodate this trend.
But remember, these stats represent averages. It’s important to look further into the trends in your specific city. Know your market — it will help you to be the best, most profitable agent possible.
Real Estate Market in Philadelphia
Real estate market trends vary between states and cities. What is projected to happen in Pennsylvania might not be true for every city. Let’s look at trends in Philadelphia. As Pennsylvania’s largest city, the trends in Philadelphia will affect the state as a whole.
Philadelphia has a significant student population. This means leasing agents will need to prepare to help students find housing in peak seasons and keep tabs on the most popular apartment complex in desirable areas for students.
Philadelphia is also a popular tourist destination. As more and more people are utilizing Airbnb over hotels, properties rented out as Airbnbs are doing extremely well. This is a large draw for investors. License holders should identify ideal Airbnb properties to show their investors.
In terms of population, Philadelphia is right up there with New York, Boston, San Diego, and San Francisco. But property affordability is much better in Philadelphia than in these comparable cities, coming in around 35% below the national average.
Because of housing affordability, more investors are coming to Philadelphia every year. License holders should stay on top of investing trends and keep an eye out for properties that might be good for house flipping or business investments. Read more about how to know if a market is good for house flipping and check out our ultimate guide to house flipping.
Philadelphia is unique in that there are more townhouses on the market than single-family homes. Investors like townhouses because they’re perfect to use as an Airbnb property. Philadelphia license holders would be wise to keep an especially close watch on townhomes.
Not sure what a townhouse is? Read about the differences between condos, co-ops, and townhouses.