Philly home sellers still have the upper hand as most of the country shifts to a buyer’s market
Nationwide, one in five homes sold for more than the original asking price in February, according to Redfin. Shares of homes selling above and below asking price have returned to pre-pandemic norms.
Homebuyers in Philadelphia are facing more competition than buyers in other markets.
“Most of the country is shifting more into a buyer’s market,” said Daryl Fairweather, chief economist at the online real estate brokerage Redfin. “But Philadelphia is remaining more of a seller’s market.”
That’s thanks to the region’s advantageous location between the East Coast hubs of New York and Washington, the shortage of homes for sale, and the region’s relative affordability.
Elevated mortgage interest rates are tamping down on competition in more expensive markets, because high housing costs are pricing out buyers. (The average rate on a fixed 30-year loan was 6.64% last week, Freddie Mac reported Thursday; the 15-year rate was 5.82%.)
But in the market that Redfin defines as Philadelphia and Delaware Counties, the median listing price of a home in February was $280,000 — far below the national median sale price of more than $425,000, according to Redfin.
“Buyers aren’t as priced out as they are in other places,” Fairweather said.
The combined market of Philadelphia and Delaware Counties was one of only eight big metropolitan areas where a higher share of homes sold above the original listing price in February compared to the same time last year.
That’s according to an analysis of sales in the country’s 50 most-populous metros by Redfin.
Redfin analyzed data from multiple listing services and compared the original price at which an owner listed the property for sale with the price the property sold for. Many sellers lower their price after their home is listed.
Nationwide, the shares of homes selling for more than the listing price skyrocketed in the springs of 2021 and 2022, when buyer competition was fierce and more than half of homes sold for more than the original price. The shares of homes selling above and below asking price have now returned to what was normal before the pandemic.
Selling over and under asking
Homes are most likely to sell above the asking price in the late spring to early summer, according to Redfin. They’re least likely to sell for more during the winter.
About 24% of homes listed for sale in Philadelphia and Delaware Counties sold for above the original asking price in February. That’s roughly one percentage point higher than at the same time last year.
Most homes in the region — 62% — sold in February for below the initial listing price. But that share has dropped a few percentage points over the last year.
Homebuyers and sellers should be aware of the likelihood homes in their area will sell above or below asking price, so they know what to expect and how to behave, Fairweather said.
In the Philadelphia area, for example, buyers can try offering 2% to 5% under a home’s listed price if there are no competing offers, she said. But if a home is attracting multiple offers, buyers need to be competitive.
In the market that Redfin defines as Montgomery, Chester, and Bucks Counties, 36% of homes that were sold in February sold for above the original asking price. It’s a higher percentage than in Philadelphia and Delaware Counties, but the share dropped four percentage points in the last year.
Beyond the region
Nationwide, roughly one in five homes sold for more than the original asking price in February, according to Redfin. That’s down a couple of percentage points from the same time last year.
Almost two-thirds sold for less than the asking price. That’s up a few percentage points from last year.
And about 15% sold for exactly the original listing price — the lowest percentage for a February since 2019.
Homeowners in the Bay Area of California were most likely to sell their homes for more than the asking price in February. That’s because sellers there price their properties low to spur bidding wars, according to Redfin.
The San Francisco metro area had the biggest increase — from 50% of homes selling for over the asking price last February to 57% this February.
Sellers in Florida and Texas were most likely to sell their homes for less than they asked for. In Florida, for example, it’s common to price homes high and sell for less. Buyers know that and bid less for homes, Fairweather said.