Strong home sales and lower average home prices are driving the Pennsylvania housing market out of its modest downturn, with appreciation forecast to develop in most of the state by the end of the year.
The Pennsylvania housing market has seen little change in many regions of the state compared to other areas of the nation, and a modest number of foreclosures. Pennsylvania has been a major exception in the U.S. real estate collapse. An older population provides a more stable market for most of the state, with fewer people who want to move to other areas of the country.
The job market in much of the state has improved, and unemployment remains fairly modest compared to the rest of the nation, the single biggest indicator for any housing market.
Philadelphia home prices declined at double-digit levels, but are showing more promising signs with stronger sales. The city of brotherly love has taken the worst beating in terms of the real estate downturn in Pennsylvania, but is slowly making a transition to better times.
After years of economic stress, the suburbs in Bucks, Chester and Montgomery counties gained the most in terms of home values and are forecast to appreciate through the end of the year as the region is projected to pull out of the downturn. Philadelphia home prices are forecast to decline a slight 0.8 percent through the end of the year.
In Pittsburgh the bottom of the market is either near or has already passed as record low mortgage rates and lower home prices push more buyers into the market. Demand has increased for the region and is expected to continue as the market moves towards stabilization.
Average home prices in Pittsburgh are forecast to inflate 2.9% by years end. The market has seen home sales improve into the spring selling season.
In Erie, existing home sales have been improving for almost two years as the average price of a home rises. Fewer foreclosures than other areas of the country have aided the market in its recovery from the financial crisis. Record low mortgage rates have pushed home buyers back to make home purchases. Erie is forecast to see better home prices, averaging 2.1% higher for the year.
In Allentown, foreclosures slowed as a result of banks and mortgage servicing companies’ forgeries on foreclosure documents, but then picked up. The hard hit community suffered through the collapse of the steel industry, and has suffered just about all it can in the foreclosure crisis.
Home sales should see better days in the second half of the year as Allentown finds the bottom of its market, and is then forecast to experience higher home prices. Average home values are forecast to climb a modest 1.6% for the year.