Pennsylvania

Sluggish housing sales are sending Pennsylvania real estate markets right into the national real estate recession, despite having markets that never got caught up in out of control appreciation.

Home sales are softening in Philadelphia and Pittsburgh after two quarters of slower growth. The national credit crunch is making it harder for buyers to get mortgages, not that there are that many buyers in the market place. Lenders in most of Pennsylvania no longer offer mortgages that require no money down, and those that are offering them most people don’t want to get.

Lenders are requiring more for down payments as fall out of the credit crunch mounts. A major reason Pennsylvania housing markets appreciated at all during the national real estate boom was first time buyers and 100% financing.

In Philadelphia, where many financial and insurance companies make their headquarters the market has slowed, and prices are beginning to fall. Philadelphia has never been a boom to bust real estate market, but the glimmers of hope home owners had for a boom have long ended.

City	Forecast
Philadelphia	− 4.7%
Pittsburgh	− 5.8%
Lancaster	− 4.1%
Erie	− 2.3%

The five counties surrounding Philadelphia, the city that has the nickname as the City of Brotherly love is anything but that these days for home owners, who want to sell their homes. An increasing inventory of homes and condos are hitting the market daily and prices are beginning to come down. A growing majority of home owners are losing equity in their real estate.

However, as the winter weather warms into spring time the Philadelphia market should begin to show some signs of stabilization and is forecast by Housing Predictor to deflate just 4.7% in 2008.

Pittsburgh has a growing foreclosure epidemic developing and home prices in many neighborhoods in an around Pittsburgh are starting to show major price devaluation as a result. The national real estate recession has hit Pittsburgh with the force of the old Pittsburgh Steelers "Steel Curtain."

The market will have a difficult time adjusting to the change for a number of years, and is forecast to suffer considerably as a result, according to the Housing Predictor forecast. Home sales will be off through 2008 and average home values will deflate 5.8%.

In Erie there’s no doubt about it that it’s a buyers market. New home permits are down and the force of the national real estate recession has set up housing keeping.

Erie is a small less urban place on Lake Erie in upstate Pennsylvania, but like most of the state’s economy Erie is still dealing with fall out from the steel boom and auto business slow downs. There isn’t much steel manufacturing left in Pennsylvania. Erie will see a weaker housing market in 2008, but since prices didn’t get out of hand during the boom Erie will only see deflation of 2.3% for the year.

The real estate market in Lancaster is quite a different story. Home prices increased over the long haul of lower interest rates and will now see and adjustment period that should last well through 2008, depreciating an average of 4.1% for the year.