let’s talk: THE REAL ESTATE MARKET – WHAT TO EXPECT IN 4Q21
With just 4 months left in 2021, I thought we might talk about what we can expect in the real estate world for the rest of the year. As many of you know, I am a licensed real estate agent in both New York (NYC) and Pennsylvania (the Philadelphia region). Both markets are experiencing VERY different shifts right now so I did a deep dive to see what’s going on around the country.
So, as we do, let’s talk Real Estate, let’s talk THE REAL ESTATE MARKET – THE LAST 4 MONTHS OF 2021…
1H 2021 RECAP
The first 6 months of the year was a time of SERIOUS demand for home buyers, and sellers found themselves selling their homes SIGNIFICANTLY over ask within hours of being on the market (think $30k, $50k, sometimes even $100k over ask with no contingencies – it was nuts). People were rushing to relocate away from major cities and into bigger spaces.
Now we are starting to see that slow down a bit. With the vaccine out there, and the world opening up again, buyers are starting to feel less pressure to relocate and abandon the cities they had called home. With the crazy bidding wars, buyers were getting frustrating and many decided to put their buying plans on hold until prices level out a bit more. While traditionally home prices do drop a bit in the fall, and we expect them to do so again here, they may not drop as much as they have in the past. While buyers are no longer willing to pay $50k over ask with no inspection, they are still interested in buying – the demand is still very much there it’s just not as desperate as it was 6 months ago. Now, that all being said, if the Delta variant becomes more rampant, and we see a whole new series of lockdowns, then we may experience the buyer frenzy again.
Now let’s take a closer look at the cities I know best…
NEW YORK CITY MARKET
With the world opening back up, people are making their way back to the city. Many who gave up their leases in 2020-2021 and are now in search of a new apartment again. Where 6 months ago, you could take your pick of multiple apartments with huge rental discounts, now we are starting to see units off the markets within days with very minimal and sometimes even no marketed discount. The city is on the up and up and landlords are looking to make up for lost rent and lost time.
The Philadelphia market is a bit different, people did not fully jump ship as they had in NYC. Instead, they went from apartment living to townhome living within the city limits. Yes, there were some that ditched the city life for suburbia (myself included), but Philly did not become a ghost town like NYC did. As people wanted their own space, they looked to buy their own homes downtown and because of that, we saw an 11% uptick in home prices YOY. Well, as of this past month or so, it looks like the market is finally starting to even out a bit. We are seeing more and more sellers dropping prices in order to move their homes faster. While the demand is still there, buyers are sick of engaging in bidding wars and are instead opting to wait before making their next big purchase. Last Spring we may have seen 10 offers on 1 property, right now we are seeing maybe 2 or 3 at a time.
Philadelphia is also unique in that it has two BIG groups of buyers; those looking for their primary residence and investors. Investors make up a HUGE portion of the Philadelphia market and we have actually seen them taper off a bit in their purchases recently. With the prices so high, investors are taking a step back in their acquisitions. It is much harder to sell a home that needs work right now, than it was 2 years ago- the sellers want top dollar because of today’s hot market and investors want the best deal so finding a middle ground is hard at the moment. I happen to understand both sides of the argument, while I represent sellers who want to sell their home to investors for top $$, as an investor I also know that I am not willing to pay that top $$ because that defeats the point of my purchase. PK and I are looking to grow OCK Properties here in the next 12 months but we are absolutely holding off right now until prices drop a bit.
What is going on in YOUR market?! Are you still experiencing bidding wars?! If you are an investor, are you buying right now?!
Address: 937 Cantrell St Philadelphia, PA 19148
Listing Price: $239,000
Come put your finishing touches on this home! This home features 2 bedrooms, an office, 1 full bath and 2 half baths throughout. Property is 90% complete with new framing, electrical, plumbing, flooring, windows, a mini split system, and a full bath almost complete. A space is framed out for a gas fireplace in the living room creating the ultimate cozy feel. State of the art kitchen appliances, white shaker cabinets and quartz countertops are INCLUDED in the sale and ready to be installed. Basement has washer/dryer hook-up, utility sink and room for a half bath PLUS a living space. Pick this property up for your next flip, rental or to use as your own home! ARV is $330k and rising rapidly.
Link to Listing
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