During the COVID-19 outbreak, an increasing number of workers were forced to work from home, causing an increase in renters and first-time home buyers. The disparity between the available residences and the actual demand from homebuyers forced the Pennsylvania housing market to push home construction to meet the rising need for homeownership.
With high demand for both multifamily and single-dwellings, the number of homes being constructed spiked; the highest number to be recorded since 1973.
According to Zillow, Pennsylvania house prices have risen 14.6% in the last year and will continue to climb in 2022 and 2023. Home prices in the Pittsburgh Metro area have risen 13.5% in the last year, and Zillow expects they will grow 16.3% in the next year. Allegheny County house prices have risen 13.3% in the last year (current value = $217,075) and are expected to climb further in 2022.
This article will provide you with valuable insight on forecasted Pennsylvania housing market trends for 2022-2023 and help you get ideas about the average house price trends early on.
Pennsylvania Real Estate Market in 2023
Things are moving quickly for buyers and sellers, and thanks to low mortgage rates, there are fewer properties for sale, coupled with robust buyer demand.
This past year, the COVID-19 pandemic hurt both the financial and real estate markets. Many homebuyers went on a buying spree, resulting in the largest home sales in more than a decade.
Millennials are now beginning to purchase their first houses. In the following year, this additional demand will have an impact on the already sizzling market. House prices would slow down if prices rose another 11.2 %, compared to the current rate of growth.
Mortgage rates are likely to increase in 2023, despite being at an all-time low. While the market will eventually return to normal, the Pennsylvania property market will continue to exhibit as a seller’s market.
Forecasted Inflation of Real Estate in 2023
The value of properties has changed during the last 12 months, increasing 12 times and falling 0 times. The market will take time to return to normal. Home inflation will not revert to the levels experienced prior to the pandemic until 2023.
The analysis, which was released in November 2021, is the first to forecast housing market activity until 2023. Nonetheless, The pandemic is likely to indefinitely increase the floor for U.S. home values.
According to Fannie Mae, by the middle of 2023, the average cost of a previously owned house will have surpassed $400,000. The median new home price will reach a new high of $464,000 by 2023, about $100,000 more than it was at the beginning of 2021.
The market’s current patterns are the result of historically low borrowing rates and shifts in home preferences. Mortgage rates are expected to rise in 2023, owing to consistently rising inflation. The market will stall as mortgage rates rise, making 2022 and 2023 a better time to buy.
Pennsylvania Real Estate Price Forecast in 2023
Many features of the current market have reporters scratching their heads, unsure of what might happen next. This present real estate industry is being referred to as a bursting bubble.
Housing prices in Pennsylvania increased by about 20% in 2021, and while the rate of increase will moderate, experts predict that prices will continue to climb in general. The National Association of Realtors forecasts a 5.7% increase in housing prices in 2022, while Realtor.com predicts a 2.9% increase. Some average house prices are beginning to fall. The annual rate of increase in property prices has slowed for the third month consecutively. The housing market is expected to revert to normalcy as mortgage prices hike, despite the fact that this market remains exceptional.
The market’s current patterns are the result of historically low borrowing rates and shifts in home preferences. Economists predict that mortgage rates will rise in 2022 as financial markets anticipate inflation. As mortgage rates climb, the market will slow, leaving the year 2022 and the year 2023 a preferable time to purchase.
There is still affordability for someone wishing to buy a home and take advantage of historically low mortgage rates.
Trends in House Selling by 2023 in PA
Source: Wallet Investor
The pandemic has thrown the housing market into disarray. In comparison to the previous year, the national home values have grown. Here are five of the most popular trends:
1. Population decline in the city
During the pandemic, it was a frequent theme that larger cities were pushing people to flee for greener pastures, but for some Pennsylvania cities, it has been a slow burn. Although the population is decreasing, it is only by a modest percentage. In the last decade, the population of Pittsburgh has decreased by 1%. The fact that not many new people are moving here has kept housing affordable for now.
2. The value of the state’s house is increasing
The state of Pennsylvania experienced similar growth in house prices to the rest of the country, with a 16% gain in house value. The average home is worth around $234,684. The pandemic undoubtedly contributed to people’s desire to escape larger cities, where many local businesses were closed. However, one may argue that low mortgage rates are also influencing people’s desire to purchase homes now.
3. Construction of more houses
Naturally, the pandemic halted a lot of corporate operations, including the construction of new homes. Now that construction employees have been able to resume work, they are working to catch up in order to satisfy the increased demand.
4. Affordability in Pittsburgh is at an all-time high
Pittsburgh was no exception to the rising house value trend, with a 20% increase in the number of homes for sale. House prices are growing and more people are buying homes. Rent declined by roughly 5% in this city, compared to nearly 30% in cities like San Francisco and New York.
5. There is a decrease in the number of homes available
Some of the most popular locations have already seen a decrease in the number of residences for sale. In just one year, the quantity of available homes in the Philadelphia area has decreased by nearly half. People are buying up property in Pennsylvania faster than fresh sellers are ready to put their properties on the market.
Average House Price Trend by 2023 in PA
In Philadelphia City, the average home’s value (the listing price) is $187,703 USD. In one year, housing prices in Philadelphia might grow from $187,703 USD to $192,305 USD.
Real estate agents had a terrific year in 2021. They received many offers, some above the asking price, while interest rates on mortgages remained low. However, by 2023, the number of properties for sale will have increased, making the housing market more competitive.
While sellers should still expect their properties to appreciate in value, the market is shifting in favor of buyers. The median home price is starting to fall, but there is no imminent danger of a housing crisis.
Throughout 2022, home prices are predicted to continue to rise. However, rising housing prices may have an influence on affordability, resulting in a decline in asking prices. The competition in the market in Pennsylvania has resulted in a rise in the median price. The median house price is up 16% over the previous year.
Pennsylvania is also home to a large number of multi-million dollar residences. Feel free to check out the most expensive home sales in Pennsylvania.
Pennsylvania has grown in popularity since the 2020 pandemic. Remote employees benefit from significant cost savings, a flexible schedule, and frequent connections with family. If you’re considering a lifestyle change, Pennsylvania might be the place to reclaim your health and your life as a homeowner.
Some people are still relocating from big cities like New York and looking for cheap housing in Pennsylvania. However, before relocating, it’s important to understand the cost of living in Pennsylvania.
There are low-interest rates and a greater desire to acquire a property in the Philadelphia metro area is on the rise. Living in a Pennsylvania home comes with many perks like accessibility to highly ranked health facilities, the best universities, a rich history, and beautiful architecture among others.
Sellers will gain more from the Pennsylvania real estate market than buyers. With homes selling at higher-than-average prices and at record speed, now is the time to sell. If you’re seeking to buy, be prepared to pay more or wait a little longer until prices fall. In either case, whether you’re buying or selling, this market is moving swiftly.
Are you looking to buy or sell real estate in Pennsylvania? Luckily, we buy houses in Pennsylvania, and we are among the best companies that buy houses in Philadelphia. If you are looking to sell your house fast, we are also cash home buyers in Aston.
Problem Property Pals can assist you in navigating this market. Make an appointment today!