Market Updates

As the market recovers, there are plenty of statistics to juggle: some numbers are good, and some numbers are bad.  Overall, the recovery in the Philadelphia area* continues, albeit slowly.  Among the objective criteria that are easy to evaluate are unit sales and dollar volume.

Unit sales continue to improve, while average price continues to fall – these are natural results of the tax credit delirium in 2009-10.  This may continue through 2012.  If it does, there probably will be more units sold in 2012 than in 2011 (first time in six years!); but it will be a close race to see if dollar volume increases because of the excess inventory: more properties available = more pressure on prices.

With a bit of luck, 2012 will see a reduction to 5-6 months of inventory in some counties . . . if the recovery continues its slow pace, it is more likely that average price will suffer a little as excess inventory in the lower price ranges is absorbed, s-l-o-w-l-y, by the return of first-time buyers.

The chart below shows the average price of a property in the 10-county Philadelphia area* in the month of October – it demonstrates the short-term impact of the tax credit in 2010, while also showing that, overall, average price has not suffered greatly in the area* in the past few years (in comparison to CA, AZ, NV, FL, etc.)


An interesting anomaly (and, usually, anomalies are not harbingers of good tidings):  the three counties with large cities, Mercer County with Trenton, Camden County, and Philadelphia County, had fewer unit sales in October 2011 than they had in October 2010.  Apparently, the suburban counties continue to recover while urban counties showed signs of, hopefully, a hiccup (and not a stall!).


July, August and September unit sales comparisons to 2010 were more positive than October, but the recovery continued with the fourth consecutive month of more unit sales than the same month last year.  This newsletter will compare October-2011 to October-2010.  The information was gathered from the “Market Statistics” reports in TREND:

· Closed units (3,200+) in October-2011 were 6% above October-2010:  up 8% in PA and up 1% in NJ

·  Closed dollar volume (above $784 million) was up fractionally (less than 1%) compared October-2010:  up slightly less than 1% in PA and down slightly in NJ

· Pending properties increased 16% in October-2011 compared to October-2010:  up 14% in PA and up 19% in NJ

· Distressed properties:  16% of closed sales in October-2011 were distressed properties – the percentage of Short Sales continued to be slightly above 2010 levels (6% vs. 5% in October-2010), but the number of foreclosures continue to be greater than the number of short sales (evidence of banks’ reticence to understand the long-term needs of the market and insist on a short-term policy of preferring foreclosures over short sales)

· Average price ($239K) in October-2011 was down 5% compared to October-2010:  PA was down 7% ($240K) and NJ was down 1% ($237K)

· Average days on market for closed units (residential re-sales) increased sharply compared to October-2010:  19% higher in PA (99 days), and 17% higher in NJ (118 days)

· There were 7,100+ new listings in the October-2011 – the lowest number of new listings in October in more than a decade – strangely enough, this remains a positive sign because fewer new listings mean less inventory and that should lead to more stable prices in 2012!


Inventory is a strange animal.  In the Philadelphia area*, inventory by price range shows approximately 10 months of inventory in the “under $300K” market, and about the same amount on inventory in the “$300K-$700K” price range.  There are several counties (Mercer and Camden in NJ, and Delaware County in PA) where there is more inventory in the lower price range (under $300K) than there is in the $300K-$700K range.

Higher price ranges (above $700K) have less inventory than last year, while the lower price ranges have more inventory. This is not, usually, the sign of a recovering market (recovery comes from the “bottom-up”), but it is a result of fewer first-time buyers in the market this year and there should be less inventory in the lower price ranges by the end of 2012 as first time buyers return to the market in greater numbers.


Per the chart, in early October 2011 in the Philadelphia area*, inventory levels remain high, but they continue to recede:

Berks County is down to 10.0 months from early October’s 10.6 months

Bucks County is down to 8.7 months from early October’s 9.4 months

Chester County is down to 8.7 months from early October’s 9.3 months

Delaware County is down to 11.1 months from early October’s 12.6 months

Montgomery County is down to 8.6 months from early October’s 9.1 months

Philadelphia County is down to 10.5 months from early October’s 10.8 months

Burlington (NJ) County is down to 13.7 months from early October’s 14.1 months

Camden (NJ) County is down to 15.9 months from early October’s 16.2 months

Gloucester (NJ) County is down to 13.7 months from early October’s 14.3 months

Mercer (NJ) County is down to 11.1 months from early October’s 11.9 months (biggest drop!)


Detailed charts (PDFs) are available through . The data specifies average price, dollar volume, units sold, pending properties, new listings, days-on-market and months of inventory (“absorption rate”) for the Philadelphia area* and each county (below).  This month’s data contains charts comparing Q3-2011 to previous years’ Q3 results, along with comparisons of September 2011 to previous Septembers in the past ten years.

The cost is $25 and the PDF file will be forwarded (for your use with clients) within hours!  Quarterly ($50) and annual subscriptions ($100) are available.  You may review the charts before you forward your payment.

*Statistics described in the above information as “the Philadelphia area” are downloaded from the TREND Multiple Listing Service, and they are based on information from Berks, Bucks, Chester, Delaware, Montgomery and Philadelphia counties in PA; and Burlington, Camden, Gloucester and Mercer counties in NJ


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