Thursday, May 14, 2009

Could the Philadelphia Real Estate Market be Recovering?

Philadelphia skyline as seen from the South St...Image via Wikipedia

Image via Wikipedia

As long as I have been in the real estate business, I have been told that real estate is an economic leader. We are first in and we are first out. A cliche that has been true in every recession I have experienced.

You'll remember that residential real estate was the first part of the economy to feel the changes from the boom to our current economic readjustment. Economic indicators were pointing to issues in the market just before we began experiencing the effects of those issues. The good news (for those of us who own homes or invest in real estate) is that we seem to be seeing some signs indicating that may be the next step in the process.

In a recent article in Realty Times, Kenneth R. Harney pointed out the following positive economic indicators;

Pending home sales took a 3.2 percent jump last month -- the second straight month of positive growth. These are signed home sale contracts that haven't yet gone to closing, but are scheduled to do so in the next 60 to 90 days.

Lawrence Yun, chief economist for the National Association of Realtors, said we're now at "the leading edge of first time buyers responding to very favorable affordability conditions, and an $8,000 tax credit."

Mortgage applications for future home purchases also surged again, up five percent nationwide last month, according to the Mortgage Bankers Association. Rates are firming up in response to the rising demand for mortgage money. They rose last week on average to 4.8 percent for 30 year fixed rate loans and 4.6 percent for 15 year mortgages.

In a market like Philadelphia, where our average prices have seen little readjustment from their historically affordable levels, these indicators may indeed herald the long awaited "bottom" of the residential real estate market. Fueled by basic human needs rather than rampant speculation, our market has remained stable, with only single digit price adjustments inthe past 2 years, and some makret areas actually seeing increases in price even in this environment.

So if you have been thinking of "making your move" in the real estate market, now may just be the moment you've been waiting for. As I have mentioned in earlier posts, buying real estate for a longer term financial benefit has always been a good thing to d, since time will ease any market adjustments in your favor. With these indicators, that logic is reinforced by the immediate benefots of the current market. So i f you have a reason to buy, and have been waiting for the right time, your wait may well be over.

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