Realtor Erica Deuschle listed a house in Havertown valued at $ 450,000 on Monday. Four offers later, the house signed a contract on Wednesday evening.
The market usually pauses a little in September as families move into the school year. But historically low interest rates and the desire for more space due to the pandemic have fueled and sustained buyer demand. The pandemic drove the normally busy spring market into summer, and market activity has remained high into early fall.
"I honestly don't see any slowdown anytime soon," said Deuschle, who works for Berkshire Hathaway HomeServices and Fox & Roach Haverford on the Main Line, Philadelphia, Delaware County and Montgomery Counties.
In the Philadelphia metropolitan area, the number of homes sold in 10 days or less rose from around 1,730 in September 2019 to around 4,250 last month, according to the multiple listing service Bright MLS. And sales hit a 10-year high in September, with around 8,310 homes sold. In September, more than 1,900 more houses were sold than in the same month last year.
The region saw a few hundred fewer closed sales in September than it did in August, but the roughly 4% decline is much smaller than the nearly 17% decline the month has seen on average over the past five years over that period, according to Bright MLS.
June, July and August were strong months for the Philadelphia area real estate market, said Chris Finnegan, director of marketing and communications at Bright MLS, and "many of the trends we saw continued into September". The Philadelphia area is "one of the hottest markets" in the country, he said.
"These markets are roaring," he said. "I think they'll keep roaring in the fourth quarter."
The low interest rates that are tempting buyers to enter the market averaged 2.9% for a 30-year fixed loan at the end of September and fell to a record low of 2.81% this week, according to mortgage financier Freddie Mac. Interest rates are expected to remain at historic lows through the end of the year.
Jamie Ridge, President and Chief Executive Officer of the Chester County-based Suburban Realtors Alliance, anticipates the strong seller market will continue through the end of the year, but rising coronavirus cases in the fall and winter could be a wild card .
"This market was definitely charged by the lack of a market in the early months of the pandemic," he said when Pennsylvania shut down personal real estate activities. He does not expect any further shutdown due to the economic impact.
"The real estate market is kind of a savior for the local economy right now," he said. Economists have called residential real estate a bright spot as companies close and unemployment remains high.
New registrations of single-family homes increased year-on-year and reached a 10-year high in September. However, those gains did not match strong buyer demand and a persistent shortage of inventory. At the current sales rate, the supply of available single-family homes would sell in about 1.5 months in September, an all-time low, according to Bright MLS.
The number of new and active offers in the region increased from August to September. Compared to September 2019, new registrations in the region rose by around 550 last month.
Homeowners in their early and mid-50s are considering scaling down years ahead of schedule to take advantage of the current market, said Deuschle, the Haverford-based agent. People usually talk about selling their home for years before starting the process, but a convergence of favorable market conditions has "made people tear the pavement off".
"Salespeople sometimes jump in before they even know where they're going," she said. "They know it's a good time to sell, so they want to take advantage of it."
Buyers continued to wage bidding wars for homes in September due to low inventory levels and fierce competition.
"Buyers are watching how prices rise," said Deuschle. "They feel the urgency to get where they want to go and settle down before the values may rise any further."