Time will tell how the real estate market in Philadelphia will respond as companies slowly call employees back to the office after the novel coronavirus pandemic forced offices to close and people to work from home.
Real estate agents Patrick Campbell, team leader at Compass Inc., oversee- ing the greater Philadelphia area, the Mainline and Southern New Jersey, along with agents Sean Kaplan, Moira McFadden and Becca Fischer reflect on the market.
Campbell said he has been slowly receiving phone calls from people who have been staying at their shore homes and their Pocono Mountains’ homes during the pandemic, as well as people wanting to move up from a smaller city home to a larger city home.
“The Philadelphia real estate market is very seasonal,” Campbell said, with the spring market typically the busiest market season, slowing down in the summer months, followed by a strong fall market season.
Real estate agents expect a strong market as they head into the fall season. Agents said the affordabil ity of housing in Philadelphia compared to other major cities has drawn people to move to the city, also known as Philly and the City of Brotherly Love. This was evident after the real estate market reopened when a moratorium was put in place on the real estate industry in April and May 2020 to help flatten the curve of COVID-19 cases.
People in New York City realized they could buy a place with more room in Philly with a mortgage for half the price – instead of living in a $900,000 one-bedroom apartment or condo or $3,000 to $4,000 rental, they could spend $500, $600, $700,000 on a home in Philly, according to McFadden.
Philly is centrally located along the northern Eastern corridor and is near other major cities. For those who moved from New York City to Philly, and may need to start going to the office two to three days a week, can hop on a 90-minute train ride from 30th Street into Manhattan. Philly is also two hours away from Washington D.C.
It was just last year when things were up in the air for the real estate industry because of the moratorium.
“It was scary for everybody, we weren’t sure what to expect,” Campbell said, recalling the housing market crash after the recession in 2008. He has been a real estate agent since 2004.
However, it was the opposite. The real estate market has been booming like no other.
“It turned around so fast,” Kaplan said. “The market leading up to 2020 was very strong, COVID just threw fuel on that fire. It really has been the perfect storm of [the pandemic], low interest rates and builders gun shy to build.”
Campbell said everyone was looking for extra space. He said the past year saw a lot of trades, whether upgrading from a studio to a one-bedroom condo, people living with their parents wanting their own space, to speeding up the process on decisions for families who were looking to move to the suburbs in three-to-five years.
Becca Fischer, who has been in the real estate business for 10 years, said connections at one point or another bring people back to the city.
“I’m finding a lot of families who may have one parent from the area come back because they love Philly and want to be here,” she said, adding she is also seeing empty nesters make the move into the city downsizing from larger homes.
Although the market is essentially booming, especially in the suburban market, Kaplan said the shortage of inventory is frustrating at times with offer after offer and very few listings to work with. He said, even though the suburban market saw a boom, the Philly market has held its own.
With demand to buy high and inventory low, buyers – aside from offering well over the asking price – are locking down sales by waiving inspections and mortgage contingencies.
In the current market, it’s not uncommon to see multiple “six, seven and eight to as many as 13 to 15 offers have been made on one property,” Kaplan said.
With anything, Kaplan said the current market won’t last forever and said he is starting to see the “red hot” market begin to “cool.” And
as they enter the fall season market, he is starting to see the slight shift of people “flipping the script” and considering moving back into the city.
Founded in 2012, Compass, a technology-based real estate broker providing an end-to-end platform that empowers its residential real estate agents to deliver exceptional service to seller and buyer clients – is headquartered in New York City with offices across the country. With 18,000 agents, Compass is now the country’s largest independent real estate brokerage, according to its website.