Philadelphia Investment Market Stats - Week 3

Due to the fourth big snowstorm of the season I'm a few days off track and didn't get these stats up last Thursday. However, I compiled them and snowstorm now they're ready for your review. The next installment will be coming out this Thursday, the 4th, at which point we'll have four consecutive weeks worth of data.

From this data-set one happy trend that I see is that inventory levels are dropping steadily for both shells and 2-4 unit properties. Inventory measures the number of sales relative to the number of active listings and gives an idea of whether buyers or sellers hold the upper hand in a given market. With a current inventory of only 5.7 months, it looks like the market for shell properties is on the verge of being a seller's market. The feel on the street is that in certain neighborhoods pricing power for shell properties has certainly shifted back to the sellers somewhat, with multiple offer situations becoming more and more common. I think this is more due to a rationalization of initial list prices by sellers than a surge of buyer interest in the market - if sellers price their properties right, even nasty shell properties - they will sell quickly. While duplex, triplex, and 4-plex properties all saw inventory levels drop in each of the last two weeks, they are still at very high levels (over 2 years worth of 4 unit inventory at the current sales pace), indicating a real buyers' market for those properties. With FHA financing and the first-time buyer tax credit still available buying a 2-4 unit property as an owner occupant has never looked smarter.

When it comes to larger multifamily properties, there really doesn't seem to be a silver lining. Sales at a snail's pace make inventory levels look very high and much of the current inventory is so overpriced or obsolete that it will be on the market for a long time, dragging down the market-wide statistics even further. As a sign of how slow the market for 5+ unit properties is, there were no fresh sales in this category in past week, even though it included the last week of the month, always a popular time for closings.

Feel free to comment or ask questions related to these statistics.