In the Philadelphia, PA market, new home closings slid year-over-year in March, and there were signals the market may be weakening with a percentage fall steeper than February 2016. There was a 20.3% drop in new home closings from a year earlier. This followed a 1.7% fall year-over-year in February.
A total of 4,933 new homes were sold during the 12 months that ended in March, down from 5,014 for the year that ended in February.
As a percentage of overall housing closings, new home closings made up 4.7%. This is down from the a year earlier when new home closings accounted for 6.4% of total closings. For new and existing homes, closings climbed year-over-year in March after also increasing in February year-over-year.
Pricing and Mortgage Trends
From March 2015 to March 2016, the average price of newly sold homes went from $416,470 to $414,729. This followed a 5.3% surge in February year-over-year.
For newly sold homes, the average mortgage size saw a decline year-over-year in contrast to new home prices. In March 2016, the average mortgage size on newly sold homes saw a 3.8% drop from a year earlier. In February 2016, average mortgage size on newly sold homes saw a 4.6% boost year-over-year from a year earlier.
Other Market Trends
Closings of attached units, as a percentage of new home closings, have grown from last year while closings of single-family homes have dipped. The share of new home closings belonging to attached units rose from 44.9% of closings in March 2015 to 48.4% of closings in March 2016. Meanwhile, single-family home closings as a percentage of all new home closings fell to 51.6% of closings from 55.1% of closings.
For all new homes sold, the average unit size dropped 10.7% year-over-year to 2,343 square feet in March 2016. In February, the average size of new homes sold went from 2,563 square feet a year earlier to 2,082 square feet.
Foreclosures and real estate owned (REO) closings continued to increase in March from a year earlier and stayed a drag on the market. Foreclosures and REO closings, taken together, accounted for 34.9% of existing home closings, higher than 32.4% a year earlier. The percentage of existing home closings involving foreclosures rose to 19.9% in March from 17.6% a year earlier and REO closings moved from 14.8% of existing home closings in March 2015 to 15.0% in March 2016.