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Recent Figures Show New Home Prices Climb, Sales Fall in Philadelphia

Posted on: May 06, 2013 07:28:24 AM

The Philadelphia, PA market saw a drop in new home closings year-over-year in January, moving south after a gain in December 2012. New home closings saw a drop of 39.9% from the year earlier to 223 after closings increased 10.4% in December from the year earlier.

A total of 4,881 new homes were sold during the 12 months that ended in January, down from 5,029 for the year that ended in December.

New home closings made up 6.2% of overall housing closings, less than the 9.6% of closings a year earlier. Following a year-over-year increase in December, closings of new and existing homes dipped year-over-year in January.

Pricing and Mortgage Trends

For newly sold homes, the average price grew 11.8% year-over-year in January to $397,897 per unit. This bump is an improvement over the 2.7% rise in December year-over-year.

The average mortgage size on newly sold homes saw a rise year-over-year along with new home prices. In January 2013, there was a 5.4% rise in the average mortgage size, reaching $301,524. In December 2012, average mortgage size increased 5.2% from a year earlier. Of the overall sale price, the percentage that was being financed fell 4.6 percentage points year-over-year to 75.8% in January 2013. This was a swing downward after a 1.8 percentage point rise in December from a year earlier.

Other Market Trends

As a share of new home closings, single-family home closings have climbed from last year while the share belonging to attached units has fallen. Single-family home closings climbed from 54.4% of new closings in January 2012 to 61.4% of closings in January 2013. Conversely, the share of new home closings belonging to attached units declined to 38.6% of closings from 45.6% of closings.

For all new homes sold, the average unit size fell 10.3% year-over-year to 1,783 square feet in January 2013. This drop was opposite the price surge, a pattern also seen in December 2012 when the average size of newly sold homes dropped 21.8% to 1,840 square feet.

Foreclosures and real estate owned (REO) closings remained a burden on the market. Out of all existing home closings, foreclosures combined with REO closings represented 31.3% of closings. They accounted for 38.6% in January 2012. The percentage of existing home closings involving foreclosures declined to 16.2% in January from 25.2% a year earlier while REO closings as a percentage of existing home closings rose to 15.1% from 13.3%.

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