The real estate market in Phoenixville, Pennsylvania remained robust and competitive in 2023, despite it being a challenging year for the national housing market. This was in part, due to the area’s thriving economy, diverse job opportunities, and high overall quality of life the area provides. Still, for buyers, sellers, and investors interested in Pennsylvania real estate, this is a unique time to be navigating the market, and there is plenty of uncertainty about property buying and investments.
Now that we’re well into 2024, what will the rest of the year look like for the real estate market in Phoenixville, Pennsylvania? What are the general trends that are currently shaping and will shape the housing market, both on a national and local scale? How should homebuyers and sellers strategize to ensure that they get the most from their real estate ventures? This guide will answer these questions and more.
2023 Market Recap
National trends and market influences
Before we delve into what lies in front of us for the rest of 2024, we need to look at what was the state of the real estate market during the early 2000s. To say it had its highs and lows would be an understatement, and understanding it will shed light on what is likely to happen not only in 2024 but beyond.
2023 was a difficult year for real estate. The Federal Bank had already begun raising interest rates as far back as the first quarter of 2022, and the early part of 2023 saw little relief for the market. In many areas across the US appreciation stalled and in some places, homes even began to depreciate. It must be noted that at this time the housing market had experienced years of meteoric growth, (a reason why the Federal Bank felt the need to cool the market with high interest rates) so homes across the country were being sold for record prices.
The high interest rates made potential homebuyers more cautious in their approach and many first-time homebuyers were simply priced out of the market. Sellers too were wary. Though in some areas they could still get extremely high prices for their homes, they would then be in the position of a buyer and this would mean getting a new mortgage at considerably higher interest rates than they had done previously. Many chose to simply sit on their property till better conditions (lower interest rates) came and there was more demand in the market. This would raise prices to the levels that sellers were listing them at. It would also then be a better time to get a new mortgage at more favorable interest rates.
The result was home sales fell considerably and many who were looking to sell took to decreasing listing prices. As expected and intended, the market cooled, correcting prices to much more sustainable levels.
Was This the Story in Phoenixville?
It’s difficult to say that Phoenixville remained unscathed by the events of 2022 and 2023, however, if we look at the data we see steady appreciation throughout the last five years.
In May 2021 the median sale price of a home in Phoenixville, PA was $349,250. A little under three years later in March 2024, the median had risen to $485,000. This represents a rise in value of almost 33% in under three years.
This is not to say that there has been a straight line of constant appreciation, all markets have times of strong appreciation and times when appreciation is more modest. Phoenixville even experienced a record high in August 2023 with a median sale price of $640,000 and a low of $395,000 in December 2023. However, these figures tend to be outliers, and if we look at a prolonged period of time, we see that Phoenixville, PA is a place where buyers can be very confident they are buying into an area that will see steady and substantial growth in home value.
What to Expect During 2024
The housing market in Phoenixville, Pennsylvania at the start of 2024 saw great promise despite national trends. The market continued to be a seller’s market, meaning there was great demand for homes in the area. Average home prices were $409,000 and many homes received multiple offers from buyers. Most homes went pending in about 28 days, and highly desirable properties were sold for 6% above the list price.
Despite these positive signs, there are a couple of geopolitical factors that might affect mortgage rates and housing prices significantly, depending on their outcomes. Some of these include the continuing conflict in Ukraine and the Middle East, and the 2024 elections.
However, one of the biggest factors is that interest rates are lower and many experts predict that come the 3rd quarter of 2024, the Federal Bank will lower again. This will breathe a huge breath of life into a market that is already showing strong signs of recovery.
Trends to Look Out For
For 2024, the following trends are expected to impact the national housing market as well as that of Phoenixville, PA:
- Housing stock will remain low
- Increased demand for luxury homes
- Homeowners investing in specific home features
- Preference for smaller single-family homes
- Bigger apartments will be in demand
- Increased demand for sustainable housing
- Preference for natural, native landscaping
Many homeowners are still holding onto their properties due to high mortgage rates. This means that the national housing stock may remain low. This is especially true for entry-level or starter homes. This scarcity may continue to drive housing prices up throughout the country.
In many ways, the luxury real estate market has boomed in the last few years and continues to thrive. This was primarily due to the pandemic driving people to want better homes, in more affordable areas. The fact many could now work from home made this feasible. Also, it was and still is the case that those able to buy a luxury home are likely to have the means to mitigate or avoid high-interest rates. They can either pay outright in cash or pay a large down payment so that they are shielded from the worst effects of high interest.
With work-from-home arrangements becoming the norm, demand for specific home features and amenities will continue to rise. These include features that support at-home fitness like workout rooms, and features that decrease maintenance and energy consumption like AI-driven sustainability tech. Special home features, such as accessibility features and gardens for the aging Baby Boomer population will also be in demand.
Many homebuyers are downsizing due to several factors, including lifestyle changes, high mortgage rates, and fewer bedrooms. The current trend favors homes that have plenty of flexibility to blend indoor and outdoor spaces seamlessly, such as Ranch Houses.
Smaller single-family homes have led to the popularity of larger apartment sizes which have grown from 870sq.ft. pre-pandemic to around 1,000sq.ft. Renters are showing more preference for apartments with more space so they can work from home more comfortably.
Buyers are increasingly interested in homes that provide increased monthly savings on energy consumption and have lower carbon emissions. Materials with a lower carbon footprint and are sustainably sourced are becoming more popular and are now a factor that can sway home buyers.
Currently, there is a strong movement to preserve ecosystems and conserve land as well as native flora and fauna.
Is It a Good Year to Buy Phoenixville Real Estate?
The general outlook for the housing market in Phoenixville, Pennsylvania in 2024 is good. There has been steady year-on-year growth in home prices and housing stock compared to 2023. But before you start looking for homes for sale in Phoenixville, PA, here are a couple of pointers and considerations to keep in mind.
- Should you wait for interest rates to lower even further?
- If and when interest rates do drop, there will likely be much stiffer competition for houses. Buyers could get into bidding wars with each other and pay considerably higher than the asking price. This makes the process much more stressful and there is an increased chance that buyers will not necessarily be able to land their first choice home.
- The sooner a buyer buys a home, the sooner they start accruing equity on their investment. Given that real estate is one of the soundest investments you can make, it’s a solid plan to own a home as soon as you can.
- Interest rates may not lower this year. Although many wish for it, it simply might not happen. This would leave buyers continually waiting or desperately buying as they feel the need to make a move. Of course, this would be further down the line by which time they would have missed out on gaining the equity they could have made.
- Work with an experienced real estate professional
This is a tricky one and it’s a delicate balancing act. It’s true that interest rates are slated by many to be lowered, possibly by the third quarter of 2024 and naturally a homebuyer will want to get a mortgage then. However:
While there are fewer homes in the market than would be ideal, more of them are becoming available than in previous years. As the market is beginning to recover, there may be a window in 2024 to buy at the right time, just when the market has passed its lowest low, and is poised to grow.
The real estate market is never completely predictable, even in the most stable of times. Given the fact that the market is just emerging from one of the most turbulent times in recent history, it’s highly recommended that you work with a real estate professional before you start looking for a home.
Real estate agents and Realtors can help you navigate the local real estate market of Phoenixville and give you the best guidance and advice. They’ll provide you with the in-depth knowledge you need whether your interest lies in finding the perfect home in the perfect neighborhood or securing the best properties for your investment.
A good real estate agent will put your interests first, even at the expense of their own, In cases where they know that a certain course of action is against your interests, they will inform you, even if it means they may lose out financially. In an industry where reputation is paramount, your success often leads to theirs.
They have a network of industry-related professionals that they can call upon on your behalf. This includes lawyers, lenders, stagers, and builders, professionals you will almost certainly need depending on your venture. This saves you time, will often save you money, and ensures you have peace of mind as you’ll be working with trusted people.
Navigate the Phoenixville Real Estate Market with the Experts
With more homes for sale expected to enter the market and mortgage rates easing, homebuyers interested in the borough can seize the opportunity to purchase a home this year. Homeowners looking to sell their homes can look forward to strong and possibly multiple offers and the probability that interest rates will come down even further.
To help you navigate the Phoenixville, Pennsylvania housing market, turn to our team of seasoned local agents at the DeZarate Real Estate Sales Group, headed by top Realtor Marie DeZarate. This is a team that can assist you with your real estate transactions from start to finish.
Our team offers concierge-level service, whether you’re a homebuyer or a homeowner selling your property in Phoenixville. With our years of experience, specialized market knowledge, and negotiation skills, we can help you find your dream home in Chester, Delaware, and Montgomery Counties in Pennsylvania.
Together, let’s make your real estate goals a reality. Contact us by calling 484.881.2397 or by sending an email here.