According to the CE Shop team, while Pennsylvania has been hit hard by the economic downturn of the pandemic over the course of 2020, the real estate market in the state continues to heat up and shows no signs of slowing down soon. This year’s record-low mortgage rates, along with lockdowns and work-from-home orders, drove home buyer demand to create a frenzy of sales throughout the entire state with rural towns feeling most of the heat. So, what will 2021 bring to Keystone State real estate agents?
2021 Pennsylvania Real Estate Outlook: Hot
Pennsylvania’s home prices have steadily increased year-over-year, with homes throughout the state seeing close to $20,000 in increased value. The average cost, $211,287, is lower than the country’s average home price and much lower when compared to markets surrounding Pennsylvania. Rental prices throughout the state are consistent with home prices, staying significantly below the national average: Pennsylvania rent costs -18.2% less than the average rent across the nation.
The number of homes with negative equity is 2.9%, garnering a moderate ranking, though this figure is lower than most in the nation. This figure is a good indicator of our rebound from the pandemic as job opportunities return, and the economy begins to open up. Pennsylvania was ranked as a healthy real estate market by SmartAsset, boasting high home sale prices and decreasing days on market. In other words, homes are still in high demand, which generates competition for buyers looking to enter the market.
Delinquency rates in the state remain low at 1.1% thanks to the return of jobs needed throughout the state. Homeowners that suffered job changes or even job loss because of the pandemic have been able to keep up with mortgage payments thanks to COVID-19 relief and forbearance on payments through 2020. There is still uncertainty heading into 2021, as relief and aid from the state and federal government will likely be required.
2020 Pennsylvania Real Estate Market Data
Zillow Home Value Index $211,287
1-Year Change on Home Values +7.7%
1-Year Forecast +10.4%
1-Year Change on Rent Prices +3.8%
Homes With Negative Equity 2.9%
Delinquent on Mortgages 1.1%
Buyer’s or Seller’s Market Seller’s
Market Insights for Pennsylvania
While the state’s unemployment rating (6.6%) is just under the nation’s average (6.7%), there have been improvements over the course of the pandemic. Pennsylvania has been recovering as the economy slowly opens again. Thanks to large employers like Aramark, Comcast, and Keystone Foods, job opportunities will gradually come back as optimism around the pandemic rises.
In the wake of the pandemic, Pennsylvania has proven its resiliency once again. With residents moving around, looking for more space in a home, and transplants from surrounding cities looking for more affordable housing, the state’s real estate market is expected to continue to rise throughout 2021.
Urban markets like Philadelphia have seen a surge of home buyers transitioning from more competitive markets like New York City - and for good reason. Here’s how Pennsylvania ranks in comparison to the rest of the nation:
First in farmers markets in the country
First in mushroom production
Thirteenth in opportunity
Twenty-first in health care
Residents are drawn to the state because of the boundless outdoor space, affordable housing, close communities, and steady work available here. Pennsylvania’s top industries are centered around coal, steel, and railroads, as well as mushroom production which reaches an annual harvest of more than 425 million pounds.
Real estate agents throughout the state should be prepared for a busy 2021 heading into the spring and summer. Regular seasonal trends are expected to return with high demand. Expect mortgage rates to gradually increase, but don’t worry: Demand and the need for space will continue to drive home sales and home sale prices up.