The city of Philadelphia is officially a sellers' real estate market, as a continued shortage of inventory has pushed up prices for properties listed for sale.
Economist Kevin Gillen, senior research fellow at Drexel University's Lindy Institute for Urban Innovation, said the second quarter of 2016, which ended June 30, saw median prices 13 percent higher than April-through-June 2015.
The increase pushed the city's median price for single-family homes to a record $145,000, he said - even as homes sell in an average of just three months, a pace that meets the industry standard for a sellers' market.
Gillen does not include condominiums, which fall into the multifamily category, in his calculations.
The data, from the Philadelphia Recorder of Deeds and Trend Multiple Listing Service, are just for city single-family homes - Gillen reports on suburban numbers later.
"It certainly has been a great market to be a seller," said Chris Somers, broker/owner of Re/Max Access in Northern Liberties.
After several years of a fits-and-starts residential real estate recovery, increased demand and tight supply have boosted prices citywide, he said.
The number of homes listed for sale stands at 5,500 units - the lowest since 2003 - Gillen said, down from 7,100 units at the same time last year.
Sales volume was 4,774 houses, up 14 percent from 4,198 in the 2015 second quarter, and the highest three-month number since 2007, Gillen said.
"On average, my listings in this area [Northeast Philadelphia] sold within 10 days" of coming on the market, said Carol McCann, an agent with Re/Max Millennium in the Fox Chase neighborhood.
There were multiple offers for the limited listings, McCann said.
"Unlike previous years, I found that buyers weren't as hesitant about purchasing in a sellers' market," McCann said, the result of "super-low interest rates" and the availability of city grant programs for first-time buyers.
The shortage of inventory also can be measured in the average time a house spends on the market from the day it is listed to the sales agreement, Gillen said.
Instead of the 80 days of just a year ago, average days on market have fallen to 53, he said, which is a sales pace not seen since 2006, right before the housing bubble burst.
Mickey Pascarella of Keller Williams Real Estate in Center City sees this as problem for the long term.
"To get the right home, buyers are forced to pay prices higher than seem logical," Pascarella said.
"As a result, building equity could prove difficult, so [today's buyers must] be ready to hold the home a bit longer when deciding when to sell," he said.
The absorption rate - the percent of listed homes that sell each month - climbed to 30 percent in the second quarter from 12 percent as recently as February.
It would take only three months to sell every home listed for sale in the city, down from five months a year ago, said Gillen, adding that, according to the industry standard, less than five months of inventory makes it a sellers' market.
Gillen isn't exactly sure why homeowners aren't rushing to list their houses, but Mark Wade, an agent with Berkshire Hathaway Home Services Fox & Roach Realtors, cites several factors.
Mostly, it is "because many buyers in town over the last few decades have been empty nesters who believe they have made their final move and don't need to downsize or adjust their living quarters to match their future needs," Wade said.
The "flip side of rising house prices is decreased housing affordability," Gillen said.
"Prices are now rising faster than household incomes, which implies that home buyers must now sacrifice a greater portion of their wealth to buy a home than they would otherwise, or else must defer the purchase of a home altogether," he said.
Moreover, Gillen said, the lack of supply is tightest at the lowest-priced segment of the market, adversely affecting first-time and low-income home buyers the most.
Wade and other real estate agents agree with Gillen's assessment.
Developers are building either rentals or for-sale construction "aimed toward a narrow market - the very high end - which doesn't satisfy most buyers needs," Wade said.