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Tax Credit Deadline Revved Up Home Sales in Philadelphia



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By : John Cutts    99 or more times read
The April 30 tax credit deadline pushed dillydallying homebuyers in the Philadelphia metro area to sign contracts and close sales in the first quarter, helping drive up total home sales by more than 10 percent year-over-year.

Just like in many other cities, the tax credit expiration was an added benefit for homebuying in the first quarter, in addition to the benefits of lower mortgage rates, lower home prices and more choices of existing and newly-built properties.

Pending home sales contracts in Greater Philadelphia also soared in the first quarter to a total of 15,003 units, a spike of almost 23 percent from the 12,216 contracts signed one year earlier. The county of Philadelphia posted the highest sales, with a total of 2,465 units sold, marking an increase of 14.4 percent.

The other best performing markets were Montgomery County, with a sales total of 1,328 and an increase rate of 14 percent; Bucks County, with 963 homes sold and a spike of 16 percent; and Delaware County, with 868 units sold and a jump of 5 percent.

It was Chester County which posted the highest increase in price – a median price jump of almost 9 percent to $288,000, far above the median price for all homes sold in the first quarter in the Philadelphia area, which was $200,000. One year earlier, the median price was $199,000, indicating a year-over-year increase by only $1,000 or 0.5 percent.

The rush to beat the tax credit deadline also reduced the number of days homes stayed on listings from 95 days to 93 days and reduced the average stock of homes for sale in the region by two percent from 76,648 in the first quarter last year to 74,964 in the first quarter this year. The inventory two years earlier was even higher at 83,513.

Among frenzied buyers in the first quarter were people engaged in Philadelphia foreclosure investing. A large number of them no longer qualified for the tax credits, but they were beating further price increases and taking advantage of low mortgage rates and good inventory.

The number of houses repossessed by lenders through foreclosure auctions in Pennsylvania in the first quarter was 3,536, accounting for 24.04 percent of all postings during the quarter. Lis pendens notices totaled to 5,406 and foreclosure sale notices totaled to 5,767, putting the total of pre foreclosures at 11,173.

Finding foreclosed house listings and looking for an affordable home to buy in Pennsylvania is still fairly easy to do as filings continued to increase in the state in the first quarter. The 14,709 homes put into the foreclosure process during the quarter marked a 25-percent jump from a year earlier and a seven-percent jump from the prior quarter.

Compared to other states, Pennsylvania has generally held up well during the housing crisis, as it has been occupying the lower portions of foreclosure charts since the downturn started.

Additionally, federal, state and local foreclosure prevention programs, including the tax credit incentive scheme, had relatively good results in the state due to efforts by nonprofits and public-private alliances.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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