An aerial view of the Philadelphia suburbs. (Credit: RE/MAX Regency Realty)
In February, it would have taken only two months to sell all of the housing inventory in the Philadelphia suburbs. It’s a seller’s market.
This imbalance in the real estate market occurs when buyer demand exceeds the supply of homes. In the past few years, the Philadelphia housing market has experienced historically low inventory, even before the pandemic: there were more new listings in both 2021 and 2022 than in 2019.
In 2024, the suburbs saw an increase in listings—from 3% in Bucks County to 9% in Chester County—yet inventory is still considered low, favoring sellers and leading to intense bidding wars and waived inspections.
Amanda Helwig is a second-generation real estate broker based in Flourtown. She has been in the business since 2003, and mostly services Montgomery, Bucks, and Philadelphia counties.
Helwig said that some hot municipalities like Ambler and Conshohocken have little to no inventory. Moreover, inventory depends on the price range. The million-dollar market has softened with less competition compared to the under $500,000 market, according to Helwig.
Though the bidding wars Helwig’s observed for her buyers have calmed down from around 20 offers a few years ago to now five or six competitors, she said buyers still have to be very aggressive.
“It’s very competitive bidding on homes,” said Helwig. “I think especially first-time home buyers just get burned out.”
Coupled with low inventory, the Philadelphia housing market has seen rising home prices. In the Philadelphia suburbs, home value indexes have risen 5% in Bucks County to $481,321, 4.8% in Chester County to $533,699, and 4% in Montgomery County to $459,662.
These factors, in addition to interest rates for a 30-year fixed-rate mortgage currently hovering around 6.67%, have led to more suburban residents choosing to rent over buy.
In fact, using 2023 Census data, a new report from Point2Homes found that King of Prussia is now one of 15 suburbs nationwide to shift to a renter majority in just five years.
King of Prussia joined the existing rolodex of renter-dominated PA suburbs, including West Chester (65.1%), Coatesville (64.2%), Norristown (59.2%), Chester (59.1%), and Darby (50.2%).
The rise in Philadelphia suburban renters aligns with the national trend of homeownership becoming an increasingly unattainable feat. Helwig noted that the median age of first-time home buyers used to be in the late twenties, but the National Association of Realtors has found that, as of 2024, it is 38.
“If people were able to buy a first-time home in their twenties, versus almost the age of 40, that’s a lot of time for appreciation in a home for them to build wealth,” said Helwig. “We have a generation now that is missing out on that opportunity.”
Realtor Earl Endrich from Team Endrich Real Estate shared that he believes the market will balance with an inflow of inventory once interest rates begin to drop, likely once they go below 6%. Endrich said that this is because many existing homeowners have mortgages at a 2-3% fixed interest rate, and though they may want to move, they are put off because of the current high interest rates.
“It’s very difficult to stomach a 3% or 4% difference in interest rate between your current mortgage and what you would be purchasing,” Endrich said.
In that case, once rates come down, inventory would increase as homeowners reenter the market, using the equity from their previous home to purchase something that better suits their current needs
“We may see enough inventory come on where it equals out to the amount of demand,” said Endrich. “We’ll still be leaning more towards that seller's market, or maybe hopefully a normal market, but that can all change, of course.”
