The words "crazy" and "insane" are the words I hear the most when Realtors, buyers, and sellers describe the Main Line real estate market over the last year.

Is that accurate? Everyone has heard stories of bidding wars with 25 offers where the seller got 100K+ over asking price and the the buyers waived their all of their inspection and mortgage contingencies. But a closer look at the sales statistics may surprise you.

The average sales price in the first quarter of 2022 was almost exactly what it was in 2021 over the same period. The $765,000 average sale price was unchanged. Even with all of the multiple offers that drove up the final sales prices over asking prices, the average sales price of a house on the Main Line didn't move.

The median sales price actually DECREASED 12.7% to $576,000. What accounts for the difference between the average and median sales prices? Fewer super-luxury homes sold this year and more of the lower price range homes sold, which brought the median sales price down to $576,000 this year, compared to $660,000 in the first quarter of 2021.

Inventory, or the number of homes on the market at a given time, DECREASED 43% in the first quarter of this year, compared to the first quarter of 2021. Last April 1st there were 352 homes on the market, compared to just 200 this April 1st. Even though there were far fewer homes on the market this year, it didn't increased the average sales price.

Houses sold 31% more quickly this first quarter compared to the first quarter last year. The combined days on market decreased from 58 days to 40 days. Less inventory led to immediate buyer interest, which decreased the days on market.

There were 20% less homes sold the first quarter this year compared to the first quarter last year, 429 sales last year vs. 342 homes sold this first quarter. Less inventory led to less sales.

The total sales volume also decreased 20%, from 326 million last first quarter to 261.5 million this first quarter.

So what does all of this mean?

How was the first quarter on the Main Line? The common expectation is that multiple offers, bidding wars, and a lack of inventory have driven up sales prices on the Main Line. The sales statistics, which were obtained from Bright MLS and include Lower Merion, Radnor, Tredyffrin, and Easttown townships, show that the average sales price is flat and the median sales price decreased by 12.7% ($84,000) the first quarter compared to a year ago. So there were 20% less sales compared to last year but that hasn't led to a bump on sales price - yet! Interest rates have increased more in the last two months that at any point in the last 25 years - from 3.5 in February to around 5% today. How will the increase in rates affect the Main Line marketplace? It could possibly lead to buyers holding firm and not offering 10-20% over asking price for houses - something we've seen since last Winter. It could also mean fewer buyers in the market, which would slightly balance the market. We may see an 85% seller's market instead of the 100% seller's market we've seen for a year-plus. Sellers will still do well with their sales prices going forward, but buyers may see a little less competition which would be a positive sign for them.

Have questions about the market? Reach out to us anytime to have us make sense of our changing market.

John Flanagan
Real Estate Advisor
Keller Williams Realty