Five of the toughest places to buy a home in 2023 are in Pennsylvania: study

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When you think of competitive real estate markets, places like San Francisco, Los Angeles, and Manhattan come to mind. But these days, the picture looks a little different.

Redfin recently released a report on the most competitive real estate markets in the country as of February 2023 based on four factors:

• Number of competing offers
• Waived contingencies
• Sale-to-list ratio
• Number of days on the market

One look at the top 10 metro areas on this list, and you know things have taken a turn in the market. The top city is Los Alamos, New Mexico with a score of 96 out of a possible 100.

More relevant for residents of The Keystone State - 5 out of the 10 markets are in Pennsylvania.

Which Pennsylvania markets are the most competitive?

Number 2 on Redfin's list is Lancaster, with a score of 89. Following close behind in fourth and fifth place are Lebanon and Reading, which both scored 87 (numbers have been rounded up).

Harrisburg is in seventh place with a score of 85. York also has a score of 85, although it's in ninth place.

Why are these the state's most competitive markets?

Zillow's list of the highest home value increases in 2022 has Philadelphia in tenth place. One of the reasons for this is the NYC/Philadelphia pipeline, in which twice as many New Yorkers head to Philly than vice versa. They're drawn in by a (comparatively) affordable housing market and the prospect of a more livable city.

This phenomenon may also be affecting the markets around Philadelphia, which would explain some of the competitiveness.

However, another phenomenon is also in play - the availability of "inventory," aka houses for sale, for prospective buyers.

Redfin says: "If it feels like there aren’t enough homes on the market for the people who want to buy one, it’s because there aren’t. Even though elevated mortgage rates continue to dampen homebuying demand, low inventory means the homes that are for sale are going fast in some parts of the country."

Simply put, with mortgage rates still high, sellers are hesitating to put their homes on the market, meaning demand is higher than supply.

Phillyvoice reports inventory growth has been lower in the area than in many other parts of the country, which may mean there have been fewer homes built in South Pennsylvania than in other parts of the country as well.

What does it mean?

While the pandemic's white-hot real estate markets have slowed, it continues to be a seller's market. However, for those who are selling, be aware that it might take some time to find the ideal new home.