Regional Home Prices Outstripping Income Capacity but Change Is Coming

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A suburban street of homes.
Image via NBC 10.

Right now, houses in the U.S. are overpriced and out of range for the average home buyer, according to a report from NBC 10, but that may change.

The average price for a new home sold in April was more than $450,000, 20% higher than last year. 

In our area, the average income may no longer be enough to support the average overpriced home, researchers say.

“Yes it’s getting unaffordable,” says real estate economist Ken H. Johnson of Florida Atlantic University.  

According to Johnson’s research, the Greater Philadelphia housing market is overvalued by about 11% right now.  A few years ago this same market was undervalued by about 15% so there’s actually been a 26% change in pricing.

But real estate attorney Scott Reidenbach, with offices in Wayne, thinks we’re all due for a return to reality.

“I’m not worried about this market in this area crashing, but I think it’s going to cool off and settle back to earth in a good way for buyers.”

He’s already starting to see it.

“Buyers are taking back some control over the process because even three or four months ago, buyers were waiting on contingencies, overpaying, bidding wars. That’s slowing down.”

Read more about the housing market at NBC 10.

Real estate agent Jason Walter weighs in on whether home prices will drop later in 2022 in this April 18, 2022 video.

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