As summarized in this article median home prices and the number of home sales in Philadelphia continued to drop in the first quarter of 2009. While this might sound like bad news I contend that it's really a secret weapon for those buyers currently shopping for a property in the area.
The story on the ground is that, in many neighborhoods, prices on individual homes are down much less than the 7.4% year over year drop in the median price suggests. The median is down largely because the mix of homes being sold has shifted from the higher to the lower end. This shift has occurred as first-time buyers have become the market's driving force due to the $8,000 tax credit, attractive financing options, and no need to sell their current home before buying (first-time-buyers don't have a current home by definition). Since first time buyers typically buy less expensive homes than others the median price is bound to go down as they make up a larger piece of the overall market.
Here's the kicker - even though actual values are often not as bad as the median makes it seem, the big drop in the median price is a great way for buyers to support a 'low-ball' offer. When you can use numbers like these to back up an offer it puts you in an excellent bargaining position and can make the difference between getting an average deal and a great deal on your home purchase.
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