let’s talk: PHILADELPHIA REAL ESTATE MARKET
As you all know by now, we are leaving NYC and making the move to PHILADELPHIA. This is one of those moves where I CANNOT WAIT TO GET TO PHILADELPHIA but I am also simultaneously dreading leaving NYC. It is such a bittersweet feeling. We spent this past Saturday looking at SEVERAL apartments (seriously, we saw 20+ units that day) and luckily we found one we really liked! When we officially make the move down there, I plan to use my real estate license, and continue to invest! So, I thought, now more than ever, would be a GREAT time to brush up on how the Philadelphia Real Estate Market is doing.
SO as we do, let’s talk Real Estate, let’s talk THE PHILADELPHIA REAL ESTATE MARKET…
SHOW ME THE STATS
Philadelphia Housing Market includes 4 million people
That number is on the up and up, and steadily increasing every year. PK & I will make it 4,000,002!
…just kidding lol Moving on…
Median Home Value: $157,500 (per Zillow)
While that is up 4% from last year, experts predict that it may not rise any more in 2020.
Median Price of Current Philadelphia Listings ON THE MARKET is $229,900 whereas the Median Price of Philadephia Homes That Have Been SOLD is $175,900 (Zillow) – $194,250 (Trulia)
This may or may not demonstrate that we are all still optimistic for the continued rise in market value. As an investor I am like… come on Philly – keep moving on up!
Median Rent: $1,300 (Trulia) – $1,500 (Zillow)
This has remained steady over the past year.
Average Days on Market (Redfin)
On average, a listing sells in ~37 days and receives ~1 offer. Redfin is rating this market as “somewhat competitive”.
WHAT DOES ALL OF THIS MEAN?
Basically, the Philadelphia real estate market has seen an increase in value over the past few years and, while that may remain stagnant for the immediate 12 months, experts predict we can continue to see an increase in market value through 2021. The group who put together this analysis has an accuracy rate of 74% on past forecasts.
SO SHOULD I INVEST IN REAL ESTATE IN PHILADELPHIA?
First of all, that is 100% up to YOU. But here are some reasons others are doing it…
(1) The Philadelphia Real Estate Market is Historically Affordable
RE: The median listing price (mentioned above) on the CURRENT market inventory ~$229,900.
(2) Returns, Returns, Returns
Over the past year, on average, we saw property value appreciation of ~7% and an increase in purchase price of ~11%. Hello capital gains!
We also noted that rent remained pretty steady over the past year AND is still lower than many of the suburbs… which hopefully means the only way for these rates to move is to go up!…(Sorry renters! – I know, I am hurting myself too by saying this, as I will be a renter for the time being there as well! But as an investor, and someone who hopes to continue to invest, I want to see this number go up!)
(4) Large Market of Renters
There is a LARGE rental market in Philadelphia. Roughly 40% of its residents are renters.
(5) STRONG Short Term Rental Market
Philadelphia is SUPER Air BnB friendly! The city views it as a way to attract tourism. Air BnB owners down there are RAKING in the dough. I would LOVE to own and design a fun Air BnB one day! Adding it to my vision board now!
(6) COLLEGE Students
Philadelphia has 32 schools (universities & tech schools) within its “city limits”…
OKAY SO WE ARE SOLD. WE WANT TO INVEST, BUT WHICH NEIGHBORHOOD SHOULD WE CHOOSE?!
I cannot and would not advise you to invest in any SPECIFIC neighborhood BUT I can tell you what the numbers show and which neighborhood we chose to invest in! The most important thing when looking to buy any property is LOCATION. It is important to invest in areas where the expected appreciation is POSITIVE.
Trulia shared what they believed to be one of the more affordable neighborhood to invest in as North Central Philadelphia where the median sales price is $101,500.
We, personally, invested in the North West neighborhood of Brewerytown and I cannot even begin to tell you how much that neighborhood has developed… even in the past 12 months. SO MUCH CONSTRUCTION since we purchased our project there.
TO SUM IT ALL UP, ONLY TIME WILL TELL HOW THE PHILADELPHIA REAL ESTATE MARKET WILL PAN OUT OVER THE NEXT COUPLE OF YEARS BUT I AM SERIOUSLY HOPING THE EXPERTS WE CITED ABOVE ARE RIGHT ON THE MONEY!
WHAT DO YOU THINK?! DO YOU THINK THE PHILADELPHIA MARKET IS DONE?! OR, ARE YOU READY TO INVEST NOW?!
Feel free to comment on the blog post HERE and let us know what YOU think!
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Me – this is based on my own personal experience!