Philadelphia house prices increase, even as sales remain low.
The most recent home sales figures indicate some indicators of stabilization in Philadelphia’s slumping housing market acording to the latest analysis by Wharton economist Kevin Gillen.Dr.
Kevin Gillen is an economist at the Real Estate Department of the Wharton School and Fellow of the University of Pennsylvania. He analyzes the Philadelphia real estate market using the city’s real estate database through Enconsult, an economics consulting firm based in Philadelphia. The results are published in a research paper called Philadelphia House Price Indices(PDF) each quarter as a public service to the Philadelphia real estate community.
After seven consecutive quarters of declining house prices, the typical Philadelphia home actually rose in value by an average of 6.8% on a quality- and seasonally- adjusted basis this past spring. This is a reversal from nearly two years of price declines. And, when added to previous price declines,Philadelphia house values are down cumulatively by 12% from the local market’s peak of two years ago.
Price changes across the city’s neighborhoods were almost all positive. From lowest to highest, the price changes by neighborhood are:
- Center City/Fairmount (+0.9%)
- Lower Northeast Philadelphia (+3.1%)
- Upper Northeast Philadelphia (+3.8%)
- Northwest Philadelphia (+5.8%)
- South Philadelphia (6.9%)
- North Philadelphia(+13.1%)
- Kensington/Frankford (+14.0%)
- University City (+17.1%)
- West Philadelphia was the only neighborhood to experience a price decline (-1.1%)
With this price increase, Philadelphia has diverged sharply from the average house price decline for large U.S. cities. House prices have fallen by an average of 33% in the ten largest U.S. cities since the bursting ofthe housing bubble, compared to only 12% in Philadelphia. With the most recent price declines to date, Philadelphia’s housing is now actually considered to be under-valued. The typical Philadelphia home is under-valued by 3.2%. This is down from its peak of two years ago, when it was estimated to be over-valued by 16%, and the first time it has been considered under-valued since 2003.