Philadelphia home values ended the year slightly down, the first year-on-year citywide price decline since 2002. House prices declined citywide by an average of 4.4% in the fourth quarter of 2007 after season and quality are taken into account according 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 Hallwatch, a watchdog group. The results are published in a research paper called Philadelphia House Price Indices each quarter as a public service to the Philadelphia real estate community.
Download the full report [pdf]
Read the Hallwatch article: Philadelphia Home Prices Down for the Year
- Although prices were still rising as recently as last spring, house values fell by total of 0.6% compared to a year ago.No single neighborhood was spared from declining prices.
- Only 4,725 homes changed hands under arms-length conditions in Q4; the lowest level of transactions since the spring of 2003.
- Nearly 11,000 homes are listed for sale in Philadelphia, which is nearly double the amount in 2004As prices have remained persistently high while supply continued to rise, buyers have become increasingly reluctant to commit to a purchase. Also making the market more difficult are the tighter mortgage lending conditions attributable to the sub-prime fallout.
- This gap between buyers’ willingness and sellers’ expectations is also revealed in the latest data. The median list price in Philadelphia is currently $180,000, while the median transaction price is only $110,500. That represents a difference of nearly $70,000 between what sellers want and what buyers are actually willing to pay.
These conditions will likely continue until the current level of inventory begins to decline and restore more balanced conditions between buyers and sellers.
On the optimistic side, this actually did happen this past quarter, when the total inventory of listed homes fell by about 1,500 units.
**Hallwatch.org is a private and independently maintained watchdog website that does a lot of in-depth, independent and investigative pieces on city politics, as well as real estate.