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Philadelphia Housing Quarterly Market Update: Q1 2014

Philadelphia’s Housing Continues to Exhibit Bipolar Symptoms in 2014 Q1  by Kevin Gillen

Prices and sales continue to rise in affluent neighborhoods, but decrease or remain flat in others.

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April 14, 2014: Although it has been two years since Philadelphia house prices hit their post-recession bottom, its recovery has not only proceeded in fits and starts, but has also been unevenly—and inequitably—spread across the City’s neighborhoods. The latest stats continue to confirm this trend, indicating improved market conditions in either relatively high-income or gentrifying areas, but continued stagnation or even decline in the rest of the City. The average house value in Philadelphia declined by 4% in Q1, according to the latest data from the City’s Recorder of Deeds. However, this citywide average blends price increases in some neighborhoods with price decreases in others.

 

House prices generally increased in Philadelphia’s more affluent or revitalizing neighborhoods, but fell in most remaining parts of the City, with the poorest neighborhoods experiencing the largest declines. From smallest to largest, the average change in house prices by neighborhood in Q1 were: West Philadelphia (-17.5%), North Philadelphia (-12.9%), Kensington/Frankford (-6.1%), Upper Northeast Philadelphia (-5.9%), Lower Northeast Philadelphia (-5.7%), Northwest Philadelphia (-2.2%), South Philadelphia (+2.5%), University City (+2.7%) and Center City/Fairmount (+6.8%).

 

The median house price in Philadelphia fell to $110,000 in Q1, a 13% decrease from $127,000 in the previous quarter.

 

Home sales volume continued to increase this past quarter on a seasonally-adjusted basis, although activity remains relatively skewed towards the higher-priced vicinities of the City. There were 3,148 arms-length transactions in Q1, up from 2,849 a year ago and up from 2,503 in their post-recession low three years ago. While sales activity is trending positively, overall volume still remains below its historic average of approximately 3,800 sales per quarter. Notably, however, sales of million-dollar homes continue to run well above their historic average, providing further evidence that Philadelphia’s housing recovery remains skewed towards the upper segment of the market.

 

Although price changes remain varied across neighborhoods, this quarter’s citywide average decline has returned Philadelphia’s house price index to near its post-recession low of two years ago. Currently, the index has a value of 375.4, which is only slightly above its value of 372.0 in 2012 Q2.

 

Inventories of homes listed for sale also continued their decline in Q1. Currently, there are 6,798 homes listed for sale in the city, which is very close to the pre-bubble historic average of approximately 6,000, and down significantly from its peak of over 12,000 back in 2006. This decline in surplus inventory combined with the upward trend in sales activity should provide some optimism that supply and demand are continuing to move towards being back in balance with each other.

 

To what extent this quarter’s mixed numbers may be attributable to the adverse effects of an exceptionally cold polar vortex-induced winter is unclear. However, while some neighborhoods in Philadelphia appear to be in full resurgence, the lack of citywide price appreciation stands in marked contrast to those of most other U.S. cities.

 

According to Case-Shiller’s house price indices for the twenty largest U.S. cities, price recovery remains strong and steady in most other cities, compared to Philadelphia’s variance and unevenness. That Philadelphia’s recovery will continue in this way for the near future is supported by the most recent house price forecast from Zillow, which is projecting Philadelphia’s house prices to rise only 1.3% over the course of the next twelve months, while forecasting a 3% increase for the U.S. as a whole.

 

 

 

 

 

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Philadelphia Housing Market Quarterly Update Q3 2013

 

Philadelphia Housing Holds Steady in Q3 by Kevin Gillen
Prices, sales remain flat, although inventories continue to decline.

October 24, 2013: Philadelphia’s housing market continued its stop-an-go pattern of recovery this past summer, with both house prices and sales remaining essentially unchanged from the previous quarter, even after rising sharply this past spring. 

The average house value in Philadelphia declined by 0.7 percent in Q3, according to the latest data from the City’s Recorder of Deeds. This number is considered small enough so as to be statistically indistinguishable from zero. 

House prices were generally flat citywide, with a few exceptions. From smallest to largest, the average change in house prices by neighborhood in Q3 were: North Philadelphia (-1.2%), Upper Northeast Philadelphia (-1.1%), Lower Northeast Philadelphia (0.0%), Northwest Philadelphia (0.0%), Center City/Fairmount (+0.2%), Kensington/Frankford (+0.7%), University City (+3.7%), South Philadelphia (+4.0%), and West Philadelphia (+8.1%).

The median house price in Philadelphia increased to $139,900 in Q2, a 6.0% increase over the median price of $132,000 in the previous quarter and a 7.6% increase over the median price of $130,000 one year ago. However, these increases are disproportionately due to sales being skewed towards the upper end of the market, as many relatively lower-income households remain on the sidelines of the current recovery due to sluggish economic conditions and tight credit conditions. Evidence of this is given by the continuing divergence between Philadelphia’s median house price (which is affected by this upward bias towards higher-priced homes) and the indexed house price (which is computed via a regression that eliminates this upward bias). This spread currently stands at nearly $50,000, and has been growing ever since the housing bust effectively eliminated many low income buyers from the market, In addition, home sales in the million dollar-plus price bracket remain well above their historic levels, despite overall home sales still remaining below their average historic levels.  

 


Currently, Philadelphia’s housing stock has recovered 9% of its lost value since the bursting of the housing bubble in 2007. Because house values here fell an average of 21% during the bust, this implies that they need to appreciate by another 12% in order to fully recover the value lost during the recession. 

Home sales activity was also flat this quarter. There were 3,614 arms-length transactions in Q3, which was exxentially unchanged from the previous quarter, but is up 9/2% from 3,311 sales one year ago.

Philadelphia’s recovery still stands in stark contrast to those of other cities. Although Philadelphia’s housing neither appreciated nor depreciated as much as most other large U.S. cities during the housing boom and its subsequent bust, it is still lagging in its recovery. House prices in cities such as Atlanta, San Francisco, Portland, and Minneapolis have recovered approximately half of their lost value, while Philadelphia has recovered only a little more than a third. In Dallas and Denver, house price increases have been sufficiently large that not only have these cities fully recovered their lost values, but house price levels there are currently above their pre-bust peaks. 

The following chart ranks large U.S. cities by their total peak-to-trough decline in house prices, with the blue areas of each bar indicating the percent that house prices have recovered their value and the red areas indicating the percent that remains before the total loss is completely recovered.:


While Philadelphia’s housing market does generally tend to lag national trends, the currently sluggish recovery may be a sign that the market remains uncertain about the future of various local public policies that are likely to affect the future of our housing market. These issues include: the next round of AVI assessments, the possible creation of a land bank, potential reductions in our high delinquency rate of property taxes, and the future of the Ten-Year Tax Abatement. 

  For more information about Philadelphia’s Housing Market and past market updates, CLICK HERE

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Home Security Checklist

Here are several tips to keep your house as secure as possible:

  • Keep the shrubbery around your house trimmed. If the bushes and hedges are overgrown and tall, it provides the criminals with a perfect hiding place. You could even consider replacing them with thorny bushes or plants that deter people from walking through them. Also trim back trees so no one can climb the limbs into second floor windows/doors.
  • Keep the exterior of your home well-lit. Burglars prefer to work in the dark so they cannot be easily seen. Installing motion light sensors helps to keep these unwanted visitors away and also help you to enter your house quicker at night rather than fumbling for your keys in the dark.
  •  Get to know your neighbors. People are more likely to look out for their friends. Neighborhood watch programs are excellent at deterring crime. If your neighborhood doesn’t have one, consider starting a program in your community.
  • Make it seem like there is someone home at all times by using light and sound. Automatic timers and motion detectors can be great tools for people who are on vacation or are otherwise going to be away from their home for an extended period of time.
  • Rather than hiding an emergency key under your doormat, leave one with a friend or neighbor so it will not be easy for a potential intruder to find.
  • When you are going on vacation, have someone come over to bring in the mail and newspapers so they do not pile up and alert burglars to your absence.
  • Make sure you have locks on all your doors and windows.
  • Invest in a home security system. A home alarm that goes off when someone enters your home uninvited is one of the best ways to scare away intruders.
  • Keep your garage closed whether you are at home or not. This way, it will not be as obvious to burglars whether or not there is a car inside.
  • Document and insure your valuables so that they can be tracked and returned more easily if they are stolen
  • Be diligent about your home security. Do not slack off when it comes to protecting your home and your family. Be consistent and thorough.
  • Use bars on low level or otherwise easily accessible windows

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Home Energy Efficiency Checklist

Listed below are several actions you can take to make your home more energy efficient. Save some money and save the planet!

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To Do Today

  • Turn down the temperature of your water heater to the warm setting (120°F). You’ll not only save energy, you’ll avoid scalding your hands.
  • Start using energy-saving settings on refrigerators, dishwashers, washing machines, and clothes dryers.
  • Survey your incandescent lights for opportunities to replace them with compact fluorescents (CFLs). These lamps can save three-quarters of the electricity used by incandescents. The best targets are 60-100W bulbs used several hours a day. New CFLs come in many sizes and styles to fit in most standard fixtures.
  • Check the age and condition of your major appliances, especially the refrigerator. You may want to replace it with a more energy-efficient model before it dies.
  • Clean or replace furnace, air-conditioner, and heat-pump filters.
  • If you have one of those silent guzzlers, a waterbed, make your bed today. The covers will insulate it, and save up to one-third of the energy it uses.

 

This Week

  • Visit the hardware store. Buy low-flow showerheads, faucet aerators, and compact fluorescent light bulbs, as needed. These can be purchased from any hardware or home improvement store. CFLs are now sold at some drug stores and grocery stores.
  • If your water heater is old enough that its insulation is fiberglass instead of foam, it clearly will benefit from a water heater blanket from the local hardware or home supplies store. (To tell the difference, check at the pilot light access (gas). For an electric water heater, the best access is probably at the thermostat, but be sure to turn off the power before checking.)
  • Rope caulk very leaky windows.
  • Assess your heating and cooling systems. Determine if replacements are justified, or whether you should retrofit them to make them work more efficiently to provide the same comfort (or better) for less energy.

 

 This Month

  • Collect your utility bills. Separate electricity and fuel bills. Target the biggest bill for energy conservation remedies.
  • Crawl into your attic or crawlspace and inspect for insulation. Is there any? How much?
  • Insulate hot water pipes and ducts wherever they run through unheated areas.
  • Seal up the largest air leaks in your house—the ones that whistle on windy days, or feel drafty. The worst culprits are usually not windows and doors, but utility cut-throughs for pipes (“plumbing penetrations”), gaps around chimneys and recessed lights in insulated ceilings, and unfinished spaces behind cupboards and closets. Better yet, hire an energy auditor with a blower door to point out where the worst cracks are. All the little, invisible cracks and holes may add up to as much as an open window or door, without you ever knowing it!
  • Set your thermostat back (forward) when you can accept cooler (warmer) conditions. This generally includes night time and whenever you leave your home for several hours. Many people find it easier to use an ENERGY STAR programmable thermostat that will automatically adjust the thermostat based on your time-of-day instructions.
  • Schedule an energy audit for more expert advice on your home as a whole, or learn how to conduct your own by visiting the Home Energy Saver Web site. A directory of available energy audit services by state is available at RESNET.

 

This Year

  • Insulate. If your walls aren’t insulated, have an insulation contractor apply blown-in insulation (cellulose or fiberglass) to the walls. Bring your attic insulation level up to snuff.
  • Replace aging, inefficient appliances. Even if the appliance has a few useful years left, replacing it with a top-efficiency model is generally a good investment.
  • Upgrade leaky windows. It may be time to replace them with energy-efficient models or to boost their efficiency with weather-stripping and storm windows.
  • Have your heating and cooling systems tuned up in the fall and spring, respectively. Duct sealing can also improve the energy efficiency and overall performance of your system (warm-air furnace and central air conditioners).

 

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A Headache for Queen Village Parents May Be Relieved

In  Queen Village, parents are having trouble finding decent and reliable child care for their infants and toddlers. These families have joined long waiting lists to deal with limited options when it comes to days, activities, food and education for their children. A headache for many residents, there is a shortage and demand for childcare.

At 420 Bainbridge Street, this 4,000 square foot location used to be the Life Management Medical Center. You will soon see Natalie Renn open her second location of The Giving Tree Infant and Toddler Center…if the license comes through. Her first location was specifically for daycare and preschool in the Logan Square area of Philadelphia.

logo-infants(Image Source: thegivingtreedaycare.com)

Their focus and mission is to provide exceptional child care for infants and toddlers under trained and professional supervision. Natalie trains her employees to focus on early childhood development, communication techniques, sleeping strategies and eating patterns.

They will offer a variety of learning and physical activities including; baby and me yoga classes, an inside mini gym, a backyard for play, trips to local playgrounds and parks. Just a few weeks away, they’re expecting to open their doors October but were talking about a license from the Department of Public Welfare. Hoping we do see them open soon, we need more Natalie’s in Philadelphia!

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