Good news for future homebuyers: Philly’s home values are up, but rents are flattening out, according to new numbers out of real estate website Zillow.
In the Philadelphia metro region, the median home value is now $214,800, up 4.6 percent from December 2016.
Meanwhile, rental prices rose just 0.9 percent over the past year to $1,573—that’s including everything from 1- to 5-bedroom rental units.
But while all of these numbers may make it seem like buying a home in Philly will be out of reach in 2017, it’s actually quite the opposite. “Slower rental growth now and going forward may take some of the heat off those renters thinking of buying a home just to escape the volatility of steep annual rent hikes,” Zillow chief economist Dr. Svenja Gudell wrote in his report.
This is a win for homebuyers, too, who may have struggled the past year to find a home with such low housing stock available, he adds. In Philadelphia metro region, there are 12.1 percent less homes on the market than in December 2015. Renters who wait to transition to buying property may in turn take the pressure off the hot housing market and make it easier for others who are ready to bite the bullet and put down a mortgage.
The slowing rental market may also mean a reduction in the rental construction boom that Philly’s been experiencing this past year—really since the after the recession. Developers may start considering more single-family or for-sale developments, leaning away from rental and multi-family projects, helping “ease supply constraints,” says Gudell.
Still, he adds, this is all just forecasting at the start of the new year, so it may take a few months before these potential trends to play out. We’ll be waiting.