The numbers are officially in: Philly’s real estate market got off to a big start in 2017, with home prices rising an average of 5 percent.
That’s according to economist Kevin Gillen’s latest “Philadelphia Housing Report: Q1 2017,” which found that despite usual trends this time of year, home prices increased and sales were “both exceptionally and unusually strong.”
As usual, Gillen pulled data from the city’s recorder of deeds and Trend MLS for his report, and stuck to single-family home sales. Based on the first quarter of 2017, the citywide median house price actually dipped from $140,000 to $137,000. However, the average price jumped from $169,833 to $175,042.
This increase in housing values varied extremely depending where in Philly homebuyers are looking. Not surprisingly, homes rose 10.5 percent in the Kensington/Frankford, an area that real estate agents have previously dubbed as a neighborhood to watch and where a wealth of building permits have been pulled.
Kensington/Frankford, South Philly, West Philly, and lower Northeast Philly experienced the highest jumps in home prices this past quarter. Here’s how those numbers have changed in each neighborhood over the past year.
Gillen found that there were a lot more home sales this past quarter, as well: 4,375 homes sold, which is 460 more than this time last year.
So what’s in play here? Dwindling house inventory is an easy culprit, said Gillen.
A separate Trulia report found that housing inventory in Philly has dropped to 32 percent over the last five years. And as Curbed Philly previously pointed out, homes are selling at a rapid clip (these days it’s not uncommon to see a home under contract one day after listing).
At this pace, all of Philly’s housing inventory could theoretically sell in four months, according to Gillen. “Typically, 5 to 7 months is considered a ‘balanced’ market,” Gillen wrote. “The last time that current inventories were so low was during the bull market of 2004.”
Another factor is that homes on the higher price range are steadily increasing by price more than homes on the lower end. That means the average home price in Philly is growing faster than the median price.
- Philadelphia Housing Report: Q1 2017 [Kevin Gillen, Lindy Institute]