The ‘burbs around Philly are typically just a SEPTA or PATCO ride away, but when it comes to their respective housing markets, they’ve never been farther apart.
Average house values in the suburbs declined by 2.9 percent in the first quarter of 2017, while they increased by 5.0 percent in Philadelphia, according to a new report.
“The current spread between house price appreciation rates in Philadelphia [versus] its suburbs is at an all-time high,” said researcher Kevin Gillen, Ph.D. in his latest regional housing market analysis.
This widening gap between Philly and the suburbs has been an ongoing trend for the past couple of quarters. While Philly’s housing market has soared in the last year, breaking records left and right, the surrounding counties have suffered, with the median house price falling 14 percent, from $231,000 to $213,000.
Here’s how much housing prices appreciated in the first quarter, by county:
As the illustration notes, DelCo experienced the largest dip this past quarter, while homes in Montgomery County, which includes the Main Line, did appreciate, though barely.
Gillen notes that these numbers have a lot of implications for the region’s housing market. Among them, the inability for suburban homeowners to sell their homes for enough money could be contributing to the incredibly low housing stock the region is experiencing right now.
But Gillen notes that of the many factors that could be causing the widening gap between Philly and the ‘burbs—location, foreclosure rates, low inventory—it may not be something that can be fully explained:
[O]ne explanation that would be comprehensive, but is still unproven, is that this divergence cannot be explained by fundamental economic or demographic forces. If so, then suburban house prices and sales need to start making some active gains—and soon—or the only remaining option will be for the city’s housing market to become increasingly unaffordable…or to make a painful but necessary correction.
- Regional Housing Report Q1 2017 [Kevin Gillen, Lindy Institute]