Philadelphia Real Estate Market is Showing Promising Future

1

CITY’S PRICES HAVE RECOVERED…BUT NOT SUBURBS!

House Price IndicesSource: Kevin C. Gillen

90.0

140.0

190.0

240.0

290.0

340.0

390.0

440.0

490.0

540.0

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Philadelphia Regional House Price Indices 1980-2016by Philadelphia Area Submarket and U.S.: 1980Q1=100

Philadelphia*

Phila. Suburbs*

*Empirically estimated by Kevin C. Gillen, PhDNote: The suburban index includes all counties in the regional index, except for Philadelphia county.**Courtesy Federal Housing Finance Agency (FHFA)

Look at

thatspread!

September 2016 | BIA Philadelphia

2

WE ARE DEFINITELY ATTRACTING MORE AFFLUENT BUYERS

Million Dollar+ Home Sales in PhiladelphiaSource: Kevin. C. Gillen

*Only arms-length transactions between private sector entities were included in these numbers. These numbers do not include condos.

0

5

10

15

20

25

30

35

40

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of Philadelphia Home Sales* per Quarter

with Price>=$1 Million: 1997-2016

Q1

Q2

Q3

Q4

Qtly. Average


3

HOME SALES IN GENERAL HAVE ALSO RECOVERED

All Home Sales in PhiladelphiaSource: City of Philadelphia, Department of Records

*Only arms-length transactions between private sector entities were included in these numbers. These numbers do not include condos.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Number of Philadelphia House Sales* per Quarter: 1980-2016

Q1

Q2

Q3

Q4

Qtly. Average


4

INVENTORIES HAVE DECLINED TO RECORD LOWS

Homes for Sale v. Absorption RateSource: TrEND MLS

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Philadelphia Houses Listed For Sale: Inventory v. Absorption Rate

# Houses Listed For Sale

% Absorbed

# H

om

es L

iste

d "

Fo

r S

ale

" %A

bso

rbed

= (#

Sale

s/#

Lis

ting

s)


5

HIGH DEMAND + LOW SUPPLY = UPWARD PRESSURE ON PRICES

Homes for Sale v. Absorption RateSource: TrEND MLS

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

2001

2001

2002

2002

2002

2003

2003

2003

2004

2004

2004

2005

2005

2005

2006

2006

2006

2007

2007

2007

2008

2008

2008

2009

2009

2009

2010

2010

2010

2011

2011

2011

2012

2012

2012

2013

2013

2013

2014

2014

2014

2015

2015

2015

2016

Months' Supply of Inventory in Philadelphia

Seller's Market

Balanced Market

Buyer's Market

Months' Supply of Inventory measures how many months it would take to completely burn off the existing inventory of homes currently listed for sale, given their current pace of sales. 5-7 months is considered a normal, balanced market. More than 7 months indicates a Buyer's market, and less than 5 months indicates a Seller's market.


6

PHILADELPHIA’S LOCATION VALUE HAS INCREASED…

Land $Values/SqFt in Philadelphia in 2015 $DollarsSource: Kevin. C. Gillen

1980 2015

…BUT IS OVERWHELMINGLY CONCENTRATED IN AND AROUND

CENTER CITY.


7

THE DESIRE TO BE IN THE CITY IS REAL…BUT NOT UNIFORM

Density of Land Sales (#Sales/SqMi) in PhiladelphiaSource: Kevin. C. Gillen

1980 2016

CURRENT REDEVELOPMENT OF VACANT LAND IS

CONCENTRATED IN THE AREAS AROUND CENTER CITY.


8

RESULT: NEW CONSTRUCTION SKEWED TOWARDS RENTALS

140,000

145,000

150,000

155,000

160,000

165,000

170,000

175,000

180,000

185,000

190,000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

***

Single-Family* Multifamily** Center City Pop.

*Structures with 1-4 dwelling units**Structures with >=5 dwelling units

# o

f U

nit

s

***Note: 2016 Numbers are YTD numbers through July 2016.

Building Permits Issued for Construction of Residential Units in Philadelphia: Single-Family v. Multifamily

Sources: U.S. CensusCenter City District

Po

pu

lati

on
