© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
State of the Philadelphia Housing Market
KEVIN C. GILLEN, Ph.D.
gi...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Recovery is here, but uneven and sluggish
100.0
150.0
200.0
250....
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Our recovery lags most other cities:
90.0
140.0
190.0
240.0
290...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Philadelphia got off rather easy during the downturn:
-20%
-17%
-...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1980
198...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Million dollar-plus home sales remain strong:
051015202530199719981...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Recovery skewed towards higher-priced homes:
$0$20,000$40,000$60,00...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Sales skewed towards higher-priced homes:
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Note encroachment of higher-priced homes:
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Rent appreciation skewed as well:
-4% 1% 2% 3% 6% 6% 7% 7% 7% 8% 25...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Rents up significantly, even as house prices down:
80
85
90
95
...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Price-Rent Ratio at 10-year low
4.05.06.07.08.09.010.011.012.013.01...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Inventories beginning to uptick again?
0% 5% 10% 15% 20% 25% 30% 02...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Homes are moving at a faster pace:
30405060708090100Average Days-on...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Economy still sluggishly recovering:
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Unemployment slow to decline:
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Interest rates are heading up again:
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Homebuilders feeling more optimistic:
0102030405060708090 198519861...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
Markets more bullish on housing:
$0$50$100$150$200$250$300 20022002...
© 2013 Fels Institute at U. Penn.| gillenk@upenn.edu
What to Expect Going Forward?
•The Good: The recovery continues, an...
of 20

National Realty Investment Advisors, LLC Supports FELS Institute report on Philadelphia Housing Market

Philadelphia Housing Market report 2014 from FELS Institute is yet another confirmation of Philadelphia’s real estate growth story. National Realty Investment Advisors, LLC along with Professor Kevin Gillen supports positive real estate findings that are contributing to the growth of Center City extended areas. Go through the report to find critical investment data related to rent appreciation, sales trend, interest rates, and market recovery.
Published on: Mar 3, 2016
Published in: Real Estate      
Source: www.slideshare.net


Transcripts - National Realty Investment Advisors, LLC Supports FELS Institute report on Philadelphia Housing Market

  • 1. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu State of the Philadelphia Housing Market KEVIN C. GILLEN, Ph.D. gillenk@upenn.edu Disclaimers and Acknowledgments: The Fels Institute of Government at the University of Pennsylvania provides this report free of charge to the public. The report is produced by Fels Senior Research Consultant Kevin Gillen, in association with the University of Pennsylvania Institute for Urban Research. The author thanks Azavea.com, the Philadelphia Office of Property Assessment, the Federal Housing Finance Agency, Case-Shiller MacroMarkets LLC, RealtyTrac, Zillow.com, Trulia.com and the NAHB for making their data publicly available. © 2013, Fels Institute of Government, All Rights Reserved. September 17, 2014
  • 2. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Recovery is here, but uneven and sluggish 100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 500.0 550.0 600.0 House Price Indices 1980-2014: 1980Q1=100 Philadelphia County v. Philadelphia MSA and U.S. Average Phila. County* Phila. MSA** U.S. Avg.** Q2 7% increase after 20% decline
  • 3. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Our recovery lags most other cities: 90.0 140.0 190.0 240.0 290.0 340.0 390.0 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 House Price Appreciation 1987-2014: Philadelphia v. 10-City Composite 10-City Composite* Philadelphia % Change 10-City Philadelphia 1998 to Peak: +173% +136% From Peak: -19% -13%
  • 4. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Philadelphia got off rather easy during the downturn: -20% -17% -7% -14% -22% -10% -8% -21% -21% -18% -21% -16% -26% -23% -24% -36% -16% -26% -18% -21% -19% 11% -3% -13% -6% 10% -14% -19% -9% -12% -16% -17% -23% -13% -18% -19% -11% -32% -23% -34% -35% -42% -70% -60% -50% -40% -30% -20% -10% 0% 10% 20% Housing's Road to Recovery: %Lost v. %Recovered %Remaining %Recovered Now that the housing market's recovery appears to have arrived, this chart shows how much house prices need to rise in each city in order to erase the cumulative losses from the bust. The total rebound (to date) in house prices is shown by the blue bars, while the remaining losses are shown by the red bars. For example, Philadelphia county's average house prices fell by a cumulative 20% from peak to trough. To date, they have rebounded by 7%, which implies they need to rise another 13% in order to return to their pre-bust peak levels. Source: Kevin C. Gillen, Ph.D. All other cities courtesy S&P/Case-Shiller.
  • 5. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu 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 Number of Philadelphia House Sales* per Quarter: 1980-2014 Q1 Q2 Q3 Q4 Qtly. Average 62% decline from peak, but are now trending up.
  • 6. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Million dollar-plus home sales remain strong: 051015202530199719981999200020012002200320042005200620072008200920102011201220132014Number of Philadelphia Home Sales* per Quarter with Price>=$1 Million: 1997-2014Q1Q2Q3Q4Qtly. Average
  • 7. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Recovery skewed towards higher-priced homes: $0$20,000$40,000$60,000$80,000$100,000$120,000$140,000 19801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014 Median Philadelphia House Price v. Indexed Philadelphia House Price1980-2014Median PriceIndexed Price* Q2
  • 8. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Sales skewed towards higher-priced homes:
  • 9. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Note encroachment of higher-priced homes:
  • 10. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Rent appreciation skewed as well: -4% 1% 2% 3% 6% 6% 7% 7% 7% 8% 25% 25% 28% 28% 30% 41% 46% 49% 60% 62% -10%0%10%20%30%40%50%60%70% CedarbrookOxford CircleLawncrestWissinomingMount AiryWest Oak LaneTaconyEast GermantownEast Oak LaneHolmesburg-TorresdalePoint BreezeEast PassyunkQueen Village-PennsportCenter City WestFairmount-Spring GardenFishtownBella VistaPoweltonCedar ParkUniversity CityTop 10 v. Bottom 10: Changes in Average House Rents by Philadelphia Neighborhood, 2010-2014
  • 11. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Rents up significantly, even as house prices down: 80 85 90 95 100 105 110 115 120 Philadelphia Rents v. House Prices: 2010-2014 Median Rent Median House Price Rents up 16% House Prices down -1.5%
  • 12. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Price-Rent Ratio at 10-year low 4.05.06.07.08.09.010.011.012.013.014.015.0Average House Price-to-Rent Ratios*: 1980-2014Philadelphia v. U.S. U.S. Philadelphia*Computed by taking the ratio of average house price to the average annual rent of a comparable housing unit. The P/R ratio is to real estate what the P/E ratio is to other assets. Contact gillenk@upenn.edu for further details.
  • 13. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Inventories beginning to uptick again? 0% 5% 10% 15% 20% 25% 30% 02,0004,0006,0008,00010,00012,00014,000Philadelphia Houses Listed For Sale: Inventory v. Absorption Rate# Houses Listed For Sale% Absorbed # Homes Listed "For Sale" %Absorbed = (#Sales/#Listings)
  • 14. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Homes are moving at a faster pace: 30405060708090100Average Days-on-Market* for Philadelphia Homes*Days-on-Market (DOM) is the average number of days it takes for a listed house to sell. # of Days
  • 15. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Economy still sluggishly recovering:
  • 16. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Unemployment slow to decline:
  • 17. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Interest rates are heading up again:
  • 18. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Homebuilders feeling more optimistic: 0102030405060708090 198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014 Index of Homebuilder Sentiment: 1985-2014(Seasonally Adjusted) NationalNortheastThe Index represents the current sentiment of U.S.homebuilders. The index is computed via a regular monthly survey of homebuilders. An index value above 50 indicates that more builder are optimistic than pessimistic, while an index value below 50 indicates that more builders are pessimistic than optimistic.
  • 19. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu Markets more bullish on housing: $0$50$100$150$200$250$300 20022002200320032003200320042004200420042005200520052005200620062006200620072007200720072008200820082008200920092009201020102010201020112011201120112012201220122012201320132013201320142014 Philadelphia Stock Exchange Housing Sector Index: 2002-2014The PHLX Housing Sector Index is a modified cap- weighted index composed of 20 companies whose primary lines of business are directly associated with the U.S. housing construction market. The index composition encompasses residential builders, suppliers of aggregate, lumber and other construction materials, manufactured housing and mortgage insurers. Note: the indexunderwent a significant rebalancing in January of 2006.
  • 20. © 2013 Fels Institute at U. Penn.| gillenk@upenn.edu What to Expect Going Forward? •The Good: The recovery continues, and is very strong in some (higher-income) markets. •The Bad: Remains very uneven, sluggish GDP and income growth, and slow declines in unemployment unemployment. And: rising interest rates while credit still remains relatively tight credit. •The Uncertain: When will true, widespread recovery take hold? And, what about local policy?

Related Documents