good opportunity for investors with philadelphia real market undergoing recovery
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© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
STATE OF THE PHILADELPHIA HOUSING MARKET: 2015 AND BEYOND
Kevin C. Gillen Ph.D., Chief Economist
September 30, 2015
Philadelphia Housing
Market
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
Recovery finally here?!
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House Price Indices 1980-2015: 1980Q1=100Philadelphia County v. Philadelphia MSA and U.S. Average
Phila. County*
Q2
7.5% increase in Q2 after only 7.3% rebound since bottom in 2012!
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
Outperforming both U.S. and Suburbs!
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Philadelphia Regional House Price Indices 1980-2015by Philadelphia Area Submarket and U.S.: 1980Q1=100
Philadelphia*
Phila. Suburbs*
U.S. Avg.**
*Empirically estimated by Kevin C. Gillen, PhD
Q2
Note: The suburban index includes all counties in the regional index, except for Philadelphia county.**Courtesy Federal Housing Finance Agency (FHFA)
Beat both our suburbs and U.S. average!
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
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Number of Philadelphia House Sales* per Quarter: 1980-2015
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Qtly. Average
Strongest quarter for home sales since bubble!
Sales also have rebounded:
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
Million dollar-plus home sales remain strong:
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Number of Philadelphia Home Sales* per Quarter with Price>=$1 Million: 1997-2015
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Qtly. Average
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
Recovery skewed towards higher-priced homes:
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%Market Share of Philadelphia Home Sales by Price Category: 2000-2015
<=$90k $90k-$250k >$250k
$90,000-$250,000
>$250,000
<=$90,000
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
Sales skewed towards higher-priced homes:
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
Rents up significantly, even as house prices struggle:
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Philadelphia Housing: Avg. Rent v. Avg. $Price
Rent Index
Price Index
Rents up 22%House Prices up only 8%
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
Supply remains constrained
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Philadelphia Houses Listed For Sale: Inventory v. Absorption Rate
# Houses Listed For Sale
% Absorbed
# H
om
es
Lis
ted
"F
or
Sa
le" %
Ab
so
rbe
d =
(#S
ale
s/#
Lis
ting
s)
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
New construction has rebounded!
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***
Building Permits Issued for Construction of Residential Units: Single-Family v. Multifamily
Single-Family*
Multifamily**
*Structures with 1-4 dwelling units**Structures with >=5 dwelling units
# o
f U
nit
s
***Note: 2015 Numbers are extrapolated from YTD numbers.
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
Homes are moving at a faster pace:
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Average Days-on-Market* for Philadelphia Homes
*Days-on-Market (DOM) is the average number of days it takes for a listed house to sell.
# o
f D
ays
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
Markets more bullish on housing:
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Philadelphia Stock Exchange Housing Sector Index: 2002-2015
The 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 index underwent a significant rebalancing in January of 2006.
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
National observers remain bullish as well
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Philadelphia House Price Index: Actual v. Forecast
Phila. County HPI
Forecast HPI
Zillow.com is currently forecasting Philadelphia house prices to rise an average of 2.3% overthe next year, which is unchanged from its previous forecast from one quarter ago, butremains an upgrade of its 2014 Q4 forecast of 0.5%.Source: http://www.zillow.com/philadelphia-pa/home-values/
© 2015 Meyers Research LLC | Kgillen@Meyersllc.com
Is it happening?
So far, new home sales in 2015 have been running 24% higher than the previous year, and are on track for their best year since the recession!
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