For those of us who work or go to school within the city of Philadelphia, cost efficiency in our daily lives is always something that lingers on our minds almost constantly. With the cost of housing in our fair city on the rise, we now have something new to heap upon the plate of ever-growing financial worry. But could this rise a sign of better things to come for Philly? Or is it a harbinger of hard times ahead?
Recently, the prices for housing within the city have been growing substantially, especially in the past two years. According to the real estate website Zillow, the housing market in Philadelphia during January of 2016 did not seem to be anything special, coming in at $129,100 which is 30% lower than the national home sale price average of that year. This becomes all the more noticeable when compared side-by-side to its strong growth in October of 2017, when the prices rose up to $140,200. That is a growth of almost $20,000 dollars in the span of less than two years! Maria Quattrone, a Temple graduate and now CEO of Re/Max@Home, stated that “Yes. This growth has happened in the last 24 months.” This can be shown in the following chart below:
Quattrone also mentioned that those who come to her are mostly investors who are buying in multiple areas around the city, but are mostly seeking to buy in Center City and the immediate area. On Trulia, a website for comparing the prices of different areas in cities all across the United States, there is a list of each individual neighborhood of the city and the average sales price for most of them. On this site, Center City is broken up into two sections: Center City West and Center City East. Both of these parts are in the top twelve of the average sales price in the entire city, with Center City West selling on average for $500,247 and Center City East selling on average for $439,290. With this being some of the most expensive real estate, these investors are coming into the area. The following map has the average sales prices for various spots around the city, should you want to investigate yourself and see just how expensive an area of the city you may want to consider living in truly is.
This growth can be seen as a positive one, as those investing in our city can create new jobs for those living within, making the rising cost of living in the city more bearable. This can be seen on the site businessinsider.com when it compiled a list of the top 10 cities where the cost of living has risen and in this article, Philadelphia was ranked fifth. They said that “Cost of living increases can hurt your budget, but they can be indicative of positive economic trends. According to a report by CBRE, the commercial real estate services firm, for the first time in at least 25 years, jobs in Philadelphia are growing faster than in New York City. Several sectors are contributing to job growth, but the stand-outs are the educational and health services sectors, which added more than 27,000 jobs in the last year.” This further enhances how much possibility of good that can come from the prospect of heightening house prices.
While the possibility of higher home prices may be good for some, for renters it may mean a price hike in their monthly payments. In particular, those who may not have the means of making ends meet easily, such as those who do not come from a dual income household. Eddie Malone is the sole breadwinner of his household, supporting not only himself but his fiancé. They live in the Northeast of Philadelphia near the Bensalem border, having moved there almost three years prior with their former place of residence being Mt. Airy. Having lived in various parts of the city and changing residence so recently, who could have a better handle on the consumer’s perspective? I asked how he’d been affected by the rising cost of living, he said that he has not had any issues yet since his current rental has a private landlord. When asked if he and his fiancé had ever had trouble in the past with the price of living in the city, he said “Quite often. The rent in my neighborhood isn’t bad but in other parts of the city it’s just not worth it.” He then went on to compare his current residence to that of his previous rental in Mt. Airy where the rent was “900 a month and we didn’t have heat for almost 2 months of the major part of winter”. So while this growth is good for some, it does not mean it will be good for all. With some parts of the city just not being worth it to try live in, lower class citizens may find it hard to stay inside the city. Even Malone said that he’d often thought about moving out of the city. Hopefully, the job growth will be able to reach more fields so that everyone can enjoy living in the City of Brotherly Love, no matter the social class.
Photo Credit: Brian Maiorana
Map data source: trulia.com
Graph data source: zillow.com