Philadelphia Housing Inventory Surge Is Hitting An All-Time Low

Prices and sales are hitting new highs, while inventories drop to a record low during the second quarter 2017.

By Nagidmy Marquez July 27, 2017

The month of July has been a very interesting one for Philadelphia. For the first time ever, Philly’s housing inventory has hit an all-time low.  The numbers for the second quarter have been disclosed and things are not looking so vibrant. There are currently 3,883 houses on the market when the usual number goes beyond the 4,000 mark.

Apparently, the argument (or prediction) that Philly’s real estate market is accelerating at a record-breaking pace is true. “This is the first time that this number has fallen below 4,000 in the history of this data going back to 2001,” Kevin Gillen, senior research fellow at the Lindy Institute for Urban Innovation, writes in his latest second quarter report, “Combining such low supply with the current rapid pace of sales, it would take only 3.1 months to burn off the existing inventory of homes for sale.”

Related: New York’s Next Best Neighborhood For Millennials Is…Philly?

Below is a summary of the Q2 by the Numbers (According to Lindy Institute for Urban Innovation):

  1. $198K average house price
  2. $158K median house price
  3. 48 average days on market
  4. 9% annual house appreciation rate
  5. 3,883 homes for sale

If we look closely the above chart, it would take only 3.1 months to burn off the existing inventory of homes for sale. This will occur by combining the low supply with the current rapid pace of sales. For the Q2, the median house price in Philadelphia increased nearly 15% in just the last three months to hit a new high of $158,000. The reports also makes a clear point that by contrast, 5-7 months is considered to be typical of a “normal” or “balanced” market. Such severely restricted supply in an environment where demand continues to grow will almost certainly place significant upward pressure on local house prices.

Now, Philly is not the only city in the US with an inventory problem. The reality is that the country needs to add at least 4.6 million new apartments by 2030 to meet its rising demand. Philly alone will need to add 38,407 new apartments. The challenge arises when structurally speaking, the Philadelphia metro ranks sixth out of 50 metros in terms of hardest cities to add new apartments.

Related: Is Real Estate Crowdfunding The Fix That Urban Housing In America Really Needs?

Philadelphia is currently outperforming most other large US cities in house price growth. Prices here are currently appreciating at a rate of 9% per year, whereas the house price index for the top ten largest US cities (excluding Philadelphia) is currently growing at only 4.8% per year.

The recent house price increases are almost completely spread across the entire city. The average change in house prices by neighborhood in Q2 was:

(Image Credit: Curbed Philadelphia).
Nagidmy Marquez

ABOUT THE AUTHOR Nagidmy Marquez

ABOUT THE AUTHOR Nagidmy Marquez

Nagidmy is a global communications strategist with more than 13 years of experience in the creation, curation and implementation of strategic content and integrated communications practices. She has worked across different regions and cultures of the world including: United States, Latin America, Europe and the Middle East. She is a Mafalda and Don Quixote lover.

    Stefano Boeri, the architect mastermind behind the famous plant-covered skyscrapers, is now designing Forest Cities in Liuzhou, China. #ForestCity #China
    Auction is the second scheduled in a month for a One57 unit and it could set a NYC foreclosure record. #BillionairesRow #Foreclosures
    Once a couch-surfing website, Airbnb moves on to luxury properties, further disrupting hospitality industry. #Airbnb #Luxury
UN New York Hotel To Rebrand As Millennium Hilton New York One UN Plaza
The United Nations Plaza complex is an iconic landmark in Manhattan. It is a key property located across from the United Nations Headquarters that is…
Houses, Not Warehouses Act Might Be A Game Changer For NYC’s Housing Crisis
NYC is, indeed a city of contrasts. Just when you think that no parcel of land is safe from rampant development, including jails and houses…
Could Your Next Real Estate Agent Be A Robot?
Big data, robotics and artificial intelligence are starting to be used to sell residential real estate. As the technology evolves, it is fair to ask:…
Rich Or Poor—Nobody Can Afford NYC’s Median Rents, Study Says
Just because you are rich, doesn’t mean you can afford to live in New York City. No one can—except for the top one percent and…
Developers Jump Aboard The Trend To Revamp Transit Hubs And Remake Cities
Never has the often used marketing term, “close to transportation” been more important when attracting home buyers. These days it’s not just homes that are…
The Demand For The No-Frills Non-Luxury Rentals In Manhattan Is At All-Time High
What makes for a hot, sought after rental unit in a struggling Manhattan market? It is easier to say what doesn’t — it definitely isn’t…
Surviving The First Year—Three Simple Rules Every New Real Estate Agent Needs To Follow
Every year, thousands of people successfully obtain real estate salesperson’s license and join the already overcrowded real estate industry. Unfortunately, roughly 87 percent of these…
Four Countries To Retire In With $200K In Savings—And How Much Real Estate Costs There
Ever dreamed of retiring abroad? You know, affordable healthcare, better climate, more positive news—becoming an expat seems like an enticing option, especially one you no…