Looking back at predictions made by the Urban Land Institute and Drexel University’s’ Kevin Gillian, the real estate market forecasts were pretty accurate. Let’s review:
It was predicted that Philadelphia’s real estate market’s growth would outpace the suburbs. True! The City added close to 4,000 new residents since 2018 making the overall percentage increase 3.8% since 2010. Only two suburban areas grew faster in the same time period – Chester County at 4.6% and New Castle County, Delaware inching out Philadelphia at 3.9%.
As predicted, Greater Center City, the area between the two rivers from Girard Avenue to Tasker Avenue, led this surge growing by 22.4% from 2010 to 2019, well surpassing the citywide and metropolitan growth rates. Interestingly, Greater Philadelphia, if considered a separate city, would be the third largest in the Commonwealth after the rest of Philadelphia and Pittsburgh.
The forecasters also predicted correctly that renters would be on the rise. Most of the new Center City residents moved into apartment buildings. According to the Center City District, 2,277 new apartments popped up in 2019, a 19% increase over 2018. Rents fell off a bit, but overall there seems to be plenty of new tenants for the number of apartments available.
Where the forecasters fell short was predicting the status of the housing inventory. The hope was that inventory would increase to balance out buyers and sellers. It is still a seller’s market – too few available houses with too many motivated buyers. As inventory continued to tighten, the demand became greater driving up both median and average sale prices.
Predicting into 2020, economists expect Philadelphia’s low inventory to persist especially if millennials continue to transition from renters to buyers. Inventory will also be affected by more people moving into Philadelphia and current residents staying put because of increased housing prices.