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A Mid-Pandemic Look at the Philadelphia Housing Index

The last time we featured the Philadelphia Housing Index (PHI) in a Present Value blog post, we were in simpler times—back in February and talking about the future trajectory of the Far Northeast. It is not news to point out the substantial slowdown in home sales on account of COVID-19’s disruption or the slower pace at which home sales are being recorded. But despite that slow down and these challenges, our analysis of single-family home transactions shows the PHI had performed well, on average, compared to 2019 until June (data for July are not complete enough to include in the analysis).

In April of this year, the PHI had in fact peaked, likely because transactions that took place in that month had been in the process possibly before much of the economy slowed down in reaction to social distancing measures. In the dashboard below, readers can toggle through January to June for a year over year view of PHI performance across the city overall as well as by neighborhood. May shows the first significant decrease in PHI in a few neighborhoods, notably Center City East, Hartranft, West Mount Airy, and some parts of the Far Northeast. By June the downward shift in the neighborhood PHI have become more distributed across the city, though neighborhoods in South Philadelphia and parts of West Philadelphia continue with positive PHI growth (note neighborhoods with “no value” in a given month have not recorded any transactions to analyze). We’ll continue updating this dashboard throughout the rest of the year to see how much of this is a trend rather than a temporary reaction to the height of the pandemic.

Another surprising dynamic of the market in the midst of the pandemic is the consistent slate of new multifamily projects being added to the development pipeline in the city. Certainly many of these have been in the works pre-March, but by our count there are more than 1,000 units recently proposed or under construction. That supports the notion that cities, and Philadelphia in particular, are going to come out of the pandemic not necessarily unscathed, but a part of the broader economy’s recovery strategy.

We are in the middle of unprecedented times in our economy and the real estate market, but also have more data than ever before (housing is one example but there are many others) that can help us understand and plan for recovery. What questions do you have about Philadelphia’s residential (related to COVID-19 recovery or not) that we might cover in a future Present Value post? Contact us at lavery@econsultsolutions.com and liu@econultsolutions.com.

 

Gina Lavery is Senior Vice President and Principal of Econsult Solutions, Inc. (ESI). Ms. Lavery has led a range of projects for ESI, primarily focused on urban planning, real estate, transportation, higher education, and public policy—particularly where these areas intersect with economic development. This work has included developing economic and fiscal impact studies to support major development projects, providing advisory services on incentive programs and public financing for private and public sectors clients across the US, and supplying market insights for clients making real estate decisions.

 

Jing Liu

Jing Liu is a senior analyst at Econsult Solutions, Inc. (ESI) where she specializes in spatial analysis, quantitative analysis, and data visualization. She has been involved in a number of transportation projects, real estate market analysis, and economic impact analysis. Jing is responsible for analyzing and updating ESI’s monthly Philadelphia Housing Index (PHI), which measures changes in the sales price of Philadelphia’s housing units through time, adjusting seasonality and housing traits to compare like-to-like, with differentiated trends by city district by using arms-length residential, single transaction sales from 2001.

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