While 2018 may have concluded with a slight slowdown in the residential housing market, the PHI shows that predicted value of a single family home rose through the end of the year, reaching $122,998. (Remember that the PHI uses arms-length transactions of single-family homes, adjusts for housing traits and seasonality), and uses hedonic regression analysis to predict the value of a typical Philadelphia house.
The PHI’s most recent analysis shows a year-over-year increase of 7 percent when compared to end of year 2017. That being said, this time last year, the PHI had shown year-over-year growth around 12 percent — some of the highest growth rates we’ve seen since the Recession (back in 2004 and 2005, the year-over-year PHI growth rate was around 20 percent).
What does this mean for 2019? Nationally, new home construction starts peaked in January 2018 but since then slowed. Restrained development has meant the same oversupply that occurred around the Great Recession is unlikely, but many potential homeowners are struggling with the low supply and sellers’ market as a result. We’re closely watching how that trend plays out on Philadelphia. While there have been numerous single family construction projects underway or in the pipeline in 2018, we’re tracking how much of what’s proposed moves from concept to shovels in the dirt.
In the coming week’s we’ll be working on adding a year-over-year visualization of the PHI so you can see what neighborhoods and school catchments have seen the greatest gains from one year to the next. Take a look below at what we’re starting to work on (this is simply the citywide PHI growth year-over-year) and come back next month to see the visuals for our many geographic areas. See something interesting or curious about a specific neighborhood? Let us know and we just may answer your question with an analysis here on Present Value.
Gina Lavery is an Director at Econsult Solutions. Gina focuses and leads projects on market research and analysis for the Greater Philadelphia area.