Philadelphia Investors Conference: Philadelphia International Airport Presentation
Philadelphia Real Estate Market is Showing Promising Future
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Transcript of Philadelphia Real Estate Market is Showing Promising Future
1
CITY’S PRICES HAVE RECOVERED…BUT NOT SUBURBS!
House Price IndicesSource: Kevin C. Gillen
90.0
140.0
190.0
240.0
290.0
340.0
390.0
440.0
490.0
540.0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Philadelphia Regional House Price Indices 1980-2016by Philadelphia Area Submarket and U.S.: 1980Q1=100
Philadelphia*
Phila. Suburbs*
*Empirically estimated by Kevin C. Gillen, PhDNote: The suburban index includes all counties in the regional index, except for Philadelphia county.**Courtesy Federal Housing Finance Agency (FHFA)
Look at
thatspread!
September 2016 | BIA Philadelphia
2
WE ARE DEFINITELY ATTRACTING MORE AFFLUENT BUYERS
Million Dollar+ Home Sales in PhiladelphiaSource: Kevin. C. Gillen
*Only arms-length transactions between private sector entities were included in these numbers. These numbers do not include condos.
0
5
10
15
20
25
30
35
40
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Number of Philadelphia Home Sales* per Quarter
with Price>=$1 Million: 1997-2016
Q1
Q2
Q3
Q4
Qtly. Average
September 2016 | BIA Philadelphia
3
HOME SALES IN GENERAL HAVE ALSO RECOVERED
All Home Sales in PhiladelphiaSource: City of Philadelphia, Department of Records
*Only arms-length transactions between private sector entities were included in these numbers. These numbers do not include condos.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Number of Philadelphia House Sales* per Quarter: 1980-2016
Q1
Q2
Q3
Q4
Qtly. Average
September 2016 | BIA Philadelphia
4
INVENTORIES HAVE DECLINED TO RECORD LOWS
Homes for Sale v. Absorption RateSource: TrEND MLS
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Philadelphia Houses Listed For Sale: Inventory v. Absorption Rate
# Houses Listed For Sale
% Absorbed
# H
om
es L
iste
d "
Fo
r S
ale
" %A
bso
rbed
= (#
Sale
s/#
Lis
ting
s)
September 2016 | BIA Philadelphia
5
HIGH DEMAND + LOW SUPPLY = UPWARD PRESSURE ON PRICES
Homes for Sale v. Absorption RateSource: TrEND MLS
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
2001
2001
2002
2002
2002
2003
2003
2003
2004
2004
2004
2005
2005
2005
2006
2006
2006
2007
2007
2007
2008
2008
2008
2009
2009
2009
2010
2010
2010
2011
2011
2011
2012
2012
2012
2013
2013
2013
2014
2014
2014
2015
2015
2015
2016
Months' Supply of Inventory in Philadelphia
Seller's Market
Balanced Market
Buyer's Market
Months' Supply of Inventory measures how many months it would take to completely burn off the existing inventory of homes currently listed for sale, given their current pace of sales. 5-7 months is considered a normal, balanced market. More than 7 months indicates a Buyer's market, and less than 5 months indicates a Seller's market.
September 2016 | BIA Philadelphia
6
PHILADELPHIA’S LOCATION VALUE HAS INCREASED…
Land $Values/SqFt in Philadelphia in 2015 $DollarsSource: Kevin. C. Gillen
1980 2015
…BUT IS OVERWHELMINGLY CONCENTRATED IN AND AROUND
CENTER CITY.
September 2016 | BIA Philadelphia
7
THE DESIRE TO BE IN THE CITY IS REAL…BUT NOT UNIFORM
Density of Land Sales (#Sales/SqMi) in PhiladelphiaSource: Kevin. C. Gillen
1980 2016
CURRENT REDEVELOPMENT OF VACANT LAND IS
CONCENTRATED IN THE AREAS AROUND CENTER CITY.
September 2016 | BIA Philadelphia
8
RESULT: NEW CONSTRUCTION SKEWED TOWARDS RENTALS
140,000
145,000
150,000
155,000
160,000
165,000
170,000
175,000
180,000
185,000
190,000
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
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20
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20
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09
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20
16
***
Single-Family* Multifamily** Center City Pop.
*Structures with 1-4 dwelling units**Structures with >=5 dwelling units
# o
f U
nit
s
***Note: 2016 Numbers are YTD numbers through July 2016.
Building Permits Issued for Construction of Residential Units in Philadelphia: Single-Family v. Multifamily
Sources: U.S. CensusCenter City District
Po
pu
lati
on
September 2016 | BIA Philadelphia