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Posted Jun 22, 2017, 5:04 PM
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Join Date: Oct 2011
Posts: 18,474
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The hottest housing market in the Philadelphia region is ...
Quote:
Ten years ago, you may have been advised to steer clear from settling down in the areas south of Center City’s most prestigious and sought-after neighborhoods. That’s no longer the case.
Now, the ZIP code encompassing those areas has become the hottest housing market in the Philadelphia region — a designation years in the making, driven by multiple factors, including new commercial real estate developments and a natural progression of activity.
Jonathan Tannen, director at Philadelphia-based Econsult Solutions, recalled a time a decade ago or so when someone walking along the intersection of Locust and 23rd streets said, “You don’t want to go further south than this.”
People are clamoring for properties now.
These areas within the 19146 ZIP code are now seeing the most activity from buyers and sellers based on data from the Business Journals, which analyzed data provided by Zillow on 256 ZIP codes in Greater Philadelphia.
Seven of the 10 hottest home markets in the region are within city limits, with two in Montgomery County and another in Bucks County. But the 19146 ZIP code — which includes growing neighborhoods like Grays Ferry, Schuylkill, Graduate Hospital and Point Breeze — takes the top spot.
19146 getting the designation — and not the sparkling ZIP codes of other, sought-after areas of Center City — isn’t a surprise for those with skin in the game. It’s been years in the making.
Activity in this ZIP code started with Graduate Hospital north of Fitzwater Street. It then quickly spread south of Fitzwater to Carpenter Street and then a block lower to Washington Avenue, according to Noah Ostroff, realtor at Keller Williams Realty Philly.
“It is by far the most active ZIP code that I sell in,” Ostroff said. “The days on the market are lower than any other ZIP code in Philadelphia. I see the most numbers of bidding wars, and I see prices climbing in this area faster than any other ZIP code in Philadelphia.”
A property Ostroff listed months ago at 721 S. Smedley St. for $725,000, for example, had 25 showings and three offers during the first weekend on the market. It sold for full price within the first 48 hours.
In 2016, the average in-market figure was 75 days, according to Joe Herzog, a Realtor at Coldwell Banker Preferred.
Herzog also experienced the demand and activity in the 19146 ZIP code — a property at 2005 Pemberton St. purchased five years ago for $270,000 sold for $415,000 after four offers.
How did 19146 become so hot?
The housing market hasn’t been great for all of Philadelphia’s neighborhoods, Econsult’s Tannen said, but it’s been “huge” for neighborhoods exactly adjacent to Center City — areas that have historically been very poor. Parts of 19146 fit into that.
A house in the Schuylkill neighborhood of 19146, for example, now sells for 277 percent more than a house with similar traits in the city as a whole, or 3.77 times, according to Econsult Solutions data.
And 19146 becoming a hotbed for housing activity was part of a natural progression.
“It’s so close to where people want to be,” Herzog said. “Rittenhouse Square is comparable to beachfront property, and people want to be as close to the beach as they can. The Financial District is still close, but there are more amenities in Graduate Hospital.”
The area also had access to nearby restaurants and retail, public transportation and I-76.
Even one boarded-up house can be the rotten fruit in the barrel but 19146, once littered with boarded-up houses and vacant lots, was ripe for development.
“The fabric of the grid was just perfect for moving south,” said Stephen P. Mullin, principal at Econsult, who said the market is now seeing the demand and investment moving south.
Mullin said it’s “the most obvious expansion of the attraction of the central urban core for residential.”
Northern neighborhoods becoming more expensive forced people to look a few blocks down south to get the same house for less money, Keller Williams’ Ostroff said.
“That trend continued all the way down to Point Breeze,” Ostroff said. “Point Breeze became hot starting in 2010 when developers started to realize they could get land for cheap and make a profit.”
Houses that sold between $225,000 and $275,000 years ago are now selling for close to $500,000.
The lack of inventory is driving the competition in neighborhoods within 19146, Herzog said, resulting in fewer sellers than buyers, who are “at the edge of their seat” over properties.
New construction is also driving the housing market in 19146, “and people want new construction because of how nice it is and, most importantly, the tax abatement,” Ostroff said.
Major Construction in 19146 includes:
-Children’s Hospital of Philadelphia’s multiphase 8.4-acre Schuylkill Avenue project at 2716 South St.;
-The $130 million Lincoln Square development by Alterra Property and MIS Capital at 1400 Washington Ave. that will convert a vacant lot into 72,000 square feet of apartments and 350 parking spots;
-The conversion of the historic Royal Theater at 1524 South St. into a mixed-use development with 7,000 square feet of retail space and 20 below-ground parking spaces.
“Once there are developers investing money, everyone else is fighting over what’s left to flip or develop,” Herzog said. “As the values increase on the south side of Washington, it will bump things up on the north of Washington. Things close to Rittenhouse have seen monumental effects.”
The 19146 section of Philadelphia will continue to be the hottest neighborhood for some time, but prices will start to stabilize down the pike.
“Inventory is at an all-time low right now, and that is what is driving the prices up,” Ostroff said. “That won’t last forever, and once it stabilizes a little, the price appreciation will slow down, which I believe is a good thing.”
It will take some time, though.
“The timescale for these changes are important. When we start talking about it going down to Grays Ferry, that’s a 10- or 20-year timescale,” Econsult’s Tannen said.
“It will certainly go down into Point Breeze, which is already feeling the price pressures, and that could certainly expand. That, in 10 years, could look like what the one in South Street looks like,” he said.
This is a long-term structural change Philadelphia will experience.
“If zoning precludes you from building new high-rises, than the movement south, in terms of linear feed and how far, will be more because you can’t put people into single blocks,” Mullin said.
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http://www.bizjournals.com/philadelphia/news/2017/06/22/the-hottest-housing-market-in-the.html
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Also, it is awesome to see three cranes simultaneously in the air!
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