Right now the Philadelphia market feels inflated especially in neighborhoods like Kensington. Do you think Philly is overinflated or not? Why?

I sure agree. If we were able to buy a duplex through MLS in NE Philadelphia last September for a little over 200K , the same exact ones are now 250K and up.

Some neighborhoods are much worse. Fishtown some areas are 2x where they were five years ago.

I understand Fishtown and think it's a strong rental market. More and more young people living there.

Some of the other areas concern me though. Parts of Brewerytown, extending into Kensington, further south/west areas in Pt Breeze.

And forget about newer areas west of River. You better be thinking longterm and getting purchase prices below 70%

Originally posted by Account Closed:

Some neighborhoods are much worse. Fishtown some areas are 2x where they were five years ago.

In reference to Fishtown, things are a lot different now.  Frankfort ave looks nothing like it did back then, and I would say the same about many main corridors in the area.  5 years ago it was not as built up as it is now and most people were still very negative on real  estate.  

Today there is simply not enough inventory for the demand of well-qualified buyers. 

Originally posted by @David Weintraub :

I understand Fishtown and think it's a strong rental market. More and more young people living there.

Some of the other areas concern me though. Parts of Brewerytown, extending into Kensington, further south/west areas in Pt Breeze.

And forget about newer areas west of River. You better be thinking longterm and getting purchase prices below 70%

 Please explain a newbie as I am what is so strong and attractive about Fishtown rental market?

I looked it up on realtor.com and there is almost no multyfalimy on sale, the prices are overinflated, would you even be able to cash flow? rental competition is overwhelming, like pages and pages of listings for rent, the schools have very poor ratings.

Please help to understand 

Svetlana

My two cents.  I believe Philadelphia may be approaching, if not already there, a housing bubble. We all see the cranes, the new buildings going up all over the Center City District, South Philly, River Wards, etc.  Some rentals and some permanent residence purchases.  However, does Philly have the residents or ability to attract the residents to fill these new units?  I think in order to keep pace with all the new units coming on market, Philly will need to rely on Millennials to fill these spaces.  Do we have enough of them now or coming to keep the market strong?  Philadelphia is a City with a 52% homeownership rate.  My guess would be that the majority of these owners are not Millennials.

While Philly is gaining population in the areas listed above it is losing population in other areas.  Long time residents are being priced out of their own neighborhoods.  The rate of home values as many have stated here are skyrocketing.  I am seeing bidding wars with investors paying as much as 10% above asking price (hmmm, I believe something like this happened back in 2005 with a financial crash in 2008).

What Philadelphia needs right now is a solution to the affordable housing issues it is facing.  I think we has investors may want to take the binoculars off of the overpriced hot neighborhoods and turn them to the neighborhoods with moderate to high homeownership rates (middle neighborhoods).  These are the RE tax payers, areas with high voting rates, moderate to middle class incomes.  These are the areas that will benefit most from the incorporation of moderate priced housing.  These are the neighborhoods that keep Philadelphia afloat when Center City and all the hot neighbors area were Class D and E neighborhoods.  It is sad the City has put not effort into keeping these areas stable.

Yea, I would say the hot neighborhoods in Philly are in a housing bubble.

Hi @DavidGritz,

Welcome to BP!

Depends on what you consider inflated. If you compare us with the Top 6 Cities Philadelphia included we are the most economical market to live, work and invest in. Compare to the rust belt cities in the mid west we have better job growth and a waterfront (10 Just Announced) yet to be developed. The market at $250k and below are cashflow appreciation moves for investing right now and will sustain a market slow down if happens with rates ticking up. Also, all of this depends on your buying power with mortgages, asset reserves and credit.

Let me know if you have any questions.

Regards,

Joe Scorese

As a millennial, I can see why fishtown, brewerytown, and many of the hot neighborhoods are attractive for young urban professionals. Close to work, bars and shops, the “cool and hip” places to socialize and spend as a young adult. Now that prices of those hot neighborhoods are too high, it’s spilling into surrounding areas but for many, it’s still worth it. At least the single family home market is still affordable for 20-30 year old working professionals, I can’t say the same for MFH as none cashflow when I was looking last few months.

As someone coming from DC, for the location and amenities, prices in many upcoming philly neighborhoods are still affordable. Being able to live in the city at the price points being offered for rehabbed SFH remain attractive for a homebuyer coming from more expensive markets.

Philly is a mixed bag.  Affordable housing certainly a problem, but that doesn't preclude other areas from being hot. 

I mentioned "good rental" areas because young people rent, and Fishtown/Northern Liberties, Brewerytown, etc, are seeing those types of folk.

Everything is a risk.  

I'm new to the market.  So far I have only done group projects where I earn little.  Hoping to do more but I want to watch the market a little longer.  Unfortunately an opportunity has arisen in two different neighborhoods: Mt airy and tacony.   

I've noticed house prices going up in east mount airy. Anyone think it's going to boom? I tend to think it could be a good deal if I can keep rehab costs low. Tacony I'm much less sold on.  People are trying to tell me that brooklynites are buying up everything and driving up land value in tacony, but I just don't see it.  Any thoughts? 

As a college student in Philadelphia, I see an upside to many parts of the city. Compared to other Northeastern cities, Philly has a lot more room to improve and if you ask me it is. It has a lot to offer to the younger population that other cities can not. I see West Philadelphia coming up in the next few years and already see a lot of housing development that is new and more luxurious than what is typical for the West Philadelphia area. I am sure that students fill many of these houses, but still see an appeal for millennials to come into the city. We shall see though.

As a Baltimore investor I am curious as to what other cities are doing

Mount Airy is nice and I know a few families there but end of the day the schools are bad, and it’s not like a walk to Center City. I have a hard time using the word ‘boom’ in Mt Airy but it’s anyone’s guess.

Hello @William George ,  Both neighborhoods you have mentioned have always been working glass stable neighborhoods.  With that said there are a few blocks in each of these areas that were a little rough. 

With respect to Mt. Airy there is an East and a West.  The two are not only separated by a street boundary but by income level.  I won't go into a lot of detail here but there are some statistics about this are (population, voting participation, income levels, and homeownership, travel time to Center City, and employment opportunities in the surrounding suburbs) you should consider. 

Tacony is an historic neighborhood 8 miles outside of Center City with the Delaware River as one of it's boarders.  I don't know if New Yorkers are buying in but there are two things I know for sure.  New Yorkers are coming in on buses, previewing Philadelphia real estate, so what this person told you may be true.  Secondly, a significant number of Russians are buying and moving into this area.  The Northeast historically has a large population of immigrants.  It is one of the most diverse areas in this City.

From your post, I assume (and forgive me if I am incorrect) that you may be new to the City.  I would be happy to share as much as I know about the neighborhoods you are researching.  Also, I have previously posted a lot of information about Philadelphia and its neighborhoods.  I am sure a quick search of my name will bring them up.

If you decide to pass on one or both of these deals I would appreciate it if you would consider passing one or both on to me.

@David Weintraub , Philadelphia is having a serious problem with school performance throughout the City.  I think we can point out a "bad school" in any given neighborhood based on our perceptions.  Where you preferring to a particular school in Mt. Airy and why do you consider it or them bad?

Fast forward 3 years, and the general Philadelphia county market is still -3% slightly undervalued as based on historical incomes. It has also performed well in price terms at 31% above its 2010 'fair valuation' level. Not sure about specific neighborhood, though the overall county figures are looking good.