A Breakdown of Philadelphia Neighborhoods and Values

53 Replies | Philadelphia, Pennsylvania

Hey Everyone! 

One of the obstacles I've been working to overcome is learning to speak the same investment language as both the people I buy from and sell to. Below, is my opinion of neighborhood breakdowns on how I define values for your standard row in the "City of Brotherly Shove."  These are rules of thumb that seem to be on par with today's market. Let me know if you guys are seeing different values on the rehabs or what you are defining as A/B/C/D Class neighborhoods! 

(I apologize if the copy and paste screws up the format of the post)

Standards for Philly Neighborhood and Rehabs

Parameters:

This is a rough estimate on homes that are between ~800 to ~1200 sf homes that are set up as SF 3 bed 1 baths. This is the metric typically used on row homes or twins, detached structures usually add landscape or more siding and a higher likelihood of pitched & shingled roof.

Definitions:

Full Gut

  • Full demo and clear out down to the studs
  • Reframe Property
  • Completely New Mechanics (HVAC, Electric, Plumbing)
  • New Windows
  • Full drywall and paint
  • New Kitchen
  • Redo Existing bathroom and likely add a full bath in basement and/or ½ bath on 1st floor (comp dependent)
  • Finish basement
  • Replace flat roof
  • New Flooring down to subfloors
  • Break, Flatten, Pour new Basement concrete
  • This assumes no underpinning or structure is needed. If needed add a minimum of 15k

Moderate Rehab

  • Can save at least two of the following- Electric, Drywall, Flooring, Plumbing (likely touch ups in the other two)
  • Redo Kitchen
  • Redo Existing Bathrooms
  • No framing or architect plans needed
  • Paint
  • Finish Basement
  • Add a split unit to existing duct work (prevent from tearing up existing plaster/drywall)

*Think of a grandma home that does not have knob and tube and has been on top of roof/windows so we aren’t as worried about mold/water damage*

Light Rehab

  • Comps do not need a finished basement or basement is finished to comp standard
  • Comps do not need HVAC or you can just add split unit to existing ductwork
  • Kitchen
  • Bathroom
  • Floors
  • Paint
  • No major rehaul of mechanics needed (aka do not need to rip out walls)

Lipstick

  • Paint, Floors, appliances in the most basic sense

ARV Range

Full Gut

Moderate

Light

Lipstick

+450 (A+)

150-300

N/A

N/A

N/A

380-450 (A)

90-120

70-75

N/A

N/A

270-400 (B/B+)

85-100

60-70

N/A

N/A

210-270 (B-)

75-80

60-65

45-55

N/A

170-210(C/C+)

65-75

50-60

40-50

15-30

140-170(C-)

60-70

50-60

35-45

10-20

120-140 (D)

55-65

40-50

25-35

5-15

Philly Neighborhoods Breakdown:

A+ : Obvious Prime Real Estate. You can feel the money in the air.

  • Anywhere between Washington Ave to Spring Garden between Delaware and Schuylkill River
  • U-City/ Spruce Hill (19104)
  • Chestnut Hill (19118), Historic West Germantown (19144), Historic Mt. Airy (19119)
  • Girard Estates (19145)
  • Fairmount (19130)
  • Northern Liberties(19123) & Fishtown(19125)

A: Only new construction and rehabs, with very very few shells and opportunity left, young trendy bars and coffee shops on every other corner.

  • · East Passyunk by Passyunk Ave (19147)
  • Manayunk (19127)
  • NE Philly past Pennypack Creek (19114, 19154, 19116, 19115)
  • W Philly: Cedar Park (19143), Wynnefield (19131)/Overbrook by St. Joe’s (19151), Powelton Village (19104), Squirrel Hill (19104)
  • East Falls (19129)
  • Francisville (19130)

B+: Ton of flips, new construction SF being sold, still a couple teardowns on the block, trendy bars and coffee shops starting to open.

  • Majority of South Philly-Newbold (19146/45), Point Breeze (19146/45), Wharton/ Dickinson Narrows (19147/48)
  • Brewerytown (19121)
  • True Temple - 11th to 19th, Cecil B Moore to Diamond, most investors may be stuck on Broad-18th (19121/19122)
  • West Oak Lane Closer to Cheltenham Ave (19126)
  • Port Richmond SE of Aramingo, SW of Allegheny Ave (19134)
  • East Kenzo (19125)/Old Kenzo (1923)/Norris Square (19123/33)
  • W Mt. Airy closer to Germantown Ave, the more north the better (19119)
  • Garden Court (19143), Cedar Park (19143), Walnut Hill (19139)

B: New construction going on but mainly as multis, few SF build and sell, most action are in flips rehabs, no bars or restaurants yet.

  • Grays Ferry close to 25th and Washington (19146)
  • West Sharswood closer to 25th and Girard (19121)
  • West Mt. Airy (19119) and West Germantown (19144)
  • Allegheny West that is west of Hunting Park Ave (19132/ 19129)
  • Cobbs Creek right by 52nd Street (19139, 19143)
  • Mantua and Haverford North that is SE of Lancaster and 42nd Street (19104)

B- :Plenty of Flip action, very few new constructions on the block, if it is, it is a buy and hold.

  • S. Philly: Grays Ferry (19146), Lower Moyamensing “LOMO” (19148)
  • East Sharswood, further away from Girard Ave (19121)
  • West Kenzo between Front Street and American (19133)
  • West Passyunk (19145)
  • W. Philly: Cobbs Creek between to 55-59th (19139/43)
  • North Kingsessing right by Baltimore or the railroad tracks (19143)
  • Port Richmond between Aramingo to Weikel (19134)
  • North East Philly from Cheltenham Ave to Pennypack Creek (19152, 19111, 19136, 19149)
  • E Mt. Airy (19119) and W Germantown closer to Germantown Ave and up north (19144)
  • Southern Eastwick (19153)

C: Mix of buy and holds and flips, typically a BRRR neighborhood.

  • West Side of Cobbs Creek this one is rapidly changing (19143/39)
  • South Haddington (19139)
  • Lower West Oak Lane (19138)
  • Mid Kingsessing (19143), Pockets of Elmwood Park (19142) down to Parts of Eastwick (19156)
  • East Germantown further away from Germantown Ave (19144, 19138) or closer to Wayne Junction (19144)
  • Rest of Port Richmond (19134)
  • Olney (19120), La Salle Area (19141, 19144) , Most of the neighborhoods that are adjacent to Broad, north of Roosevelt Blvd all the way to ~Godfrey (19141, 19126)
  • Strawberry Mansion from Cecil B to Diamond (19121)
  • Allegheny West North Of Cambria (19132)
  • Eastwick (19153)

C-: Mainly rentals with some low end flips.

  • Elmwood Park (19142)
  • Southern Strawberry Mansion from Diamond to Lehigh (19132)
  • Allegheny West between Somerset and Indiana Ave (19132)
  • NE Harrowgate (19134)
  • Carrol Park/Heston Ville (19131)

D: Almost exclusively rentals with home depot style flips.

  • Mill Creek (19139)
  • Most of Elmwood Park, especially the tinier and narrow streets (19142)
  • Parts of Strawberry Mansion by Lehigh Ave to Somerset Ave in Allegheny West(19132)
  • Pretty much all of 22nd Street to Frankford Ave between Lehigh and Roosevelt Blvd (with some exceptions for properties bordering Roosevelt Blvd) (19132, 19140, 19133, 19134)
  • Good Chunk of Frankford (19124)

F: Higher Crime and objectively Philly's center for its opioid epidemic. Inexpensive properties with higher rent.

  • Kensington and Allegheny Ave (19134)

@Jimmy O'Connor great post from someone who really knows Philly SFH real estate. You'd be the first to come to mind to put together something like this.

Only improvement would be a highlighted color-coded map to visualize...

Genuinely curious about this- at what point do we have to be careful about "redlining" when talking about this stuff? As long as we keep any of the protected classes out of the discussion, is it ok? Criminal activity is not a protected class and actual values and opinion of values and their trajectory is just data, right? I know we generally talk about redlining in terms of access to mortgages and other financial instruments, but doesn't NAR have some policies around it too and how real estate agents operate around the topic?

To be clear, I don't think this is redlining, but the flag always goes up in my head because I don't know enough about it. 

Thoughts?

Originally posted by @Rich O'Neill :

Genuinely curious about this- at what point do we have to be careful about "redlining" when talking about this stuff? As long as we keep any of the protected classes out of the discussion, is it ok? Criminal activity is not a protected class and actual values and opinion of values and their trajectory is just data, right? I know we generally talk about redlining in terms of access to mortgages and other financial instruments, but doesn't NAR have some policies around it too and how real estate agents operate around the topic?

To be clear, I don't think this is redlining, but the flag always goes up in my head because I don't know enough about it. 

Thoughts?


Redlining IMO would only be an issue if @Jimmy O'Connor said to stay away or refuse to do business somewhere; he did not do that, he just pointed out property characteristics. And there are some investors who go for those lesser quality areas, because they have experience in those types of properties and know they can buy there inexpensively.

 

Great Insight. I seen a lot of correlation to the planned changes from PCPC's Philadelphia Growth and Development vision for 2035. But they are falling behind quickly and encountering more and more challenges ie Crime. 

phila2035.org

Thanks for these granular insights about the neighborhoods. I especially appreciate how the subtle differences within neighborhoods are delineated and described, like the various parts of Germantown and Mt Airy, and in Cobbs Creek and west Cobbs Creek, which are the neighborhoods I know best. I don't have such deep knowledge of Philly as this, but this outline certainly correlates with what I have observed. Please also post the map when you complete it!

Thanks for this detailed post @Jimmy O'Connor ! You mentioned there being some exceptions for properties bordering Roosevelt Blvd in 19140. Are you referring to the south side under the Blvd? I’ve been eyeing the north Feltonville area and wondering if that falls into what you’re seeing as a positive exception?

@Kristen Kenner you could not have asked for a weirder pocket. Feltonville encapsulates some of the widest varieties of property styles, values, and demographics in the city. Something like this you and I need to hop on a phone call because I’ll get a little too granular with streets

@Jimmy O'Connor Interesting. While i agree Wharton/Dickinson Narrows/Newbold probably have more upside but they are extremely block specific. One block will be beautiful with bunch of new builds, next one 500ft away it’ll seem like you’re in a different country. I’m taking the established neighborhoods of Pennsport/Whitman all day over any of those. I will say i am biased though because i’m from Whitman lol and i would be leery of a buy and hold in some of those pockets

@Michael Lyons and how could i forget Point Breeze. I don’t really understand all the recognition it’s been getting. As a kid you didnt go anywhere near the area west of Broad, north of Snyder, east of 28th and south of Christian and i still believe this to be true, it’s still alot rougher than people want to admit.

Side notes:

-Gray’s Ferry isn’t anywhere near in the same category as Whitman or Pennsport.

-why did you group LOMO in as one neighborhood when it’s actually about 5 different ones, but specifically picked out Dickinson Narrows/Wharton/Newbold to be their own

-Not knocking your list as all i think it’s awesome and pretty much as good a list of neighborhoods as you’re going to get, i’m just pointing out my own perspective from personal experience

@Michael Lyons If interested i can give you a literal block by block A/B/C class breakdown of Whitman or Pennsport, it’s not as vastly as different as the block by block breakdown as neighboring areas, but there are still some blocks that are definitely better than others.

This is in terms of where i’d live and i know each and every one of these blocks like the back of my hand, but at the moment i wouldn’t invest where i wouldn’t like to live, which is why i invest specifically in these 2 neighborhoods because of how intimately i understand them. Obviously other people invest in places they wouldn’t live, i’m just not at that point yet

@Michael Lyons  thanks for the insight but I respectfully have a couple holes to poke. 

So I broke these up specifically based on numbers and property values, trying to avoid anecdotal bias . Point Breeze has numbers to back up the hype, big reason is that it has exploded by  Ori Feinbush from OCF who can be credited with blowing that neighborhood up, as he is doing with Grays Ferry, specifically evident of the properties closer to 25th street and even more so as you get to close to Washington where you see similar values and new builds as you do in Whitman and Pennsport (just the southern part really a few blocks north of Whitman, you're on point that the rest of Pennsport is better).  Below is a the screen shot of the area of Grays Ferry vs Whitman that I was grouping together in my post. Don't be fooled by the seemingly higher bars in Whitman, the normal line in Grays Ferry is actually closer to or above 250k for the same metrics while Whitman does not break that threshold:


Keep in mind, Grays Ferry is significantly larger than Whitman. South grays ferry, sure, definitely not the same but the ones that are right across the street from GradHo especially considering OCF's new massive development that is replacing the chocolate factory definitely have higher values. 

As a true south philly guy the neighborhood identities are different and bias may be at play but if you start looking into comps you would be surprised. I like targeting outside of where I would live for SF and small MF (1-4 units) because of the lower entry price, usually higher cash flow since your rental income is higher relative to your debt service, and your appreciation potential is high if you can read the writing on the wall. Big reason why I'm a huge C/C- fan. 

Lastly, I didn't break up LOMO because like most posts I make, it was getting too long as it was and the boarders on the other side are more stark in property values than that of those within LOMO. 

@Jimmy O'Connor that’s actually really surprising that Grays Ferry’s average is about the same, i honestly didn’t dive deep into the numbers and would of never guessed they’d be so close thanks for relaying that info. 


i actually had my eye on something in Grays Ferry but was a tad worried about an exit plan as i assumed it wouldn’t appreciate as much as Whitman or Pennsport but looks like i was dead wrong as you mentioned Feinbush has moved into Grays Ferry. Just goes to show that i need more research and can’t just assume that i think i know the area as well as i think i do because i’m from here. Now i think i’ll take a second look at that with the info i have now, i’ll be sure to credit you with an assist if it all works out lol