All Forum Posts by: Isadore Nelson

 I'm interested in South Philly.  Where would you consider C/D neighborhoods there? Is it further south (ex. Lower Moyamensing, Whitman,..) and further west (ex. Point Breeze,..) from Passyunk Sq/E. Passyunk?  Sorry I'm not from Philly but I would appreciate any insight. 

@Isadore Nelson There is currently a glut of new housing that will take some time to absorb in specific neighborhoods but certainly not something impacting the entire city. The 19122, 19123 & 19125 zip codes stand out as neighborhoods currently experiencing this issue. It is also easy to understand why. These neighborhoods have had favorable zoning for a number of years and development usually follows the path of least resistance.

Keep in mind prohibitive zoning is a leading barrier of entry and is usually why neighborhoods lack new supply even when the underlying fundamentals and demand are strong. This is a trend you will observe across the country, not specifically in Philadelphia. It is also why such neighborhoods are most likely to appreciate because those who own properties in these neighborhoods are on the correct side of the supply/demand equation.

Since your post is focused on Philadelphia, the city has good fundamentals...strong Ed's & Med's, good accessibility to both NYC & DC, own port, international airport etc. These are all reasons to believe the neighborhoods that experienced the largest spike in new housing will effectively absorb the supply that was built in recent years. In the meantime I would focus on other neighborhoods. I personally invest heavily in northwest, particularly the 19119 zip code for the exact reasons I noted. The neighborhood has some of the most prohibitive zoning and strong demand, exactly the combination that leads to good absorption.

There are a lot of areas in Phila that have way too much supply right not. Some is from nearby development of major mulit family complexes happening in areas like northern liberties, fishtown, point breeze etc. There is way too much supply and these "big dog" buildings are offering insane incentives, effectively killing the small landlord. There was already a lot of supply in the first place, but now your 2 bed apartment has to compete with these large buildings trying to fill vacancies literally offering 2 months free rent in some cases. They also have ammenties you might not like: pools, gyms, WFH areas, etc.

Then you have areas like temple that area not renting well because of the surrounding location of university and lower demand for students to live there. 

Also you have locations like SW phila that were heavily pushed onto investors chasing BRRRR. On paper looks great, in reality too much hassle, not as great quality tenants, and what you're seeing: too much competition.

Based of my market knowledge, the strongest rental areas are the suburbs (strong neighborhoods in bucks, chester, delco, montco (main line), northeast phila, parts of mount airy, chestnut hill. 

@Stuart Udis Went into more detail on why some areas are affected.

@Stuart Udis is on point as always. Just to expand on his point about a glut of new housing- we are certainly feeling it when it comes to leasing and renewals throughout 90% of the city. 

We manage over 500 rental units in almost every zip code of Philadelphia, and our 2024 leasing year has been the most difficult in my 7 years of professional property manager experience. We have faced the longest average on-market times and fewest leads per day on market that we've ever recorded. In my professional opinion- supply currently exceeds demand throughout most of the city. Especially in the zip codes @Stuart Udis mentioned above, and around Temple University. 

New building permits have slowed down, relatively speaking, in 2024. I believe we are still 2-3 years out from the market equalizing toward the historic mean of leasing times. 

Areas near college campuses are good places to begin as is Center City and south philly. Avoid the c/d neighborhoods, they are trash and difficult to efficiently operate in. 

@Isadore Nelson There is currently a glut of new housing that will take some time to absorb in specific neighborhoods but certainly not something impacting the entire city. The 19122, 19123 & 19125 zip codes stand out as neighborhoods currently experiencing this issue. It is also easy to understand why. These neighborhoods have had favorable zoning for a number of years and development usually follows the path of least resistance.

Keep in mind prohibitive zoning is a leading barrier of entry and is usually why neighborhoods lack new supply even when the underlying fundamentals and demand are strong. This is a trend you will observe across the country, not specifically in Philadelphia. It is also why such neighborhoods are most likely to appreciate because those who own properties in these neighborhoods are on the correct side of the supply/demand equation.

Since your post is focused on Philadelphia, the city has good fundamentals...strong Ed's & Med's, good accessibility to both NYC & DC, own port, international airport etc. These are all reasons to believe the neighborhoods that experienced the largest spike in new housing will effectively absorb the supply that was built in recent years. In the meantime I would focus on other neighborhoods. I personally invest heavily in northwest, particularly the 19119 zip code for the exact reasons I noted. The neighborhood has some of the most prohibitive zoning and strong demand, exactly the combination that leads to good absorption.

It's a good concern. Try to track days on market and price trends to see how well an area is selling.

There is a housing shortage in general, so every house will eventually be a home. The key question is, "At what price?" You should think about what you would offer with regards to your competition and compare rents. You can price your rental near the bottom of your comparable competition to rent faster. Alternatively, you can offer more such as central air when the competition doesn't have it.

Avoid areas with a lot of new rental deliveries. Philadelphia as a city is nowhere near saturated, but you aren't buying the city. You are buying 1 property in a local neighborhood. Philly can vary quite a bit street-to-street. Look at that property's immediate area. It's all location, location, location. The suburbs are good areas for prospecting too.

It's a good concern. Try to track days on market and price trends to see how well an area is selling.

There is a housing shortage in general, so every house will eventually be a home. The key question is, "At what price?" You should think about what you would offer with regards to your competition and compare rents. You can price your rental near the bottom of your comparable competition to rent faster. Alternatively, you can offer more such as central air when the competition doesn't have it.

Avoid areas with a lot of new rental deliveries. Philadelphia as a city is nowhere near saturated, but you aren't buying the city. You are buying 1 property in a local neighborhood. Philly can vary quite a bit street-to-street. Look at that property's immediate area. It's all location, location, location. The suburbs are good areas for prospecting too.

Hi @Christopher Mansfield, are meetups still going on in Poughkeepsie?