Philadelphia is experiencing a resurgence in real estate values. The Lindy Institute for Urban Innovation at Drexel University has found that in the second quarter of 2017, the city recorded 5,613 home sales ― the highest number since the third quarter of 2007, and up 17.6 percent from one year ago.
This number is also significant in that it shows the third year of sales greater than the pre-2008 peak, indicating that the Philadelphia housing market is once again robust and thriving.
As a result, developers and other real estate professionals have looked beyond center city to find deals in neighborhoods that had previously been overlooked due to crime or urban decay.
Moreover, the popularity of tax abatement incentives in neighborhoods with older homes in need of rehabilitation has attracted redevelopment efforts.
These factors are combined with the all-time lowest inventory(that’s homes on the market.) in Philadelphia history has created a housing market in which home values are rising as quickly as %49 in a single year, in some neighborhoods.
With these considerations in mind, the InvestPhilly team feels that the below neighborhoods represent the best opportunities to accomplish a successful real esate deal.
1. Point Breeze: According to online sites, Zillow and Redfin, this neighborhood is on the short list of fastest growing this year. Because of the low home prices and proximity to center city, the aspiring investor can acquire properties at relatively low prices while collecting rents that are more in line with what would be expected of center city. The area is proving especially popular among millennial residents that are attracted to the burgeoning gastro pub scene
2. Kensington: A formerly industrial area that has, in recent years, seen difficulties with urban blight. But the popularity of nearby Fishtown and it’s numerous bars and restaurants has seen many residents explore Kensington. Additionally, due to low inventory mentioned previously, developers have been keen to rehabilitate properties that had been ignored. These former bargains are quickly increasing in price. At South Square, a new 19-townhouse development, the asking price increased from the low $400Ks to $450,000 in the five months.
3. North Broad: This region of the city is filled with large industrial spaces that are currently vacant. Developers are eyeing these parcels with the intention of building them up into condo units, loft style apartments and mixed use spaces. This is a potent combination of inexpensive, spacious lots and low inventory. Especially as many companies are looking to retain talent by keeping their offices in the city, where millenials prefer to reside.
The InvestPhilly Team feels that the above areas represent great opportunities for real estate investors. In any venture, a combination of research, hard work and a bit of luck are necessary for success. Now that we’ve provided some research, the remaining luck and hard work are left to the reader.
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