Open Wallet for First Time Home Buyers in Philadelphia
Zillow’s recent reports informs that home buyers across the country are finding it tough to buy their first home as the inventories of homes for sale are falling and prices are heading upward. Good news for Philadelphia home buyers –inventory of entry-level homes in Philadelphia increased by 2.3% while the inventory of homes for sale in the bottom third of the real estate market is down 7.8% from year-ago levels nationwide.
Another interesting point to look at is house values as measured by Zillow Home Value Index is increased to 3.1% in Philadelphia metro market as compared to April 2015. It is well below the nationwide increase to 4.1%.
Main reason to slow price rise in Philadelphia than elsewhere is attributed to slow income growth relative to other large East Coast markets. As compared to rise income from last year, Philadelphia increase to 1.6%, compared with 2.4% in DC, 2.2% in Boston and 1.9% in New York. This leads to the buying potential. Another statistic that sets Philadelphia market apart from its East Coast peers is homes remain cheaper per square foot in the city than in the suburbs. This is not the case with DC, New York, or Boston.
According to Zillow data, Philadelphia remains the most affordable of the large Northeastern metros. It looks even Baltimore is substantially more expensive than Philadelphia. When you compare the median house value per square foot, its $130 in Philadelphia, while in Baltimore, its $167.
It’s also reasonably affordable by national standards. Philadelphians spend 29.2% of their household income on rent and 14.5% on mortgage payments which are below national figures. Rising house prices are sending those percentages upward locally but it’s still within a reasonable range. When you compare it with average New Yorker it is 41.1% of their income to the landlord and 25%to the mortgage lender, fares not very well with Philadelphia. Relatively cheap homes compared to other places is why Philadelphia looks good compared to its neighbors.