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Philadephia PA : Prices, Transport, Opportunities

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Downtown competition : Philadelphia vs. Boston


Philly is not so Poor as some think


here's a fan of Philly:

Originally Posted by Summersm343 trn.gif
Hahahaha, I'll just sit back and watch you tear your rep to shreds with these ridiculous comments. It must be that Philadelphia has beaten you in every possible match up you can think of, so you must result to calling us poor and crime ridden. Look at your own city before you start claiming these things about Philadelphia. Your city is worse. If D.C. can't straighten it's act with the entire Government body living within it's borders, then there is no hope for that city. oglvvd.gif
Yes, I am sure the people living in Rittenhouse Square, Society Hill, Old City, Fitler Square, Logan Square, Washington Square West, Graduate Hospital, Bella Vista, Queen Village, Northern Liberties, Farimount, Clark Park, Cedar Park, Spruce Hill, Chestnut Hill, Roxborough, West Mt. Airy are all poor. Yep, there is no affluent, wealthy, rich or upper middle class neighborhoods in the city, but I just named 17 neighborhoods.
That's not even naming the middle class neighborhoods. Which would consist of the rest of Center City, the rest of South Philadelphia (except point breeze). The rest of University City, some of West Philadelphia like Powelton Village, Woodland Terrace, Wynnefield, Wynnfield Heights, Overbrook Park, Overbrook Farms, some neighborhoods in the Southwest, most of the Lower North that I haven't named (Fairmount and Northern Liberties) would be Franklintown, Callowhill, Poplar, Spring Garden, Spring Arts, the North Broad Corridor (up and coming), West Poplar(up and coming), Yorktown, Templetown (up and coming). The rest of the neighborhoods in the Northwest (Germantown, Morton, West Oak Lane, Cedarbrook, Mt. Airy, Andorra, East Falls, Manayunk, Wissahickon, East Mt. Airy. Some neighborhoods in like East Oak Lane/West Oak lane. The entire Northeast is middle class. Oh and the Riverwards, like Kensington, Olde Kensington, Fishtown, Bridesburg. West Kensington is just bad news hand.gif

You're right though... all of those neighborhoods are poor and run down.

Here is a list of all of the Philadelphia neighborhoods corresponding to their district of the city... educated yourself.
List of Philadelphia neighborhoods - Wikipedia, the free encyclopedia

Here is a map of the 12 districts that make up the city oh Philadelphia. The worst sections of the city are in the Upper North (Strawberry Mansion, West Kensington, Hunting Park) and the lower west portions of West Philadelphia and the Upper West Portions of Southwest Philadelphia. Oh, and Point Breeze in South Philadelphia is pretty lame. It is being gentrified though, and the neighborhood next to it Newbold is quite nice and is the new "gayborhood"

Read more: http://www.city-data.com/forum/city-vs-city/1134479-downtown-battle-philadelphia-vs-boston-vs-35.html#ixzz3VDPkZC21

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Philadelphia Gas Works urged to replace aging pipelines
Tuesday, 21 April 2015 6:00 AM ET

The utility also owns more than half of Pennsylvania's high-risk gas pipelines, the utility commission said. Three-fourths of PGW's high-risk pipelines in service- about 1,500 miles- are cast iron, the fourth-highest amount of any utility in the nation and about half of Pennsylvania's cast iron, it said. Its pipelines sprang more than double the number of...

Source: The Associated Press | By: By MARC LEVY, Associated Press

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Small but ground-breaking development near Temple University station


Published on Mar 31, 2014

Paseo Verde featured in AHTCC's new video highlights the Housing Credit as a vital tool for revitalizing neighborhoods. Featuring Paseo Verde in Eastern North Philadelphia, the country's first LEED Neighborhood Development (ND) Platinum property, the video encourages viewers to protect the Housing...


(Jonathan Rose has a vision of more affordable Transport Oriented Development):


First LEED platinum project in the US



Published on Mar 31, 2014

Paseo Verde featured in AHTCC's new video highlights the Housing Credit as a vital tool for revitalizing neighborhoods. Featuring Paseo Verde in Eastern North Philadelphia, the country's first LEED Neighborhood Development (ND) Platinum property, the video encourages viewers to protect the Housing

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(this was announced back in 2012, spurring the Naval yard area):

Ground Breaks Today for Navy Yard's First Hotel




Ground breaking news! (See what we did there?) Works begins today for the Philadelphia Navy Yard's first hotel, a Courtyard by Marriott. The Philadelphia Navy Yard will unveil its first hotel in late 2013, as construction for a $34 million Courtyard by Marriott begins today.

In addition to 172 guest rooms, the five story, 99,000-square-foot hotel will boast a restaurant, lounge, fitness center, and 2,000 square feet of meeting space. To be located at Rouse Boulevard and Intrepid Avenue, the energy-efficient hotel is said to be seeking LEED certification. Development is by Ensemble Hotel Partners LLC and Liberty Property Trust/ Synterra LP; Erdy McHenry Architecture is behind the modern design.

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TAKE THE TRAIN to the Plane


in checking flight availability thru Expedia,

I discovered we can take a Train from Central philadelphia directly to Newark airport,

and save time and money that way

This works especially well when one has international flights that go thru Newark

(such as to London or Hong Kong, but not to Philadelphia)

ZFV*(Philadelphia 30th St Train Station)* - International flight

"United 3162 operated by Amtrak Train



*ZFV is an "airport" code for Philadelphia train station and they for the most part match all of the fares from Philadelphia airport, which are often lower than from EWR. The flights are actually from EWR but come with a free train ticket (usually they are essentally PAYING you to take the ticket) from Philadelphia city to EWR. These train tickets are very expensive; even though the ride from Philadelphia to EWR is only an hour, Amtrak charges over $100 round-trip (standard non-Acela service)

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GENTRIFICATION : Will Philly follow NYC, Washington and other cities ?



Brewerytown, Philadelphia : http://phillyskyline.com/photo/jimmillisky/brewerytown/index5.htm


View Poll Results: Which city is experiencing the most gentrification?

New York, N.Y.------- : 44 : 25.29%
Washington, D.C.--- : 39 : 22.41%
Chicago, Illinois----- : 24 : 13.79%
Atlanta, Georgia --- : 24 : 13.79%
Los Angeles, CA--- : 18 : 10.34%
Philadelphia, PA-- : 12 : 06.90%
San Francisco ----- : 11 : 06.32% : why so low?
Pittsburgh, PA ----- : 09 : 05.17%
Baltimore, MD. ----- : 09 : 05.17%
Boston, Mass. ----- : 09 : 05.17%
Cincinnati, Ohio --- : 08 : 04.60%
St. Louis, Missouri : 08 : 04.60%
San Diego, CA ---- : 06 : 03.45%
Buffalo, N.Y.-------- : 02 : 01.15%
Other---------------- : 14 : 08.05%


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UPDATED The Chart, and added some Price Data


Philadelphia PA Price Trend ... update





Qtr / Year : Ave.Price : /SqFt : =sqft. :
Dec. 2010 : $125,000 : $115/sf : 1,087 :
Dec. 2011 : $139,000 : $129/sf : 1,078 :
Dec. 2012 : $140,000 : $130/sf : 1,066 :
Dec. 2013 : $141,000 : $130/sf : 1,085 :
Q1 - 2014 : $142,000 : $131/sf : 1,084 :
Q2 - 2014 : $144,000 : $142/sf : 1,014 :
Q3 - 2014 : $155,000 : $144/sf : 1,083 :
Q4 - 2014 : $139,000 : $128/sf : 1,081 :
Q1 - 2015 : $130,000 : $125/sf : 1,040 :
Q2 - 2015 : $135,000 : $136/sf : 0,993 :
Tulia is the main source : http://www.trulia.co.../market-trends/


Summary for Philadelphia

The median sales price for homes in Philadelphia PA for Mar 15 to Jun 15 was $135,000.


This represents an increase of 3.8%, or $5,000, compared to the prior quarter and a decrease of 6.2% compared to the prior year. Sales prices have depreciated 6.3% over the last 5 years in Philadelphia. The average listing price for Philadelphia homes for sale on Trulia was $272,478 for the week ending Jun 03, which represents an increase of 7%, or $17,764, compared to the prior week and an increase of 7.3%, or $18,633, compared to the week ending May 13.


Average price per square foot for Philadelphia PA was $136, a decrease of 4.2% compared to the same period last year. Popular neighborhoods in Philadelphia include Northern Liberties/ Fishtown, Fairmount/Art Museum, Bella Vista/ Southwark, Northeast Philadelphia, Manayunk, and Queen Village/ Pennsport.

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Cheapest Mortgage Loans in Philly


This come from the Mortgage Guide that I clipped from a Philadelphia newspaper about two weeks ago


APR-30yr : Institution-------- : Apr-15yr+points : website

3.930 % : Price Financial Svc. : 2.875%+0.000 : pricefinancial.net

3.934 % : Hamilton National -- : 3.000%+0.000 : hamiltonnational.com

4.001 % : Sky Financial Svcs. : 2.990%+0.000 : skyfinancialloans.com

4.038 % : United Savings Bk. : 3.250%+0.000 : unitedsavingsbank.com

4.157 % : ColonialCommunity: 3.375%+0.000 : 1stcolonial.com

4.370 % : Prudential Svgs Bk : 3.500%+0.000 : prudentialsavingsbank.com

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The latest news on Phily house price,"

The average house value "soared" by 7.3 percent in 2015's second quarter compared with the first three months of the year"




In the spring, Philadelphia's single-family housing market had its best quarter in a decade, with prices and sales volume surging throughout the city.

The average house value "soared" by 7.3 percent in 2015's second quarter ..


Spring 2015's median price of $138,600 was up 18 percent from $117,500 in the previous quarter, and 20 percent higher than the $115,000 median of second-quarter 2014, Gillen said. (The report did not include sales of condos, which he defines as multifamily housing.)

Every city neighborhood saw an increase in price - the first time that has occurred since second quarter 2013, he noted.




Qtr / Year : Ave.Price : /SqFt : =sqft. :
Q1 - 2015 : $130,000 : $125/sf : 1,040 :
Q2 - 2015 : $135,000 : $136/sf : 0,993 :

Reported- : $138,600

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Gentrification #1 : facts, figures... and changing profiles


The issues that can divide a changing neighborhood


Philadelphia is ranked as the ninth most racially segregated metro area in America based on an analysis of the 2010 Census. Many Philadelphians live in neighborhoods where a single racial group represents 75 percent or more of the population.




It also is one of the poorest cities, with 26.9 percent of residents deemed poor by federal standards.

While population is on the rise, homeownership is declining, dropping to 52.2 percent from 59.3 percent.

Thirty-eight percent of homeowners earn less than $35,000; and 40 percent of homeowners do not have a mortgage.

These challenges are formidable. And so the economic pressures created by rising home values and higher taxes feed the fears that longtime homeowners will be forced to sell because they can no longer afford to stay.


But Adams says there is little direct displacement due to gentrification.

"When housing specialists use that term, they really aren't talking about displacing people," she said. "They are talking about market pricing that makes it impossible for people who are looking to move into that neighborhood who cannot find an affordable unit. That really is more the dynamic of gentrification now."


Adams' academic explanation doesn't mean much to the relatively few longtime black residents remaining in Center City West. They feel differently.

In just 15 years, they've watched longtime friends and neighbors move away, and be replaced by mostly white well-to-do strangers.

Jerome Whack, the owner and operator of the 20th and Christian Street Pharmacy for 45 years, said his customers complain daily about the disappearance of affordable apartments in the area. They tell him of rent hikes they can't afford, landlords no longer willing to accept their federal rent vouchers, and of new owners who want them out.

The new renters are willing to pay $1,300 and up for renovated digs in old brownstones just a few blocks from trendy shops on Walnut Street and the entertainment venues that line South Broad Street.


> http://www.philly.com/philly/news/Gentrification_in_Philadelphia.html

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Gentrification #2 :

Renters are the first to know

If you want to zero in on real-estate hot spots or pinpoint which neighborhoods are either becoming gentrified or are headed in that direction, economist Kevin Gillen says look at property-rental prices -- not home sales.

Gillen, a senior research consultant at the Fels Institute of Government at the University of Pennsylvania, is an expert on urban economics and the Philadelphia real-estate market.

Recently, the Daily News caught up with him at his Walnut Street office to ask about his research on rental prices in the city. Using rental-price data from 2010 to 2014, Gillen compared the top 10 neighborhoods, where rents have skyrocketed, with the bottom 10 neighborhoods, where rents have remained relatively flat.


Q: What do rental prices tell us?

A: Well, rents reflect the willingness to pay to live in a certain area, whereas house prices represent a willingness to invest in an area. So rents tend to be a bit more of a leading indicator than house prices because they can change more quickly, whereas buying and selling homes is a rather lengthy process.

Q: What do the top 10 highest-rent-growth neighborhoods have in common?

A: It's simple: proximity to Center City. These neighborhoods are either close to Center City or they have transit accessibility to Center City, where you can walk to [sEPTA's] Broad Street Line.

Q: What do the 10 neighborhoods at the bottom of the rental market have in common?

A: The bottom 10 are either far-flung and/or it's a long commute to Center City. For instance, Mount Airy is a nice area, but you have to drive or it's a 30-minute train ride into Center City.

Q: So the farther you get away from Center City, the lower your rent is likely to be?


Daily News Graphic

A: Absolutely. The whole gentrification issue is really the story of the outward spread of Center City. The rest of the city is still stuck in the 1970s. I would say proximity and accessibility to Center City is not just the primary thing driving gentrification in Philadelphia, it's the only thing. The main thing that is driving it is how quickly and easily you can get to Center City, because that's where the good-paying jobs are.


Q: What do the top three rent-appreciation neighborhoods -- University City, Cedar Park and Powelton -- have in common?

A: They are all located in greater University City. They reflect a lot of the investment that Penn and now Drexel are making in the neighborhoods. University City is kind of an employment center that is an extension of Center City, and accessibility to employment is the key factor.


Q: OK, what is going on with rent increases in neighborhoods like Fishtown and Point Breeze?

A: These are neighborhoods where, again, as Center City has become more and more expensive, people can't afford it, so now they are moving out to the next neighborhood. As the core becomes more and more expensive, people move to the next neighborhood


> more: xx

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Home renters face biggest price hike in seven years

Published: Sept 16, 2015

Rents in U.S. on track to rise more than 3.5% in 2015


By JeffryBartash Reporter


Americans who rent instead of owning are still on track to experience the biggest increase in housing costs in seven years.

The cost of rent in the United States rose in August for the 58th straight month, with prices up 3.6% in the past year, the government reported Wednesday. That matches the highest year-over-year increase in rent since 2008.

Read: U.S. inflation falls in August for first time since start of 2015

Rent has been rising because of growing demand and a shrinking number of units available. Prices are climbing fastest in big cities where many millennials have flocked to live and work. A surge in hiring over the past few years has also given more Americans the financial means to obtain their own places to live.

Builders have ramped up construction on condos, townhouses and other rental properties, but not enough yet to slow the increase in prices.


Higher rents have stoked concerns among some economists that housing costs — the single biggest expense for most households — could spur a sustained increase in inflation and eventually hurt the economy. Average rents range from a low of $760 in Arkansas to a high of $2,640 in New York, according to MyApartmentMap, a website that tracks prices in the 50 states.

. . .

Some 63.4% of U.S. households owned their own homes in the second quarter. While the rate of home ownership has tumbled to a 48-year low, home owners still account for almost three-quarters of the spending on shelter each year.


> http://www.marketwatch.com/story/home-renters-face-biggest-price-hike-in-seven-years-2015-09-16?mod=MW_story_recommended_default&Link=obnetwork


Rental Trends in Pennsylvania, and Philadelphia

Mon. Penn. : Philly- : PH/PN
Apr. $1205 : $1489 : 123.6%
May $1213 : $1526 : 125.8%
June $1233 : $1518 : 123.1%
July $1245 : $1515 : 121.7%
Aug. $1218 : $1458 : 119.7%
Sep. $1210 : $1478 : 122.1%
Oct. $1206 : $1503 : 124.7%
Do Philly rents decline in the summer when students leave the universities?

It seems that the pressure after summer comes in the 1BR and 2BR properties

size- : studio : - 1 Br- : - 2 BR- : - 3 BR- :
Sep : $1063 : $1,144 : $1,478 : $1,726 :
Oct : $1038 : $1,152 : $1,503 : $1,689 :

> http://www.myapartmentmap.com/data/cities/pa/philadelphia/


Philadelphia Proximity:

Pennsylvania $1,210 ( -$ 8)
New York----- $2,640 (-$95)
New Jersey--- $1,789 ( -$ 4)
Delaware----- $1,090 ( -$ 2)


> http://www.myapartmentmap.com/rental_data/

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Pew: City residents still confused by new property-tax system
Philly.com-16 Sep 2015

The 2013 overhaul of Philadelphia's property-tax system hit residential homeowners hard, with valuations tripling for nearly a third, according to a report released Tuesday by the Pew Charitable Trusts.

Yet many homeowners are slow to use relief programs, and 68,000 eligible Philadelphians have failed to apply for an exemption that could trim their tax bills, the report found.

"It's not really clear why some homeowners have failed to apply," said Emily Dowdall, the report's author. "City officials told us they have tried to make the process as easy as possible."


Report: Commercial property tax rate change could bring nearly 80K ...

Philadelphia Business Journal (blog)-8 Sep 2015
Philadelphia Growth Coalition hired Econsult Solutions Inc. to analyze the affect of its proposal to raise additional revenues by increasing the tax rate on commercial real estate, which would generate enough funds for the city wage tax to drop below 3 percent by 2025, the report said.

Lowering the wage and business taxes, combined with the revenue from the higher commercial real estate tax, according to Econsult, would potentially create 79,000 jobs over a decade.

“That compares to an increase of just 18,000 jobs over that same period if the changes are not enacted,” the report said.

An amendment to the state’s constitution would be needed to allow Philadelphia to charge a higher tax rate for commercial real estate than for residential. Under state law, all property must be taxed at the same rate.

In latest plan, Wolf backs off Pa. sales tax hike
Philly.com-6 Oct 2015
The new revenue would also be used to eliminate property taxes for an additional 216,300 seniors and 31,000 households with disabled ...

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Note from Tony C's Blog

Re; FORECLOSURES - Good or Bad News ?


Dex T says:

Foreclosure crisis lingers: Repossessions spike 66%

“Bank repossessions, the final stage of the foreclosure process, jumped 66 percent year over year in the third quarter of this year, according to RealtyTrac, a foreclosure sales and analytics company. It’s the largest annual rise ever recorded in bank repossessions by RealtyTrac. More than 123,000 homes went back to the bank in just three months.”


  • CampFreddie says:

    The final capitulative purge, very bullish indeed imo.

  • tommyboys says:

    This is only because of the “stops” they were required to put into the system over the past half decade. These are all expiring now so the houses that should have been taken back 3-4-5 years ago are now available to do so. Media loves to scare joe six pack – again fear sells. Stop buying/spreading fear. OK that’s definitely last post

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Accelerating gentrification in some old neighborhoods?




Here's a point suggested by the chart. Because most of the housing in the project-based rental assistance program was created in the 1970s, it tends to be focused in cities that had matured by that time. Cities that grew during the subsequent population booms in the South and Southwest generally have fewer subsidized units.

“We have a housing policy that has not kept up with the geography of poverty,” Poethig said.

. . .

There are currently about 1.34 million units of affordable housing created by a HUD program known as Section 8 project-based rental assistance, according to a blog post published on Wednesday by Poethig and her Urban Institute colleague Reed Jordan. More than 30 percent of those units are kept affordable by contracts that are set to expire by the end of 2017.

That raises the possibility that property owners, especially in gentrifying neighborhoods, will seek to cash out, wiping affordable units off the books. "Congress doesn't let HUD do new contracts," she said. "Once a project is lost, it's lost."


> http://www.bloomberg.com/news/articles/2015-10-21/a-lot-of-cheap-housing-is-about-to-get-very-expensive

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Draw the Line ?
Black / Grey - Demograph : Line at??
19131 / 19104 -50-75%W :
19130 / 19104 -50-75%W : 46th, above Baltimore
19143 / 19104 -50-75%W : 45th, below Baltimore
19143 / 19146 -50-75%Hs :
19143 / 19104 -50-75%W :

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Zell dumping is not a bullish sign, at first look.

In Philly, we are seeing rising prices and strong buying demand in the sector where I have invested.

And it is only a little higher than the lows of some years ago, not massively higher.


Here's Philly



But if you look more closely at the article, you will see that Zell is shedding the Suburban stuff, and buying in Urban locations

"where young people are moving and where it is more difficult to build..."



The collapse of the housing bubble transformed America into a nation of renters

as the following chart of the homeownership rate makes abundantly clear:


That means that when Janet Yellen talks about low inflation, she’s talking to a nation which is struggling to cope with the following reality on a day to day basis:


When looking at the above, and when considering that, as we reported over the summer, in no state can a minimum wage worker afford a 1-bedroom apartment, one might be tempted to suggest that the top is in.

But not so fast.

It’s also possible that between crippling student debt and demographic shifts, the homeownership rate will continue to plunge.

As things stand today, household formation is being delayed as new graduates cope with i) a jobs market that churns out waiters and bartenders rather than breadwinner jobs, and ii) a student debt burden that averages $35,000 but is in many cases far higher. Meanwhile, a shift in the population to include more Hispanic Americans is also putting pressure on the the percentage of Americans who own a home. These factors could provide a tailwind for the market for the foreseeable future and that, in turn, means rents will only rise further.


One person who’s betting that we may have hit peak-rent is billionaire Sam Zell who just dumped a quarter of the apartments held by his real estate company for some $5.4 billion. Here’s more via WSJ:

Why is the deal particularly notable? Because Zell has traditionally had a very keen nose about such things as "market peaks": the 74 years old is credited with calling the top of the real-estate market in 2007, when he sold another of his companies, Equity Office Properties Trust, to Blackstone for $23 billion. Soon after, the commercial-property market crashed as prices fell and debt defaults surged.

Sam Zell has agreed to sell more than 23,000 apartments controlled by his real-estate company, Equity Residential, for $5.4 billion to Starwood Capital Group, the companies said.


The transaction, announced Monday, represents about a quarter of the units in Equity Residential’s portfolio of apartments and would be one of the largest since the recession. It also comes on the heels of Blackstone Group LP’s announcement on Tuesday that it is buying Stuyvesant Town and Peter Cooper Village in Manhattan for $5.3 billion.


Across the commercial-property sector, which includes office, retail and apartment buildings, growing numbers of investors have begun to question how long good times can last after a steep run-up in prices since the downturn.


Record values for offices and hotels in the U.S. and Europe, fueled in part by central banks’ multiyear efforts to keep interest rates near record lows, have prompted some big investors to reassess the market. Apartments have been especially hot, with average U.S. rents climbing 20% over the past five years, according to research firm REIS Inc.


The transaction brings together two savvy deal makers on opposite sides of the trade, Mr. Zell and Starwood Capital Chairman and Chief Executive Barry Sternlicht.

As for the current cycle, this deal merely marks the latest liquidation by Mr. Zell’s since 2012. Back then, Equity Residential was a buyer. The firm teamed with AvalonBay Communities to purchase apartment giant Archstone for $6.5 billion, not including about $9.5 billion in debt.

But Equity Residential has become “less aggressive as buyers of assets” in recent years, Mr. Zell said in an interview late Friday. Instead, it is getting out of suburban markets and into downtown urban centers, where young people are moving and where it is more difficult to build, he said.


Most of the 23,300 apartment units in the deal, roughly a quarter of Equity Residential’s total, are low-rise and mid-rise units in suburban markets in and around southern Florida, Denver, Seattle, Washington, D.C., and Southern California. Analysts expect a significant amount of new supply to be concentrated in those markets in coming years.


> http://www.zerohedge.com/news/2015-10-26/sam-zell-dumps-23000-apartments-54-billion-peak-housing-bet

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TRANSPORT MATTERS : Buy a house in Philly, Not a Car to keep inflation in check!


My Further Comment on the article about Zell seling in post #40

- The article says:

"...in no state can a minimum wage worker afford a 1-bedroom apartment, one might be tempted to suggest that the top is in. "




Here's something that is little discussed:

In some cities such as Philadelphia, if people earning a decent middle class income get rid of their cars, and use public transport,

then they can afford to buy a home. All they need to do is live close to their jobs - walking distance, biking distance, or maybe a short

duration commute using public transport...



(The largest rental rises has been near the Job growth in the Center City area -

Four large skyscrapers are currently under construction, suggesting more job growth)


Here I am thinking of younger people, starting out. Perhaps they attended University in Philadelphia, liked the city, and decided to stay on.

They might rent for a few years, and then buy. That works in Philly, where home prices are cheap, but not so well in Manhattan,

where home prices are very expensive - about 8X Philly !.


Philadelphia median home prices: PH-update / NYC mean selling price is: $1.196 Million



If you buy a home for $150k in Philly, and finance 80% with a 4% mortgage, the monthly interest cost is just $500

Rental yields are attractive - you can get over 10% pretax on 80-100 year old secondhand homes in many parts of the city.

(I recently bought one at about half the median price, and my rental return is about $900, yielding 11%+ pretax, after all expenses.)

Because overall US rents just keep in rising - this chart is from post #40


US Mean rentals, Asking price for Vacant units - up to Q2-2015



The article said:

"Apartments have been especially hot, with average U.S. rents climbing 20% over the past five years, according to research firm REIS Inc."

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  • 5 weeks later...

Hi Guys
I think you might enjoy this podcast as much as I do.
It focuses on why three suburbs of Philadelphia, and why they are appealing to young families and investors.
Towards the end, there is also some talk about the spreading gentrification in Philadelphia itself, and they mention areas like Liberty North, Fishtown and Kensington

Interview with Johnny Sanphillippo
MP3: http://shoutengine.com/StrongTownsPodcast/StrongTownsPodcast-0261-johnny-sanphillippo-13766.mp3

I hope you like this as much as I do - I am a regular listener of the Strong Towns podcasts
> http://www.strongtowns.org/podcast/

I hope you like this as much as I do - I am a regular listener of the Strong Towns podcasts
> http://www.strongtowns.org/podcast/

BTW, you might want to put in your diary the next CNU (Congress of New Urbanism) meeting.
I think it will be May 2016, and it will definitely be in Detroit.
I will give an exact date later.

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Some of the Factors that have drawn wealth and power to NYC may have hurt Philadelphia


But the trend against equality that emerged may now be reversing for Philly, as the gap became too big,

and with Philly's strategic position on in the North Eastern corridor, "arbitrage-like" opportunities (to save money) are becoming apparent


Here's an excerpt from an article which talks about how inequality grew and grew...


Why the Economic Fates of America’s Cities Diverged

Places like St. Louis and New York City were once similarly prosperous. Then, 30 years ago, the United States turned its back on the policies that had been encouraging parity.


...Eventually, further financial deregulation, combined with enormous subsidies and bailouts for banks that had become “too big to fail,” led to the eclipse of even once strong regional money centers such as Philadelphia and St. Louis by a handful of elite cities such as New York and London, bringing the geography of modern finance full circle back to the patterns prevailing in the Gilded Age.

. . .

For both of these reasons, success in this sector now increasingly requires being physically located where large concentrations of incumbents are seeking “innovation through acquisition,” and where there are supporting phalanxes of highly specialized legal and financial wheeler-dealers. Back in the 1970s, a young entrepreneur like Bill Gates was able to grow a new high-tech firm into a Fortune 500 company in his hometown of Seattle, which at the time was little better off than Detroit and Cleveland—a depopulating, worn-out manufacturing city, labeled by The Economist as “the city of despair”—are today.


Now, a young entrepreneur as smart and ambitious as the young Gates is most likely aiming to sell his company to a high-tech goliath—or will have to settle for doing so. Sure, high-tech entrepreneurs still emerge in the hinterland, and often start promising companies there. But to succeed they need to cash out, which means that they typically need to go where they’ll be in the deal flow of patent trading and mergers and acquisition, which means an already-established hub of high-tech “innovation” like Silicon Valley, or, ironically, today’s Seattle.


They may also need to maintain a Washington office, the better to protect and expand the policies that have allowed the concentration of wealth and power in a few imperial cities, including intellectual-property protections, minimal antitrust enforcement, and financial regulations that benefit behemoth banks. The spectacular rise in the affluence of the D.C. metro area since the 1970s belies the idea that “deregulation” has brought a triumph of open and competitive markets. Instead, it is the result of a boom in what libertarians in other contexts like to call “rent seeking,” or the enrichment of a few through the manipulation of government and the cornering of markets.

Inequality, an issue politicians talked about hesitantly, if at all, a decade ago, is now a central focus of candidates in both parties. The terms of the debate, however, are about individuals and classes: the elite versus the middle, the 1 percent versus the 99 percent. That’s fair enough. But the language currently used to describe inequality doesn’t capture the way it is manifesting geographically. Growing inequality between and among regions and metro areas is obvious. But it is almost completely absent from the current political conversation. This absence would have been unfathomable to earlier generations of Americans; for most of this country’s history, equalizing opportunity among different parts of the country was at the center of politics. The resulting policies led to the greatest mass prosperity in human history. Yet somehow, about 30 years ago, America forgot its own history.



> MORE: http://www.theatlantic.com/business/archive/2015/11/cities-economic-fates-diverge/417372/?utm_source=nextdraft&utm_medium=email

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  • 2 weeks later...

Prices for average Home in Philadelphia



Chart : source


Estimated Prices for average Home in Philadelphia


> Dec2015: $149,900 - $118/sf : Realtor.com


Qtr / Year : Ave.Price : /SqFt : =sqft. : (see Post#46)
Dec. 2010 : $125,000 : $115/sf : 1,087 :
Dec. 2011 : $139,000 : $129/sf : 1,078 :
Dec. 2012 : $140,000 : $130/sf : 1,066 :
Dec. 2013 : $141,000 : $130/sf : 1,085 :
Q1 - 2014 : $142,000 : $131/sf : 1,084 :
Q2 - 2014 : $144,000 : $142/sf : 1,014 :
Q3 - 2014 : $155,000 : $144/sf : 1,083 // $158 / 144 : 1,097
Q4 - 2014 : $139,000 : $128/sf : 1,081 // $142 / 123 : 1,154
Q1 - 2015 : $130,000 : $125/sf : 1,040 // $133 / 120 : 1,108
Q2 - 2015 : $145,000 : $130/sf : 1,115 // $145 / 130 : 1,115
Q3 - 2015 : $155,000?

Q4 - 2015 : $150,000?




> source

Monthly-per Charts

Year- : Jan.- : Feb. : Mar. : Apr. : May : Jun. / July : Aug : Sep : Oct. : Nov : Dec :
2014 : $000 : 000 : 000 : $000 : 000 : 000 / $000 : 155 : 158 : $155 : 150 : 142 :
2015 : $140 : 138 : 133 : $130 : 135 : 145 / $150 : 155 : 000 : $000 : 000 : 000 :
Qtr-s : ---q1 $137.0 ---- : ---q2 $136.7 ---- / ---q3: $152.+ ??


Per SqFt
Year- : Jan.- : Feb. : Mar. : Apr. : May : Jun. / July : Aug. : Sep. : Oct. : Nov : Dec :
2014 : $000 : 000 : 000 : $000 : 000 : 000 / $000 : 141 : 144 : $140 : 131 : 123 :
2015 : $122 : 123 : 120 : $119 : 123 : 130 / $133 : 137 : 000 : $000 : 000 : 000 :
Qtr-s : --q1: $121.7 --- : --q2: $129.0 --- /--q3: $135.+ ??- :
Size--: --q1: 1,126. ---- : --q2: 1,060. ---- /--q3: 1,126.+ ??- :

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Why SEPTA Ridership Isn’t Higher

This new 40-story tower proposed for South Broad St in Philadelphia is going to be awesome, and one of the main reasons it’s going to be awesome is that it’ll grow ridership on the Broad Street subway line. The more people who can live along the Broad Street line the better for the performance of our transit system.


Carl Dranoff’s tower will have to get approval from City Council to rezone this parcel as CMX-5, from CMX-4, which would allow him to build taller and use more of the lot. But I wonder why everything along Broad Street and Market isn’t already zoned CMX-5.


The city’s political class claims to be very concerned about SEPTA’s fortunes lately, with the state transportation bill in the news, but I see zero City Council members showing interest in doing their part to help grow ridership on our rail transit system by allowing taller buildings along rail routes.

Here’s the zoning map. The square at the center is City Hall, and the streets dividing the rest of the city into four quandrants are Broad St (north and south) and Market St (east and west). The maroon colors are parcels zoned CMX-5 and CMX-4, the densest allowable zoning in the city:




Sandy Smith wants to know why more Philadelphians don’t use the transit system, but is it such a mystery?


See how the maroon squares along Broad and Market start to peter out as they get further away from the center? You need to blame those yellow, orange, and red squares for lower-than-ideal transit ridership. The yellow squares say people are only allowed to build short-ish row-houses there, along the expensive heavy rail line, and that limits how many people can live close to the subway. If we want decent subway mode share in this city, City Council needs to color in a thick buffer of maroon squares on both sides of Broad and Market Sts, and up along the Delaware River into the river wards.


This should be a prerequisite for any talk of extending the Broad Street line south to the Navy Yard. Ten thousand people work at the Navy Yard, but the subway doesn’t go down that far, so lots of people drive.


> http://keystonepolitics.com/2013/12/septa-ridership-isnt-higher/

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U.S. Existing Home Sales Plunge in November
National Association of Realtors attributes 10.5% drop to new federal rules for mortgage forms


Dec. 22, 2015

WASHINGTON—Sales of previously owned homes plummeted in November as delays caused by new mortgage red-tape and a dwindling supply of residences on the market pushed down sales to a level not seen since April 2014.



Seasonal slowdown (prior to winter) - and a fear of higher rates perhaps?

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Real Estate market articles


Philadelphia Apartment Market Expands
Wall Street Journal-Dec 15, 2015
Philadelphia has an apartment shortage—and big developers are starting ... housing in a market where apartment construction still lags behind ...
Apartment market looks strong
Philly.com-Dec 20, 2015
Despite an October hiccup in multifamily-housing construction starts, ... in a dependable Philadelphia market" is how real estate investment ...

Prices flat, but total sales surge in Philly-area housing market
PhillyVoice.com-Nov 30, 2015
Home prices in the greater Philadelphia region may have stayed flat this summer, but the total number of sales increased, showing that the ...
Philadelphia has an apartment shortage—and big developers are starting to fill the void.
Houston-based property giant Hines is teaming up with Goldenberg Group, a Philadelphia developer on a 322-apartment tower planned ar 1213 Walnut St in the hip Midtown Village section of Philadelphia's Center City neighborhood

1213 Walnut St - Two different renderings? Completion expected in 2017, a $125 mn project ... more
. . .

In Philadelphia, construction, renovation, and acquisition of multifamily rental units continues.

Eli Rosen, senior vice president of Gebroe-Hammer Associates, recently was involved in arranging more than $60 million in sales encompassing more than 350 units throughout the city's central and western neighborhoods.




These included Garden Court Plaza*, a 146-unit, 13-story 1920s-era building at 47th and Pine Streets, and Roosevelt Apartments at 2216-2222 Walnut St.


*(Post Brothers paid $250 million, a hefty $1.73 million per apartment, as neighborhood residents "are bracing for big changes", like rental increases)


In 2015 thus far, Rosen and managing director Joseph Brecher brokered sales totaling $128 million and 1,250 units.

"Investor appetite has been insatiable, and the tenant base of young professionals continues to absorb new product metro-wide at a historic pace," Rosen said.

Investor activity "ignites in a dependable Philadelphia market" is how real estate investment services firm Marcus & Millichap put it.

What makes this market so dependable?

"Healthy economic indicators are driving growth in the Philadelphia economy," said Marcus & Millichap's fourth-quarter outlook.

The local unemployment rate has reached its lowest level since the recession, the firm's report said, pushed down by corporate expansion. The Philadelphia workforce will grow 1.2 percent in 2015, or by 35,000 new positions, it added.

Last year, this region added 45,400 jobs to the market, led by gains in the education and health-services sector, Marcus & Millichap noted, and the growth encouraged developers to accelerate the pace of construction, with builders concentrating on the high-rent Center City market.

. . .

Developers focused attention on Center City, where the average rent is more than $700 above the region's average, Marcus & Millichap said. One-third of all annual completions came to market there.

Philadelphia builders have more than 7,100 rentals currently under construction, 1,300 of which are scheduled for delivery in the fourth quarter.

The average effective rent climbed 2.9 percent year over year, to $1,189 a month, in the third quarter, Marcus & Millichap said.

Center City residents pay $2,070 a month, on average, nearly 55 percent more than the next most expensive submarket.

. .

Analyzing the real estate market in Philadelphia and 10 surrounding counties for Quarter 3 of 2015, Gillen found that home values in the region increased by a "statistically negligible" 0.3 percent. In comparison, the quarter before home prices had increased by 5.8 percent.

However, the volume of total home sales was at its highest level since 2008. There were 20,351 sales in the region over the summer, of which 4,655 were in Philadelphia. Compare that to 18,335 in sales a year earlier.

In fact, Gillen thinks that the fact that average home prices aren't going up "should be taken as positive news, as the housing recovery has become more equitable and widespread."

In other words, there were more sales in lower-priced neighborhoods. That trend brings down average house prices, but it means that recovery isn't limited to elite, expensive enclaves.

"The fact that sales surged but prices remained flat in Q3 is attributable to a broadening of the housing market’s recovery that is now including more lower-priced segments of the market and more purchases by modest-income homebuyers," wrote Gillen.
. . .
House prices in the city continued to grow faster than the suburbs, bucking a trend that had persisted since the '80s. Philadelphia's housing index lagged behind the surrounding region from 1986 to 2014, but since then, the city has been beating the 'burbs when it comes to price appreciation.

Overall, prices in the region have gained back a little less than half of the value they lost since the peak of the housing bubble. Prices plummeted 23 percent when the bubble burst, but the region has gotten around 10 of those percentage points back.

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Philadelphia is safer than many cities


The Top 5 - Most Dangerous* Cities in America
# : (M#) :
1. : (02) : Camden, NJ
2. : (04) : Chester, PA
3. : (07) : Detroit, MI
4. : (05) : Saginaw, MI
5. : (27) : Oakland, CA

"the 100 most dangerous cities in America with 25,000 or more people, based on the number of violent crimes per 1,000 residents. Violent crimes include murder, rape, armed robbery, and aggravated assault."
M# above is the rank of the city within the Top 30 Murder Rate, worst cities


"in the past year Camden has seen 1,895 violent crimes (murder, rape, robbery, and aggravated assault). While these numbers are much less than Philadelphia’s next door (17,088 violent crimes), factoring in population size is what pushes Camden to the top of the list."


It isn't all bad news:

+ "That murder rates in major U.S. cities are on the decline is popular knowledge. New York City is often held up as the example: in 1990, NYC had more than two thousand homicides, by 2014 that number was down to just over 300. It’s a common trend of many cities, including Philadelphia, Los Angeles, and Dallas, among others."

> http://www.neighborhoodscout.com/top-lists/highest-murder-rate-cities/


+ "U.S. crime rates peaked in the 90’s, at a time when most analysts expected the rate to keep climbing at a steady rate, rendering our biggest cities nearly unlivable. However, crime rates began to fall mid-decade — the reasons for which are still hotly debated today. Was it a rise in abortions of unwanted children 20 years earlier, as suggested by some research, increasing incarceration rates, or police reform? Some even suggest that video games and the internet factor in — increasingly popular forms of entertainment that keep kids from playing outside and possibly getting into trouble"

> http://www.neighborhoodscout.com/neighborhoods/crime-rates/top100safest/


Here are the Top 100 most dangerous places: http://www.neighborhoodscout.com/neighborhoods/crime-rates/top100dangerous/


Philadelphia (at #54) comes behind:

#9 : Wilmington, DE

18 : Baltimore, MD

29 : Washington, DC

(These are in the Northeast Corridor, where the fast trains will travel)


There are surprises on the Top 100 Danger list:

What is equally interesting is which cities did not make the list: Boston, Chicago, Los Angeles and New York are all absent, despite being the centers for some of the largest urban areas in the nation.

But look who did make the list: Minneapolis, Oklahoma City, Indianapolis, Kansas City, Milwaukee and Buffalo. These are cities in America’s heartland and Great Lakes regions.

This isn’t to say that the cities you’d expect aren’t here: besides Detroit at 3, St. Louis is 14, Cleveland 16, Baltimore 18, and Washington DC comes in at 29. Miami is all the way at 46, Philadelphia ranks 54th most dangerous, and Houston is at 68.



> source: http://www.neighborhoodscout.com/top-lists/highest-murder-rate-cities/

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