Center City household income now in the six figures

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The new Toll Bros. development 410 at Society Hill. The neighborhood has the city's highest average income, according to census data. ( DAVID MAIALETTI / Staff Photographer )

The continued influx of well-heeled young professionals and suburban empty nesters has pushed household income in Center City and many of its adjacent neighborhoods into six-figure territory.

An analysis of census data by Lauren Gilchrist, director of research for JLL in Philadelphia, puts Center City's average household income at $107,000, with some areas - including Society Hill, the waterfront, Rittenhouse Square, and Old City - much higher.

By comparison, the average household income of Philadelphia as a whole was just $54,367 for 2009 to 2013, according to data from the U.S. Census Bureau.

The infusion of wealthier people to Center City and adjacent areas has boosted the numbers of high-end retailers and restaurant, cultural, and entertainment choices, as well as employers seeking educated and motivated workers. This, in turn, draws even more upscale residents to these areas.

Average household income in Society Hill is the highest at $156,630, followed by the waterfront area and Old City, Gilchrist said.

Although the Rittenhouse area and its high-rise condos tend to be the focus of the residential market, household income there is in fourth place in Center City, with $115,638, Gilchrist said.

She attributed the difference to demographics, with young renters flocking to the Rittenhouse area, while "mid- and-late-career professionals have settled in Society Hill and the waterfront."

Marianne Harris, director of sales and marketing for Dranoff Properties, said, "We know anecdotally that most of our apartment residents do have pretty high incomes," because each tenant has to meet income requirements.

Average monthly rent for a one-bedroom apartment in core Center City ranged from $1,365 (Broad Street east to Eighth Street, zip code 19107) to $1,902 (Rittenhouse Square, 19103), Center City District data show.

Fourth-quarter real estate prices put Rittenhouse Square well ahead of the other Center City neighborhoods, however.

The median price in Rittenhouse in the last three months of 2014, based on 83 sales, was $490,000, while it was $389,000 on 53 transactions in Old City, Society Hill, and the waterfront (19106), according to BHHS Fox & Roach Realtors HomExpert Report.

Those figures include luxury high-rise condos, which accounted for 104 $1 million-plus sales in all of 2014, said Kevin Gillen, chief economist of Meyers Research and senior research fellow at Drexel's Lindy Institute for Urban Innovation.

"Rising house prices do not cause household incomes to rise," he said. "Rather, the influx of relatively higher-income households into these neighborhoods has bid up house prices."

Moreover, the increase in most house prices in core Center City "has been rather modest" because many residents have chosen to rent rather than own," he said.

The neighborhoods with the highest household incomes also are closest to the city's best-paying jobs, reached either by walking from home or taking public transit - bus or subway, Gilchrist said.

Data from the Center City District show that 43.6 percent of Philadelphia's 635,700 jobs are in the central business district and nearby areas.

Chris Somers, owner of Re/Max Access, in Northern Liberties, whose sales area includes many of these growing communities, said that outside Center City, "incomes drop dramatically, and that, in turn, has a correlation to lower real estate values and/or stagnant or non-appreciating neighborhoods."

BHHS Fox & Roach Realtors agent Mark Wade said people new to Center City tend to buy or rent close to where they work.

"Center City buyers who know the city gravitate to an area they already know," Wade said. "If someone is renting in the Rittenhouse Square area, they restrict their search to that part of town."

"The real percent pop in house prices has been in the neighborhoods surrounding Center City but not in it," Gillen said.

Prices there started from a much lower level than in Center City, he said, adding that "these are the areas where younger households can afford to buy instead of rent, and thus have been doing so."

 


aheavens@phillynews.com

215-854-2472 @alheavens

 

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