A High For Housing

Philadelphia's single-family-home market just had its best quarter since the housing bubble burst in mid-2007, with sales volume surging in every part of the city during July, August, and September.

Third-quarter sales totaled 4,655, 18 percent more than in the same period last year and 11 percent higher than in April, May, and June of this year, said Kevin Gillen, chief economist for Meyers Research and senior research fellow at Drexel University's Lindy Institute for Urban Innovation.

The numbers - obtained from the Philadelphia Recorder of Deeds and excluding condos, which are defined as multifamily housing - show "our recovery not only has traction, but serious momentum as well," Gillen said.

(Sales figures for the eight-county region will not be available for four to six weeks.)

Median prices rose 7.05 percent, from $132,650 to $142,000, citywide over the third quarter of 2014, with every neighborhood having an uptick, he said.

"Home sales are finally becoming much more democratically and equitably distributed across the city," Gillen said. "Low-income and first-time home buyers are an increasing share of all home sales."

At the same time, there were 34 $1 million-or-higher single-family-home sales, eight more than in 2008, the previous peak year.

The $4.45 million sale of 2036 Delancey Place in late September to Farid Naib, senior operating adviser of LLR Partners, broke the previous record of $4.2 million that developer Bart Blatstein paid for the McIlhenny Mansion at 1914 Rittenhouse Square in 2013, Gillen said.

In North Philadelphia, South Philadelphia, and upper and lower Northeast Philadelphia, total third-quarter sales were up by double digits from a year ago.

Though this is "mathematically putting a headwind on the median price and the house price index, it indicates that the recovery is finally becoming more widespread across neighborhoods, which is a good thing," Gillen said.

Home values rose 1.3 percent quarter to quarter and 6.2 percent year over year, he said, continuing to erase losses from 2007 to the market's bottom in late 2012.

Chris Somers of Re/Max Access in Northern Liberties said buyer demand had remained constant, especially in hot neighborhoods such as Fishtown, South Kensington, and Passyunk Square, with prices in the $200,000-$400,000 range and the majority of buyers first-timers.

"Because the spring market was one of the best in a decade, with many neighborhoods having significant appreciation, it only makes sense for prices to start to stabilize for the time being, even though the volume has remained steady but not gobbling up all the inventory," Somers said. "As in economics, it all gets back to supply and demand."

Mike McCann of Berkshire Hathaway Home Services Fox & Roach Realtors said, "This [third quarter] has been the best I have seen in my 29 years in real estate in Center City and the surrounding neighborhoods, from entry-level buyers to move-up buyers to empty-nesters."

In the third quarter, "consumers remained confident, interest rates were low, and as long as a home was priced right and was market-ready, it was a winning combination," said Joanne Davidow, vice president of BHHS Fox & Roach.

Mark Wade, also of BHHS Fox & Roach, said he foresaw no change in the home-buying equation unless young buyers move up to bigger houses in Philadelphia "rather than move to the suburbs" when their children reach school age.

Millennials are house-hunting as "they analyze the cost of renting is higher than the after-tax cost benefit of buying," said Allan Domb of Allan Domb Real Estate.

A shortage of quality for-sale inventory persists, McCann said, because "so many good homes sell immediately when they hit the market."

In the third quarter, concerns that interest rates might rise, as well as "the end of less stringent lending rules," pushed fence-sitters into the market, said Christopher Artur of Artur Realty in Mayfair.

Prices rose "at a much higher rate for the newly rehabbed homes in Northeast Philadelphia, to the point of being ridiculous in many cases," Artur said. Continued involvement of investors "does still contribute to the pricing equation," he noted.

For Mickey Pascarella of Keller Williams Real Estate, the quarter "was a nice continuation of a very confident year."

"My clients experienced the market glow created by low interest rates and rising prices," Pascarella said. "After the crash, they sure deserved it."

September, dominated by the visit of Pope Francis, was slower than usual, said Jeff Block, but 2015 has been his best year since his debut as a Realtor in 2001. The numbers, he said, reflected settlements for houses put under contract in the second quarter.

Paul Walsh, managing partner of Elfant Wissahickon Realtors in Chestnut Hill, said that his agents handle houses from $100,000 to "multimillions," and that year-over-year sales were up 10 percent across the entire range.

aheavens@phillynews.com

215-854-2472 @alheavens

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