On the House: Historical perspective on market

Back then, the existing-home market, especially in the city, was in really rough shape. Mike McCann, an associate broker at Prudential Fox & Roach, reminds me that median sale prices fell 20 percent to 40 percent from the market's previous peak in 1987 and didn't rise again until 1997, when they returned to 1987 levels.

Center City condo king Allan Domb says the same happened in his market niche. Heck of a lot different from today's 6 percent decline.

Still, new-home prices remained fairly stable in the region. Mortgage rates remained well above 7 percent, and often exceeded 8 percent, in those years, but people continued to buy new homes. If they couldn't afford to buy a single-family, they settled on a less-expensive townhouse until they could trade up.

That's what you saw happening after 1998 until the subprime crisis of August 2007, when the region was sucked into the same vacuum as the rest of the country, though not as deeply into the bag as California and Florida.

During the 1990s, home builders here rarely raised prices, swallowing increased material costs and reducing their profit margins to offer affordability. They began dipping their toes into the active-adult market, while other areas were already up to their necks in it.

As a result, active-adult remains one of the stronger market segments in this region - after 15 years, builders are only up to their waists in product.

Though I talk about the Philadelphia market, or the eight counties in it, this region is made up of dozens, and probably hundreds, of submarkets. Each of those submarkets has its own set of variables, has suffered (or not) in the downturn to a different degree, and thus should be considered on its own merits.

Referring to "the Philadelphia region" simply allows me to make comparisons with other, similar regions with the same number of submarkets, or more. Let's look at a sample of submarkets, with year-over-year third-quarter data provided by Zillow.com:

Academy Gardens in Northeast Philadelphia had a median price of $196,000; prices were 1.9 percent higher than the second quarter and 0.3 percent above the third quarter 2007, with a five-year annualized rise of 7.1 percent.

East Falls: median price, $229,111; 4.3 percent quarterly increase; 5.5 percent higher year over year, with a 9.2 percent rise over five years.

Maple Shade: median price $210,179; down 2 percent quarterly; up 2.4 percent year over year, up 9.3 percent over five years.

Chester: median price $63,229; down 2.8 percent quarterly; down 1.6 percent year over year, but up 9.2 percent over five years.

When it comes to real estate, we are not one nation. How each market behaves is a very, very local thing.

On the House:

Inquirer real estate writer Alan J. Heavens is the author of "Remodeling On the Money" (Kaplan Publishing). His home- improvement columns appear Fridays in Home & Design.