PHI 2014 Q1

ECONSULT SOLUTIONS, INC. PHILADELPHIA HOUSING INDEX

PHI 2014 Q1

Price per Square Foot Low

High

Quarterly Index …………………………………………………………………………………1 Sales by Price per Square Foot ….……………………………………………………………2 Sales Volume by Price Range …….………………………………………………………….3 Statistics by District ….……………………………………………………………….…………4 Quarterly Index by Subregion …………………………………………………………..……5 Local Change Since 2012 Q1 ……..………………………………………………………….6 Background and Notes ……….……………………………………………………………....7

Econsult Solutions, Inc. | 1435 Walnut Street, Ste. 300 | Philadelphia, PA 19102 215-717-2777 | econsultsolutions.com

ECONSULT SOLUTIONS, INC. PHILADELPHIA HOUSING INDEX - 2014 Q1 QUARTERLY INDEX

Index Quarterly Change Number of Sales Median Sale Price

157.3 +1.1% 2,774 $115,000

Philadelphia and Comparative House Price Indices 2003 – 2014 Q1 (2003 = 100) 210

190

170

150

130

110

90

2003

2004

2005

2006

Philadelphia

2007

2008

2009

2010

Philadelphia Metro Area

Single-family house prices grew by 1.1% in in the first quarter of 2014, and were up 3.5% from one year ago. This reflects a continuation of a mixed market that is up in one quarter and down in the next, however the longer-run picture is one of steady growth. Overall, there were 2,774 arms-length sales of single family homes this quarter, which is down 19.1 percent from the previous quarter, and down 4.5 percent from the same quarter a year ago. The declines in sales reflects a national housing market trend of slowed home sales in this quarter. This is likely due to a combination of higher mortgage rates, bad winter weather, and gradually rising prices. Econsult Solutions, Inc. | 1435 Walnut Street, Ste. 300 | Philadelphia, PA 19102 215-717-2777 | econsultsolutions.com

2011

2012

2013

2014

National Average

Index Percent Change, 2011 -2014 Q1 10% 5% 0% -5% -10%

2011

2012

2013

2014

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ECONSULT SOLUTIONS, INC. PHILADELPHIA HOUSING INDEX - 2014 Q1 SALES BY PRICE PER SQUARE FOOT

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Each dot on the map represents one sale. The color indicates the price per square foot, following the classification shown on the chart below.

Count of Sales by Price per Square Foot $25 or Less $26 to $50

282 280 571

$51 to $100

781

$101 to $150 $150 to $200

401

Median price per square foot was $103. 437 There were 437 sales in the most expensive More than $200 category with prices over $200 per square foot, and 258 in the least expensive category of $25 per square foot or less. Median Price Per Square Foot Number of Sales


$103 2,774

ECONSULT SOLUTIONS, INC. PHILADELPHIA HOUSING INDEX - 2014 Q1 SALES VOLUME BY PRICE RANGE

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Volume of Sales by Price Range Price Range

2014 Q1

$25,000 or less

348

$25,001 - $50,000

358

$50,001 - $100,000

561

$100,001 - $150,000

504

$150,001 - $200,000

361

$200,001 - $300,000

322

$300,001 - $500,000

209

$500,001 - $750,000

67

$750,001 - $999,999

17

$1,000,000 or More

27

Total

2,774

Volume of home sales was down this quarter (to 2,774 from 3,427 last quarter), which follows a decline from the previous quarter. This is down 4.5 percent from a year ago, indicating that most of the decline was a result of seasonal factors. The median sale price of $115,000 represents a 4.2 percent decrease from the previous quarter, but is up 2.2 percent from a year ago. Unlike the index value, the median price is not quality or seasonally adjusted. Median Sales Price (thousands) $150 $125 $100 $75 $50

$115 2003

2005

2008

2011

2014

9,000

40

8,000

35

7,000

30

6,000

25

5,000

20

4,000

15

3,000 2,000

10

1,000

5

0

2003

2005

Total Sales

2008

2011

Sales $1 Million or More


2014

0

Sales $1 Million or More

Total Sales

Total Sales Volume and Volume of Sales Greater than $1 Million

ECONSULT SOLUTIONS, INC. PHILADELPHIA HOUSING INDEX - 2014 Q1 STATISTICS BY DISTRICT

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Median

Index

Sales

Median Price per Sq Ft

1 Upper Far Northeast

128.5

79

$134

$220,000

-0.1%

1.8%

2 Lower Far Northeast

149.7

98

$122

$165,750

-1.3%

2.6%

3 Central Northeast

135.3

151

$113

$145,000

-1.2%

-1.3%

4 North Delaware

111.3

178

$78

$99,900

-3.9%

-5.7%

5 Upper Northwest

158.5

171

$81

$145,000

-0.7%

5.4%

6 Upper North

164.4

199

$58

$80,000

-2.2%

2.8%

7 Lower Northeast

128.8

165

$57

$69,500

-1.5%

1.8%

8 Lower Northwest

145.6

133

$137

$200,000

-2.9%

-2.6%

9 North

128.0

170

$24

$25,000

1.9%

3.3%

10 River Wards

232.7

229

$92

$110,000

2.2%

11.4%

11 West Park

186.8

58

$71

$110,000

1.8%

3.5%

12 Lower North

231.6

157

$45

$60,000

1.7%

14.5%

13 West/Southwest

113.7

207

$28

$36,300

0.7%

1.7%

14 University

274.3

41

$128

$230,000

1.9%

21.1%

15 Central

154.9

191

$280

$420,000

-1.1%

5.5%

16 Lower Southwest

168.3

66

$35

$43,500

7.7%

1.9%

17 Combined South

266.8

481

$109

$130,000

0.9%

10.6%

X Citywide

157.3

2,774

$103

$115,000

1.1%

3.5%

District

Sale Price

Quarterly Change

Annual Change

*Districts are identical to Philadelphia City Planning Districts except where noted with an asterisk. See Definitions and Notes on page 8 for details.


ECONSULT SOLUTIONS, INC. PHILADELPHIA HOUSING INDEX - 2014 Q1 QUARTERLY INDEX BY SUBREGION

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Subregion House Price Indices 2000 – 2014 Q1 (2003 = 100) 260 240 220 200 180 160 140 120 100

2003

2004

2005

Far Northeast Northwest West/Southwest

2006

2007

2008

2009

2010

2011

2012

Northeast Lower North/River South

Analysis at the District level provides a refined view of housing market trends. Here, these trends are aggregated into subregions to summarize broader market trends. The subregions immediately surrounding Central/University went up, however the center itself went down. Beyond that, all other subregions showed declines in the past quarter. This result shows that the citywide growth this quarter is largely attributable to rising prices and a higher sales volume in those areas surrounding the center.

2013

2014

North Central/University Citywide -0.7% -1.9%

-1.9% -1.1%

+2.8%

+2.2% -1.1% +0.9%

Color of Subregion on chart corresponds to color of Subregions on map. Quarterly changes noted on map.


ECONSULT SOLUTIONS, INC. PHILADELPHIA HOUSING INDEX - 2014 Q1 LOCAL CHANGE IN HOME PRICE SINCE 2012 Q1

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See note on Page 7 for technical details

The price indices on page 2 show that, on a citywide level, the recovery in house prices began in Q1 of 2012. The subregion indices on page 5 make evident that the growth has not been uniform across the City. Further, those aggregated measures still mask the variation that occurs on a block-by-block basis. To take closer look at where exactly the growth has been during this citywide recovery period, ESI computed highly localized quality-controlled growth rates in house prices since Q1 2012. The results, mapped in the figure above, show that the price changes have varied significantly. Prices have generally grown faster in the central areas and those immediately surrounding, including Center City, Fairmount, and the upper part of South Philadelphia. Parts of North Philadelphia and Manayunk have also performed well. West Philadelphia and University City are particularly mixed, with areas of rapid growth alongside areas of declining prices. Importantly, this map does not show which areas have recovered from the bubble, since individual neighborhoods have varying peaks and troughs that may not correspond to citywide recovery period. It should also be noted that the map shows percent change in house price, not the prices themselves. Econsult Solutions, Inc. | 1435 Walnut Street, Ste. 300 | Philadelphia, PA 19102 215-717-2777 | econsultsolutions.com

ECONSULT SOLUTIONS, INC. PHILADELPHIA HOUSING INDEX - 2014 Q1 BACKGROUND AND NOTES

Background and Contact Econsult Solutions, Inc. (ESI) provides the Philadelphia Housing Index (PHI) free of charge to the public. Thanks to the Office of Property Assessment for providing some of the data used in our analysis. Sales are arms-length transactions of single-family homes only. The price indexes are estimated by Econsult Solutions, Inc. using a quality controlled measure of average sale appreciation using hedonic regression analysis. Questions and press inquiries should be directed to Econsult Solutions, Inc. President Richard P. Voith at [email protected]

Notes Cover: Map displays interpolated (inverse-distance weighted) cost surface based on price per square foot of sales. Lower values of price per square foot are deep blue; higher values are red; yellow and green shades are in the middle. The image is provided for illustrative purposes only and does not represent predictions of home values. Page 1: National and Philadelphia Metro indexes are from the Seasonally Adjusted Purchase Only Series from the Federal Housing Finance Agency. Philadelphia Metro refers to the Pennsylvania Division of the Metropolitan Statistical Area, which includes the Philadelphia, Bucks, Chester, Delaware, and Montgomery counties. The Federal and Philadelphia Metro indexes are one quarter behind our Philadelphia Index. Pages 4 and 5: Econsult Solutions, Inc. Districts are identical to those used by the Philadelphia City Planning Commission (PCPC) except: PCPC’s “Lower South” is included in “South”; University City is carved out from PCPC’s “University/SouthWest”, and the remaining Southwest is combined with West to form “West/Southwest”. Pages 4 and 6: District and Subregion indexes are smoothed to reduce volatility and capture underlying market trends. The smoothing means that overall district and subregion prices tend to reflect overall citywide price changes with a slight lag. Page 6: For ease of presentation, Districts are further aggregated into “Subregions,” as shown on the map. Page 7: We overlaid a grid of points spaced one quarter mile apart, and then ran a local regression for each grid point using our database of Philadelphia home sales from 2012 through the current period. Local regression allows micro-spatial estimates of quality controlled appreciation by giving each observation a weight that is determined by how far it is from the particular grid point. Farther away sales have less weight, and closer sales have more weight.


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