Everything You Know About Philly Real Estate Is Wrong

The optimism regarding continued growth in Center City is widespread — and heartening. “I think we’re in the hands of a great mayor,” Domb says. “And that’s huge for the city. For the past eight years, we’ve had no job growth, and in spite of it managed to grow. Imagine if we can bring jobs into the community — and I think we can, now. You gotta put your money on Mayor Nutter, that he’s going to bring people and business into the city.”

What it may mean to you: More shopping, restaurants and arts in Center City — and, down the road, more jobs, fewer cars as people adapt to a more walkable lifestyle, and better city schools as Philly strives to keep all its new taxpayers. We hope.


PERCEPTION 9.
So many condos, so fast, is going to mean the same oversupply we’ve seen with traditional homes.

The Philly reality: When it comes to condos, “Not only has Philly not overbuilt,” says Tom Scannapieco, president of Scannapieco Development, “but for a long time, I think Philly under-built. The city is catching up now, and navigating the cycle better than any city of our size.” Furthermore, says Sweet, overbuilding would be more of a concern if conversion projects weren’t an option. But the simple fact that condos can — if need be — be rented as apartments, should there be a surfeit of unsalable properties on the market, is a safety net. Nobody appears to be too concerned about current supply overshooting the demand for condos, especially considering that a new generation of upwardly mobile Gen Y’ers is entering the urban market — with money.

“I know the existing condo market has very little inventory available,” Domb says. “At the Wanamaker House [at 20th and Walnut], there are 333 residences. Three are available right now.”

But what about the fact that new condos are taking about twice as long to sell as they did two years ago? “People are taking longer to buy now,” Iezzi says. “They have more choice, and they’re looking around. But they are eventually buying. The market also appears slower because we’re talking about a lot of million-dollar condos, and Philly’s not used to that.”

Agreed, says Sweet. “The current sluggishness in the condo market in Center City is attributable to developers focusing on the million-dollar buyer, rather than on the larger pool of people looking for homes in the $350,000 to $650,000 range.”

But we’d all better get used to the million-dollar mark: “That’s going to be the new magic number,” Iezzi says. And what’s more: “The bottom will not hit with condos, I don’t think. Because they’re working with all the best places — Rittenhouse Square, Washington Square, the waterfront.”