Features: The Condo Revolution!
If this age group feels a twinge of remorse over leaving the suburbs, they don’t voice it. Perhaps that’s because “the suburbs aren’t what they used to be,” says architect Michael Ryan. There’s so much traffic and congestion, suburban life has all the hassle of the city, but none of the convenience. “The cities have grown to touch each other,” he notes. “So why not live in the center? That’s what makes the great European cities work: People live in them.”
When Ryan moved out of Philadelphia in 1981, after graduating from Penn, “The core was empty,” as he puts it. He settled on Long Beach Island and designed Shore houses. But in the spring of 2004, he moved back to Center City — first opening a local office for his practice, Michael Ryan Architects, and then buying a second home here. Now, he designs condo spaces for formerly suburban middle-agers. “They can walk to their yoga class,” he jokes. “For empty nesters with the means, it’s a much more pleasant life. It’s the ultimate retirement option.”
Laurie Phillips, a prominent Rittenhouse Square real estate agent who averages $50 million a year in sales, is seeing more suburbanites at her open houses. And she knows what they’re in the market for. “They’re looking forward to getting rid of stuff,” she says. “They’re looking for a lifestyle where they can be carefree.” Having become accustomed to the best features of suburban houses, they want a gourmet kitchen, a luxurious master bath, and walk-in closets. As Jeffrey M. Brown, the developer of 205 Race Street, told me, “They don’t want to be going backwards.” On the contrary, they want everything to be perfect. “Because they’re last-time buyers,” says Phillips, “they want their last time to be right.”
I joined Phillips one quiet Sunday afternoon in August as she conducted open houses for three of her listings on Rittenhouse Square. I wanted to see if any suburban empty nesters showed up, and sure enough, at the small two-bedroom at 1900 Rittenhouse (asking price: $719,000), in walked David Barton, 65, who moved into town from his contemporary in Solebury Township, near Peddler’s Village, a year and a half ago. He’s been renting, and he’s thinking about buying. Also having a look-see was a young couple, Brian and Amy Rosenstein. They both work in the suburbs but have moved into town — they own a condo at 250 South 17th Street. (“Almost every weekend we were driving into the city, and it was becoming a real pain in the butt.”) They were shopping on behalf of an uncle in the suburbs.
At the second listing, a grand three-bedroom in the Barclay (asking price: $2,425,000), an older couple from Unionville popped in; they’re ready to leave their country estate. At the third listing, a two-bedroom at the Rittenhouse (asking price: $1,250,000), in walked a couple in their 50s from Blue Bell who were looking for “a more convenient lifestyle,” which includes, for him, the ability to walk to his job at 20th and Market. They’d be interested in some of the new condos being built, he said — “but we’re also interested in not waiting two or three years.”
Notably, not a single speculator came to call.
Sooner or later, any talk of condo construction prompts the inevitable comparison with Miami. There, the much-publicized boom looks like a real bubble, with investors and speculators accounting for a major share of all condo sales; if no actual residents-to-be step in soon, prices could take a sizable hit. So what’s the speculative share of Philadelphia’s condo market? Pretty small, it seems. According to Kevin C. Gillen, a young economist from Wharton who keeps track of the city’s housing markets, less than 10 percent of all existing condos sold in the past year have changed hands more than once in that time, and — though it’s difficult to track sales activity for units in the planning stage or currently under construction — there’s no substantive evidence that we are anywhere near other cities’ level of speculation.
In this town, Gillen is the mother lode of up-to-date information. He can tell you, for instance, that prices of Center City condos have appreciated by 17 percent in the past year, but the really hot areas are those adjoining Center City — Northern Liberties, the Art Museum and Bella Vista. There, prices have risen 34 percent in the past year.
Gillen uses a price-per-square-foot metric to provide an apples-to-apples measurement of housing stock. Let’s start at the bottom of the market: an up-to-code rowhouse in North Philadelphia. It fetches less than $30 a square foot — or about $37,500 for your typical 1,250-square-foot rowhouse. As you move south, prices move up accordingly. Just across Girard, prices are $60 per square foot — and in Fishtown, they range from $60 to $130. By the time you get south of Fairmount, condos are going for mostly $200 to $300 a square foot. Over in Old City and Society Hill, meanwhile, prices are between $300 and $400 a square foot. And in the Everest of the condo market, Rittenhouse Square, that price starts at $400.
