Morning Headlines: Could Job Weakness Drag Down Philly’s Real Estate Boom?
Despite recent reports that show home sales in Philadelphia are rising at the fastest pace in three years, it’s not all tea and crumpets for the city. In his essay for the Philadelphia Business Journal, Glenn Blumenfeld of Tactix Real Estate Advisors lays out the not-so-rosy picture happening within the Philadelphia market based on statistics from Real Share’s “State of the Market” conference.
For starters, job growth in other metros such as Boston, D.C., and New York have risen by double digits since the 1970s. Philly’s is down 25 percent during that period and the unemployment rate (6.2 percent) is “significantly higher” than other cities–not good.
Blumenfeld mentions that even though Comcast and FMC have committed to office towers in Center City, “almost all of our neighboring suburbs have gained substantial jobs as companies sought out more hospitable places to establish and grow their businesses.” What’s more, notes Blumenfeld, “For every worker in Center City Philadelphia, there are 0.7 jobs. For every worker in the suburbs, there are 1.7 jobs. That explains why the reverse commute is getting worse.
So how can Philly turn it around? Aside from more biz-friendly government practices, Blumenfeld believes that the city needs to create a business identity that attracts jobs, much like Houston has been for energy. We’d argue that Philadelphia has hung its collective hat on rapidly becoming the center for Eds and Meds in the region, thanks in large part to an ever-expanding UPenn.
Real Estate: Despite the hype, Philadelphia is not as strong as it seems [Philadelphia Business Journal]
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