The Top Real Estate Stories of 2018
One tall building, one hot market begins to cool, one dodged bullet and more.
What developments in real estate and development were the biggest ones this year? Here are my picks for the top real estate stories of 2018:
Amazon passes on Philadelphia. As in the other 18 metros Amazon was considering for its ballyhooed second headquarters, some tears were shed here in Philadelphia when the retail and tech behemoth opted to split the headquarters between two of the usual suspects, New York and Washington’s Northern Virginia suburbs. But the caterwauling was muted, and some even argued that the city had dodged a bullet when it failed to land Amazon. After all, not all of the 50,000 anticipated new jobs would go to people already living here, and the newcomers were likely to bid up housing even more than it has been in the past few years. One other positive outcome from the snub: Civic and business leaders are increasingly talking about growing 50,000 jobs here rather than luring them from somewhere else.
An historic seller’s market in Philly.How hot was the real estate market here? This hot: in the early part of this year, stories circulated of homeowners holding off on putting their current homes on the market out of fear that they couldn’t afford their next one. Inventories of houses for sale dropped to lows not seen before this past spring, and bidding wars broke out for properties. But while house prices continued to climb through the year, interest rate hikes have also pushed mortgage rates up after hovering around 3 percent for several years. This is dampening demand for new homes, but it also offer buyers hope that the market will cool and prices moderate in the coming year.
Rittenhouse Square, complete once again at last. Actually, it’s not complete yet, but the filling in of the empty hole at the square’s northwest corner is now underway. Southern Land Company broke ground this summer on The Laurel, a mixed rental/condo building that will be the city’s tallest residential structure when it is completed late next year. Pre-sales of the condos are coming along nicely, and while it’s not been announced, rumors circulate that its 60th-floor penthouse could sell for a good bit more than the $17.85 million Tom Scannapieco got for the penthouse at 500 Walnut.
The tax abatement survives, but for how long? Properties built using the 10-year tax abatement have been going onto the property tax rolls for at least a decade now, and the taxes have given the city treasury a boost. But with new house construction proceeding at a steady clip, some City Council members have pushed bills to end the abatement program. The most recent attempt to repeal the abatement ended with a compromise with Mayor Jim Kenney that left it in place but steered the revenue from expiring abatements to the construction of affordable housing. This may have quieted the argument for now, but it hasn’t ended it.
The mixed-use suburban downtown makes a comeback. Actually, the suburban downtown hasn’t really disappeared, but the ones around Philadelphia have been enjoying a rise in fortunes over the last year or two. Boroughs and townships with decent Main Streets have been luring new investment in the form of multifamily residential structures that appeal to younger residents. One Ardmore Place in Ardmore is nearing completion, the NoBa development in Bala is well along, and Equus Capital Partners’ new apartment building in the heart of Lansdale should be welcoming its first tenants right about now. Meanwhile, apartments and townhouses continue to sprout at the region’s first master-planned suburban “downtown,” the Village at Valley Forge.