Linda K. Harris
PHILADELPHIA (February 16, 2016) – In 2015, for the third year in a row, more than 1,500 housing units were brought to market downtown, while rents and housing prices continued to rise and more people continued to move into Greater Center City, where the population has increased by 17% since 2000, according to the new CCD/CPDC report, Sustaining Demand for Downtown Housing.
As Philadelphia recovered from the recession, a total of 4,047 apartment units were brought to market in the past three years in Greater Center City, with 24% of that new supply (986 units) completed in 2015. Asking rates rose fastest in Core Center City, appreciating by 5% on average, while rising 1.5% in the Greater Center City neighborhoods that extend north to Girard Avenue and south to Tasker Street.
In 2015, 3,220 new and existing homes changed hands in brokered sales in Greater Center City, a 16% increase over 2014. Three quarters of these sales were in the Extended Center City neighborhoods, with 52% of the total number of transactions occurring between Pine and Tasker Streets. Average sale prices in Greater Center City rose a modest 1% to $430,000, with number of days on market declining by 5% to 66 days. The extended neighborhoods, where prices in 2015 were, on average, 38% less-expensive than the core, continue to offer affordable options for younger and moderate-income households.
Currently 5,833 units (78% of which are rental) are now under construction and many more are proposed. Macro-economic, cultural and demographic factors are favoring Philadelphia, as national preferences for live-work, transit-oriented settings have benefitted all vibrant city centers. The move to rental options is also a strong national, urban trend.
However, there are some cautions. A straight-line, forward projection of the average residential growth rate since 2010 suggests an increase of 3,897 more households in the next three years – 1,299 per year, as compared to an average of 1,944 new units per year planned for completion between 2016 and 2018. That means we need some combination of households who do not leave Center City or new households that move here, that adds up to about 650 to ensure demand keeps pace with supply.
In 2000, there were approximately 50,000 people ages 20 to 34 in Greater Center City. Had they all stayed in place, we would have expected to see 50,000 35 to 49 year olds in 2014. Instead, there were only 33,000, suggesting that a third, about 17,000, moved elsewhere, as the promise of more jobs and affordable, quality schools continued to lure people away from Philadelphia.
Despite all the justified focus on millennials, the number of Philadelphians moving to counties surrounding the city still outnumbered the number of residents of those counties moving into the city. For the region as a whole, the 2010-2014 data show 21,000 moving into Philadelphia but 28,000 moving out to suburbs — a net loss of 7,000 per year. Philadelphia’s population increase during these years is attributable to an increase in domestic births that surpass the number of deaths, an upsurge in new immigrants to the city and the impressive growth downtown.
But, the report notes that within five years, the millennial surge begins to ebb. To sustain success, Philadelphia will have to grow more jobs for everyone, retain a greater share of college graduates who come here from other regions, and keep more families in the city with well-funded, affordable, quality schools.
To download the report, please click here.
The Center City District, a private-sector organization dedicated to making Center City Philadelphia clean, safe and attractive, is committed to maintaining Center City’s competitive edge as a regional employment center, a quality place to live, and a premier regional destination for dining, shopping and cultural attractions. Find us at www.centercityphila.org and on Facebook and Twitter.
The Central Philadelphia Development Corporation is a membership organization of more than 100 leading businesses with a stake in the future of Center City and the region. Its purpose is to strengthen the vitality and competitiveness of Center City Philadelphia as the vibrant 24–hour hub of the Greater Philadelphia region, through planning, research and advocacy.