Philadelphia House Price Indices, 2011 Q1
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PHILADELPHIA HOUSE PRICE INDICES April 25, 2011 Kevin C. Gillen, PhD [email protected] Disclaimers and Acknowledgments: Econsult Corporation provides these house prices indices free of charge to the public. The indices are produced by Econsult Vice President Kevin Gillen in association with the University of Pennsylvania Institute for Urban Research where Dr. Gillen is a Research Fellow. Econsult thanks the Federal Housing Finance Agency, Case-Shiller MacroMarkets LLC, RealtyTrac, IHS Global Insight and the NAHB for making their data publicly available, and to Realtor Tim Krug for sharing MLS data. Special thanks to Daniel Miles for his expert research assistance. © 2011, Econsult Corporation, All Rights Reserved.
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Philadelphia House Price Indices, 2011 Q1 Philadelphia’s Decline in House Values Slows Significantly in Q1 . . . House prices decline 1.3% in 2011 Q1.Following several consecutive quarters of sharp price declines, the Philadelphia housing market appeared to have tapped the brakes this past winter.The typical Philadelphia home fell in value by an average of 1.3% on a quality- and seasonally- adjusted basis this past winter, according to the latest data from the City’s Recorder of Deeds. This comes after several consecutive quarters in which price declines totaled nearly 9% following the expiration of the Federal homebuyer tax credit last spring. And, while the winter season is normally a down period for both home sales and prices, this winter’s price decline is the smallest since 2007. With this most recent decrease, the average Philadelphia home has now fallen in value by a cumulative total of 16% since the bursting of the national housing bubble several years ago. Philadelphia’s house values have now reverted back to 2005 levels. (April 25, 2011)
Transcript of Philadelphia House Price Indices, 2011 Q1
PHILADELPHIA HOUSE PRICE INDICESApril 25, 2011
Kevin C. Gillen, [email protected]
Disclaimers and Acknowledgments: Econsult Corporation provides these house prices indices free of charge to the public. The indices areproduced by Econsult Vice President Kevin Gillen in association with the University of Pennsylvania Institute for Urban Research where Dr.Gillen is a Research Fellow. Econsult thanks the Federal Housing Finance Agency, Case-Shiller MacroMarkets LLC, RealtyTrac, IHS GlobalInsight and the NAHB for making their data publicly available, and to Realtor Tim Krug for sharing MLS data. Special thanks to Daniel Milesfor his expert research assistance. © 2011, Econsult Corporation, All Rights Reserved.
© 2011 Econsult Corporation | [email protected]* Empirically estimated by Kevin C. Gillen, PhD **Courtesy of the Federal Housing Finance Agency (FHFA). HPIs are available through 2010Q3 only.
“MSA”=Metropolitan Statistical Area, which is the entire 9-county region.
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House Price Indices 1980-2011: 1980Q1=100Philadelphia County v. Philadelphia MSA and U.S. Average
Phila. County*
Phila. MSA**
U.S. Avg.**
Q1
Period Philadelphia County*
Philadelphia MSA** U.S.A.**
30-Year 141.0% 156.2% 114.9%
10-Year 59.1% 55.7% 26.9%
1-Year -6.5% -4.6% -4.0%
1-Quarter -1.3% -0.6% -0.8%
*Empirically estimated by Kevin C. Gillen PhD
**Source: U.S. Federal Housing Finance Agency (FHFA). These numbers are through 2010Q4 only.“MSA”=“Metropolitan Statistical Area”, which is the entire 9-county region.
Total House Price Appreciation Rates by Geographic Market
© 2011 Econsult Corporation | [email protected]
*Source: Case-Shiller MacroMarkets LLC. The 10-City Composite index includes Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco, and Washington, DC. It does not include Philadelphia.
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House Price Appreciation 1987-2011: Philadelphia v. 10-City Composite
10-City Composite*
Philadelphia
% Change 10-City Philadelphia1998 to Peak: +172% +143%From Peak: -31% -16%
© 2011 Econsult Corporation | [email protected]
* All indices empirically estimated by Kevin C. Gillen, PhD
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Philadelphia House Price Indices by Neighborhood: 1980-20111980Q1=100
CtrCity/Fairmount
Kensington/Frankford
Lower NE Phila.
North Phila.
NW Phila.
South Phila.
Univ. City
Upper NE Phila.
West Phila.
Q1
© 2011 Econsult Corporation | [email protected]
PeriodCenter City/Fairmount
Kensington/Frankford
Lower NE Phila.
North Phila.
NW Phila.
South Phila.
Univ. City
Upper NE
Phila.West Phila.
30-year 147.8% 151.9% 130.5% 163.8% 174.8% 178.9% 150.9% 164.1% 160.0%
10-year 50.5% 73.0% 64.5% 68.9% 68.5% 101.5% 53.6% 69.3% 75.4%
1-Year -0.4% -7.2% -10.9% -11.0% -7.5% -5.2% -4.5% -5.9% -9.3%
1-Quarter 5.4% 7.2% -1.9% 1.2% -5.0% 8.8% 11.1% -1.4% 8.3%
Philadelphia House Price Appreciation Rates by Neighborhood
This table gives the total % change in house prices by neighborhood, through 2011Q1, from different starting points in time.
© 2011 Econsult Corporation | [email protected]
* Empirically estimated by Kevin C. Gillen, PhD
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Median Philadelphia House Price v. Indexed Philadelphia House Price1980-2011
Median Price
Indexed Price*
Q1
© 2011 Econsult Corporation | [email protected]
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Average House Price Minus Median House Price: 1980-2011
© 2011 Econsult Corporation | [email protected]
*Only arms-length transactions between private sector entities were included in this analysis.
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Number of House Sales* per Quarter: 1995-2011
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Qtly. Average
© 2011 Econsult Corporation | [email protected]
*Only arms-length transactions between private sector entities were included in this analysis.
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Number of Philadelphia Home Sales* with Price>=$1 Million
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Qtly. Average
© 2011 Econsult Corporation | [email protected]
© 2011 Econsult Corporation | [email protected]
Philadelphia House Sales in 2011 Q1
Sales are color-coded by quintiles of the distribution of $Price/SqFt. Hence, each of the five categories covers exactly 20% of all sales.
Sales are color-coded by quintiles of the distribution of $Price/SqFt. Hence, each of the five categories covers exactly 20% of all sales.
Upper NE Phila: -1.4%
Lower NE Phila: -1.9%
North Phila: +1.2%
Kensington/Frankford: +7.2%
Center City/Fairmount: +5.4%
South Phila: +8.8%
Note: Each neighborhood is extruded by its average change in house values during 2011 Q1 in order to reflect its growth (or depreciation) rate relative to other neighborhoods.
2011 Q1 House Price Rate of Change by Neighborhood
NW Phila: -5.0%
Univ. City: +11.1%
West Phila: +8.3%
© 2011 Econsult Corporation | [email protected]
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Philadelphia House Price Diffusion Index
Philadelphia HPIDiffusion Index
The diffusion index measures how varied the direction of house price changes are across Philadelphia neighborhoods. It is computed as the percent difference between the number of nieghborhoods in which prices rose in a give quarter, and the number of neighborhoods in which prices fell. A value of -100% indicates that prices fell citywide in a given quarter, while a value of +100% indicates that prices rose citywide. A value of 0% indicates that house price changes were evenly split between increases and decreases, across neighborhoods. Diffusion indexes are commonly used in financial economics as a leading indicator of turning points in a market's direction.
© 2011 Econsult Corporation | [email protected]
Source: US Census, BEA
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Philadelphia Housing Affordability* Index: 1980-2011
*Affordability is measured as the ratio of the medianPhiladelphia house price to the to the median Philadelphia household income. High values of the index mean that housing has become less affordable to the average Philadelphian. Contact [email protected] for details.
© 2011 Econsult Corporation | [email protected]
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Average House Price-to-Rent Ratios*: 1980-2011Philadelphia v. U.S.
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Philadelphia
*Computed by taking the ratio of average house price to the average annual rent of a comparable housing unit. The P/R ratio is to real estate what the P/E ratio is to other assets. Sources: US Census, US BLS.Contact [email protected] for further details.
© 2011 Econsult Corporation | [email protected]
Source: US Bureau of Labor Statistics
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Inflation-Adjusted* Philadelphia House Price Index 1980-20111980Q1=100
*The empirically estimated house price index is def lated by the rate of inf lation over time, using the national Consumer Price Index as the proxy for the national rate of inf lation. This procedure converts the house price index f rom "nominal" to "real" terms, and thus shows house price changes net of general inf lation.
Linear Trendline
© 2011 Econsult Corporation | [email protected]
Source: Trend MLS, courtesy of www.developphilly.com
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14,000Philadelphia Houses Listed For Sale: Inventory v. Sales Rate
# Houses Listed For Sale% Sold
# H
omes
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"For
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e" %Sold = (#Sales/#Listings)
© 2011 Econsult Corporation | [email protected]
Source: Trend MLS, courtesy of www.developphilly.com
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Average Days-on-Market* for Philadelphia Homes
*Days-on-Market (DOM) is the average number of days it takes for a listed house to sell.
# of
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© 2011 Econsult Corporation | [email protected]
Source: National Assoc. of Homebuilders (NAHB)/Wells Fargo
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Index of National Homebuilder Sentiment: 1985-2011(Seasonally Adjusted)
National
Northeast
The Index represents the current sentiment of U.S. homebuilders. The index is computed via a regular monthly survey of homebuilders. An index value above 50 indicates that more builder are optimistic than pessimistic, while an index value below 50 indicates that more builders are pessimistic than optimistic.
© 2011 Econsult Corporation | [email protected]
Source: www.nasdaq.com and finance.yahoo.com
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Philadelphia Stock Exchange Housing Sector Index
The PHLX Housing Sector Index is a modif ied cap-weighted index composed of 20 companies whose primary lines of business are directly associated with the U.S. housing construction market. The index composition encompasses residential builders, suppliers of aggregate, lumber and other construction materials, manufactured housing and mortgage insurers.
Note: the index underwent a signif icant rebalancing in January of 2006.
© 2011 Econsult Corporation | [email protected]
-7%-10%
-15% -16% -16%-18%
-23%-26% -26% -26%
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Cumulative %Decline in House Prices from Peak
This chart shows the total decline, to date, in the average house price in each city since the bursting of the housing bubble. Philadelphia's decline is empirically estimated by Kevin C. Gillen, PhD. All other cities courtesy Case-Shiller MacroMarkets LLC.
© 2011 Econsult Corporation | [email protected]
