Philadelphia House Price Indices on a Rise - Lindy institute prof. Gillen Philly housing sales...

© 2016 Drexel University | [email protected]

PHILADELPHIA HOUSE PRICE INDICES

KEVIN C. GILLEN, Ph.D.

[email protected]

Disclaimers and Acknowledgments: The Lindy Institute for Urban Innovation at Drexel University provides this report free of charge to the public. Thereport is produced by Kevin C. Gillen Ph.D.. The author thanks Azavea.com, the Philadelphia Office of Property Assessment, the Federal HousingFinance Agency, Case-Shiller MacroMarkets LLC, RealtyTrac, Zillow.com, Trulia.com and the NAHB for making their data publicly available. © 2016,Drexel University, All Rights Reserved.

August 8, 2016


* Empirically estimated by Kevin C. Gillen, Ph.D. **Courtesy of the Federal Housing Finance Agency (FHFA). HPIs are available through 2015Q4 only.“MSA”=Metropolitan Statistical Area, which is the entire 9-county region.

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House Price Indices 1980-2016: 1980Q1=100Philadelphia County v. Philadelphia MSA and U.S. Average

Phila. County*

Phila. MSA**

U.S. Avg.**

Q2


PeriodPhiladelphia

County*Philadelphia

MSA**U.S.A.**

37-Year 161.9% 172.4% 134.1%

10-Year 10.5% 7.6% 3.6%

1-Year 13.0% 4.0% 5.5%

1-Quarter 6.2% 2.2% 1.3%

*Empirically estimated by Kevin C. Gillen Ph.D.

**Source: U.S. Federal Housing Finance Agency (FHFA). These numbers are through 2016Q1 only. “MSA”=“Metropolitan Statistical Area”, which is the entire 10-county region.

Total House Price Appreciation Rates by Geographic Market


*Source: S&P/Case-Shiller. 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 1987-2016:

Philadelphia v. 10-City Composite

10-City Composite*

Philadelphia

% Change 10-City Philadelphia1998 to Peak: +173% +137%From Peak: -11% +1%


*Source: S&P/Case-Shiller. 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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YoY House Price Change (%) 1987-2016:

Philadelphia v. 10-City Composite

10-City Composite*

Philadelphia

This chart shows the percent change in the respective house price indices from one year ago, which proxies for the annaul average house price appreciation rate in each market.


* All indices empirically estimated by Kevin C. Gillen, Ph.D.

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Philadelphia House Price Indices by Neighborhood: 1980-20161980Q1=100

CtrCity/Fairmount

Kensington/Frankford

Lower NE Phila.

North Phila.

NW Phila.

South Phila.

Univ. City

Upper NE Phila.

West Phila.

Q2


Period

Center City/

FairmountKensington/Frankford

Lower NE

Phila.North Phila.

NW Phila.

South Phila.

Univ. City

Upper NE

Phila.West Phila.

36-year 170.4% 160.7% 138.0% 165.5% 176.8% 205.1% 185.7% 165.8% 170.8%

10-year 5.9% 8.1% -7.5% 5.4% 1.1% 28.4% 13.2% -3.4% 10.4%

1-Year 1.9% 9.5% 8.6% 7.9% 7.1% 12.2% -6.4% 4.6% 6.3%

1-Quarter 3.4% 0.8% 3.1% 11.7% 5.1% 4.2% 15.0% 1.7% 11.8%

Philadelphia House Price Appreciation Rates by Neighborhood

This table gives the total % change in average house prices by neighborhood, through 2016 Q2, from different starting points in time.


Philadelphia Submarket Boundaries


* Empirically estimated by Kevin C. Gillen, PhD

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Median Philadelphia House Price v. Indexed Philadelphia House Price1980-2016

Median Price

Indexed Price*

Q1


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Average House Price Minus Median House Price: 1980-2016


*Only arms-length transactions between private sector entities were included in these numbers.

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Number of Philadelphia House Sales* per Quarter: 1980-2016

Q1

Q2

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Q4

Qtly. Average


*Only arms-length transactions between private sector entities were included in these numbers.

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1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of Philadelphia Home Sales* per Quarter

with Price>=$1 Million: 1997-2016

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Q2

Q3

Q4

Qtly. Average


Philadelphia House Sales in 2016 Q2


Center City House Sales in 2016 Q2


South Philadelphia House Sales in 2016 Q2


Kensington/Frankford House Sales in 2016 Q2


West Philadelphia House Sales in 2016 Q2


North Philadelphia House Sales in 2016 Q2


Northwest Philadelphia House Sales in 2016 Q2


Northeast Philadelphia House Sales in 2016 Q2


2016 Q2 House Price Rate of Change by NeighborhoodUpper NE Phila: +1.7%

Lower NE Phila: +3.1%

North Phila: +11.7%

Kensington/Frankford: +0.8%

Center City/Fairmount: +3.4%

South Phila: +4.2%

NW Phila: +5.1%

Univ. City: +15.0%

West Phila: +11.8%

Note: Each neighborhood is extruded by its average change in house values during 2016 Q2 in order to reflect its growth (or depreciation) rate relative to other neighborhoods.


+$1 Million Dollar House Sales in 2016 Q2

PRICE ADDRESS

$1,030,000 2316 GREEN ST

$1,070,000 272 S 03RD ST

$1,090,000 1617 LOMBARD ST

$1,095,000 1630 NORTH ST

$1,100,000 210 SPRUCE ST

$1,150,000 30 W BELLS MILL RD

$1,200,000 510 DELANCEY ST

$1,235,000 8864 GERMANTOWN AVE

$1,255,000 2135 GREEN ST

$1,295,000 616 S AMERICAN ST

$1,325,000 2129 WALNUT ST

$1,500,000 1311 IRVING ST

$1,500,000 1211 NOBLE ST

$1,550,000 1024 CLINTON ST

$1,559,500 701 S 15TH ST

$1,650,000 823 S MILDRED ST

$1,650,000 2121 PINE ST

$1,693,500 528 SPRUCE ST

$1,700,000 2511 PANAMA ST

$1,730,000 2044 WAVERLY ST

$1,967,000 1932 PANAMA ST

$2,800,000 1832 DELANCEY PL

$3,218,544 460 W CHESTNUT HIL AVE

$3,900,000 2108 SPRUCE ST


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Philadelphia House Price Diffusion Index

Philadelphia HPI

Diffusion 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 neighborhoods in which prices rose in a given quarter, and the number of neighborhoods in which prices fell. A value of -100% indicates that prices fell in all neighborhoods in

a given quarter, while a value of +100% indicates that prices rose in all neighborhoods. 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.


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00Philadelphia House Prices: Declines v. House Price Index

Pct. Declining

Philadelphia HPI

This chart compares the Philadelphia House Price Index (in red) to the percent of Philadelphia neighborhoods that experienced house price declines (in blue) , in each quarter from 1980-2016.

%D

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Dispersion Index of Philadelphia Housing

The Dispersion Index measures how varied house price changes are across the city's neighborhoods. It is computed as the standard deviation of quarterly house prices changes across submarkets. High values of the index imply large variation in house price changes between different neighborhods, while low values imply that house price changes are relatively the same across the city.


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Philadelphia Housing Affordability* Index: 1980-2016

*Affordability is measured as the ratio of the median Philadelphia house price 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.


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Average House Price-to-Rent Ratios*: 1980-2016

Philadelphia v. U.S.

U.S.

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. Contact [email protected] for further details.


Source: US Bureau of Labor Statistics

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Inflation-Adjusted* Philadelphia House Price Index 1980-2016

1980Q1=100

*The empirically estimated house price index is deflated by the rate of inflation over time, using the national Consumer Price Index as the proxy for the national rate

of inflation. This procedure converts the house price index from "nominal" to "real" terms, and thus shows house price changes net of general inflation.

Linear Trendline

© 2016 Drexel University | [email protected]: Trend MLS

“%Absorbed” is defined as the percent of homes listed for sale in a given month that also sold in that same month.

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Philadelphia Houses Listed For Sale: Inventory v. Absorption Rate

# Houses Listed For Sale

% Absorbed

# H

om

es L

iste

d "

Fo

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" %A

bso

rbe

d =

(#S

ale

s/#

Lis

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s)



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Months' Supply of Inventory in Philadelphia

Seller's Market

Balanced Market

Buyer's Market

Months' Supply of Inventory measures how many months it would take to completely burn off the existing inventory of homes currently l isted for sale, given their current pace of

sales. 5-7 months is considered a normal, balanced market. More than 7 months indicates a Buyer's market, and less than 5 months indicates a Seller's market.



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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.

# o

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Source: National Assoc. of Homebuilders (NAHB)/Wells Fargo

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Index of Homebuilder Sentiment: 1985-2016

(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.


Source: finance.yahoo.com

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Philadelphia Stock Exchange Housing Sector Index: 2002-2015

The PHLX Housing Sector Index is a modified 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 significant rebalancing in January of 2006.


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***

Single-Family* Multifamily** Center City Pop.

*Structures with 1-4 dwelling units**Structures with >=5 dwelling units

# o

f Un

its

***Note: 2016 Numbers are YTD numbers through June 2016.

Building Permits Issued for Construction of Residential Units in Philadelphia: Single-Family v. Multifamily

Sources: U.S. CensusCenter City District

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Philadelphia House Price Index and 1-Year Forecast

Zillow.com is currently forecasting Philadelphia house prices to rise an average of 2.9%over the next year, which is an upgrade from its previous annual forecast of 2.2% madethree months ago. It has also upgraded its market temperature for Philadelphia from“Hot” to “Very Hot”, and has characterized it as a “Seller’s Market”.Source: http://www.zillow.com/philadelphia-pa/home-values/

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Philadelphia House Price Index: Actual v. Forecast

Phila. County HPI

Forecast HPI

Philadelphia House Price Indices on a Rise - Lindy institute prof. Gillen Philly housing sales...

Real Estate

Transcript of Philadelphia House Price Indices on a Rise - Lindy institute prof. Gillen Philly housing sales...