3Q data show Phila. home sales still rebounding

Home sales continued to rebound in Philadelphia in the third quarter, although price increases were lower than in the previous three months.

An analysis of data from the Recorder of Deeds Office by economist Kevin Gillen showed that sales volume, well below normal since the real estate downturn began in 2007's third quarter, rose significantly in this year's third quarter from the second, especially in lower-priced neighborhoods.

Just under 4,000 transactions were recorded in the July-September period - the first time since 2010 that sales have exceeded their historic quarterly average of 3,800, Gillen said.

The 3,937 sales recorded in the third quarter represented a 14 percent increase from 3,466 in the second, he said.

At the peak of the housing boom in 2006, quarterly sales reached almost 8,000, Gillen's data show.

In this year's third quarter, the average sale price in the city increased by 1.4 percent - to $170,682 from $168,325 in the previous three months, he said.

"This follows a particularly strong second quarter, when citywide appreciation was 6.3 percent, and was the largest quarterly increase in Philadelphia house prices in two years," Gillen said.

The city's housing recovery appears to be more equitable as well, he said.

Since the market here hit bottom more than two years ago, many higher-priced and higher-income neighborhoods have seen significant recoveries in both property values and sales activity. Yet other neighborhoods have struggled to catch up.

"However, this [third] quarter saw some of the biggest post-bubble price appreciation in many of the city's lower-income areas, while higher-income neighborhoods appeared to take a timeout," Gillen said.

Sales and increased prices had been skewed to the higher end of the market, with million-dollar home sales rebounding strongly to their pre-bust levels. Sales volume overall had been running below its historic average for the last five years, he said.

Carol McCann, of Re/Max Millennium in the city's Somerton section, said she had seen evidence of the greater equitability in the neighborhoods in which she sells.

"My listings in the price range between $90,000 and $140,000, mainly in the Northeast, on average sell within 60 days, while the properties that I have listed in the range of $250,000 or higher are seeing less showing activity and taking longer to sell, at an average of 100-plus days on the market," she said.

Ruth Feldman, of Weichert/McCarthy Associates in Mount Airy and Germantown, said she has seen price appreciation in the many rehabs that seem to be prevalent in the lower- and mid-range-income areas.

"There is a lot of investor activity and competition in these areas," Feldman said. "Those rehabbed properties sell quickly and for the best prices, which may account for the appreciation in those areas as opposed to the higher-income areas."

Not only is volume picking up, but sales velocity as well, Gillen said: The average amount of time it takes to sell a home in Philadelphia is days, down from 88 days just over a year ago and its peak of 95 days in 2011.

But Philadelphia's housing recovery continues to lag those of most other large U.S. cities, he said.

S&P/Case-Shiller's home-price index shows that the 10 largest U.S. cities have recovered about half of the total housing value lost during the downturn, while Philadelphia has recovered only a little more than a third, Gillen said.

In addition, the real estate analytics firm Zillow is projecting house-price appreciation here to be only 0.5 percent over the next 12 months, compared with an average of 2.3 percent for all major metropolitan areas, he said.

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