City real estate continues to have 'fits and starts'

First-quarter average home values in Philadelphia declined 4 percent from the last three months of 2013 as the city's real estate market recovery continued to experience "fits and starts," economist Kevin Gillen, who tracks the market, said Monday.

In his analysis of home sales recorded during the first quarter, Gillen, senior consultant at the University of Pennsylvania's Fels Institute of Government, said the recovery has been "unevenly - and inequitably - spread across" the city's neighborhoods.

The index he created for city home values fell in the first quarter to near its second-quarter 2012 postrecession low, Gillen said.

The first-quarter statistics continued to confirm the trend, "indicating improved market conditions in either relatively high-income or gentrifying areas, but continued stagnation or even decline" in the rest of Philadelphia.

The median home price fell to $110,000 from $127,000 in the last three months of 2013, a decline of 13 percent, he said.

Gillen's analysis of price trends in the suburbs will not be ready for several weeks, but real estate agents in counties on both sides of the Delaware also have reported a fitful recovery.

The city price analysis essentially confirms what real estate agents have been saying in recent months, although the first-quarter results also were affected by the harsher-than-normal winter.

Snow and cold delayed showings and closings, and fewer prospective sellers were eager to put their houses on the market, agents have said.

In addition, the "spring market," which in this region tends to start after New Year's and revs up after Super Bowl Sunday, has only recently begun picking up steam.

Center City, its edge neighborhoods to the north and south, and University City showed quarterly gains in average value, although nothing large enough to offset the declines Gillen found in less affluent areas of the city.

Center City/Fairmount prices were up only 6.8 percent quarter-to-quarter, while University City rose 2.7 percent, Gillen's analysis of recorded deeds showed.

South Philadelphia prices increased 2.5 percent. Though South Philadelphia is not considered an affluent area, Gillen said, development in Point Breeze west of Broad Street and East Passyunk to the east have pushed prices higher.

Every other neighborhood posted declines - from West Philadelphia's 17.5 percent to Northwest Philadelphia's 2.2 percent, he said. The upper reaches of Northeast Philadelphia saw a 5.9 percent drop; the Lower Northeast was down 5.7 percent.

Though recorded sales citywide reached 3,148 in the quarter, about 600 above fourth-quarter 2013, they remained well below the "normal" quarterly average of 3,800, Gillen said.

"Notably, however, sales of million-dollar homes continue to run well above their historic average, providing further evidence that Philadelphia's housing recovery remains skewed towards the upper segment of the market," he said.

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