Earni Young | Philly housing market: Standing tall, but wobbly

TO BUY or not to buy a home right here right now, that is the question. OK, so I've mangled Shakespeare. However, the question remains: What's the market like out there for home buyers and home sellers? The answer depends on the age-old real estate mantra "location, location, location"."

In boomtowns like Boston, Washington D.C., Miami, Las Vegas and Los Angeles, home sales have slowed and prices have dropped dramatically in the past year. But sales prices are still on the rise in Seattle, Portland, Ore., and Dallas - the only metro areas fortunate enough to see housing price increases in February from the previous month, according to a monthly Standard & Poor's index. The S&P index tracks prices in 20 major metro areas, including Atlanta, Boston, San Francisco and Detroit, but not Philadelphia.

To find out how Philly is doing, we have to depend on local number crunchers. This week saw the release of the Prudential Fox & Roach HomeExpert market report based on Trend data, the regional multiple listing service for Realtors, and a quarterly analysis of city deed recordings by Wharton economist Kevin Gillen.

Both market reports reflect that while Philadelphia's housing market has cooled, it is doing better than the nation as a whole and some other big cities in particular.

Steve Storti, senior vice president of marketing for Prudential Fox & Roach Realtors, read the tea leaves and concluded that the Philadelphia market is still standing tall but on wobbly legs. Storti believes the local housing market is in a transition phase, "from a declining market to one that may be stabilizing for a while."

Storti heads the area's largest real estate brokerage, so of course he is going to see a glass half full. That said, he's been around the settlement table a few times and should know a flop when he sees one.

He blames some of the market blues on the crummy weather that was either too frigid, drenching wet or both from February through the end of April. January, unusually warm even for Philly, was actually a strong sales month, Storti said.

He cautioned against reading too much into the raw Trend sales numbers, which for the most part reflect closings on contracts signed in the previous three months. Trends' stats also are easily skewed by projects where the sales occur over a period of a year or longer, but then are closed and recorded in two or three months once construction is finished. Also, prices in a ZIP code with a small number of sales are easily thrown for a loop by the sale of a trophy property or one that is distressed and priced accordingly.

With those caveats in mind, some stats from the Prudential Fox & Roach report include:

* Philadelphia's median home-sale prices increased an average of 3.5 percent to $133,000 in the first three months of 2007, vs. $128,500 a year ago.

* Center City posted the highest median sale price at $362,000 and the highest number of homes sold (1,752), a 24.3 percent increase over 2006.

* North Philly - you read that right - posted the largest percent increase in median sale price in the city, with a 27.7 percent jump to $78,225, followed by the River Wards between North Broad and the Delaware River at 19.7 percent to $102,725.

* There were 3,906 homes sold (actual settlements on listings) in the first quarter of this year, a 5.9 percent decrease from the 4,149 sold in the comparable 2006 period. Remember, only about 75 percent of area homes for sale are listed on Trend.

Gillen would not uncap specific findings in time for my deadline, but you can find them posted on http://www.hallwatch.org today. Gillen said his report shows house prices here are basically flat citywide. "Any price changes, either up or down, were statistically negligible from last quarter to this one," he said. That would be the last three months of 2006, and the first three months of 2007 respectively.

He also reports that sales volume is markedly down in the 2007 first quarter compared to the previous three months. Just over 5,000 homes changed hands this winter, which is a five-year low.

"Despite these numbers, Philadelphia is still faring much better than many other markets in the U.S.," Gillen said. "We are still a relatively affordable city with prices only two- to three-times income. We haven't had nearly the home building boom other cities have had. And our default and foreclosure rates remain well below other 'bubble' markets in the Sun Belt.

"So, we may still not be New York, but, thank God, we are not Vegas, Phoenix or Miami!"

Amen to that. *