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In Center City, home prices holding their own

Prudential Fox & Roach Real Estate agent Bari Shor was watching as folks arrived for an open house in the 300 block of Delancey Street.

Prudential Fox & Roach Real Estate agent Bari Shor was watching as folks arrived for an open house in the 300 block of Delancey Street.

The house, built in 1760, was listed at $995,000 - a bit rich for the first-time and lower-income buyers who are mainstays of much of Philadelphia's housing market - though Shor said the owner was willing to take less.

Among those wandering through were a couple in their late 20s, who looked around, took a brochure, and quickly exited. "They come to all my open houses," Shor said. "They don't seem to be interested in buying anything now."

It's like that all over. Economic worries have cut into the pool of buyers just when there's a surplus of houses for sale throughout the city.

Median single-family home prices in Philadelphia's neighborhoods, especially Center City, have fallen 15.8 percent - much less during this downturn in housing than the last one in the late 1980s to mid-1990s - said Kevin Gillen, vice president of Econsult Corp., who collected and analyzed data from 376,257 sales regionwide from April 1, 2005, through June 30, 2011.

But lower-income neighborhoods have suffered more than their upscale counterparts, Gillen said, as the struggling economy has edged out less-well-off buyers.

"The tightening of credit has skewed home sales toward the upper end of the market," Gillen said. "So when you compute the average price decline for the entire city, versus computing the average price decline across all zips [zip codes] in the city, you get two different numbers."

That is, different portraits of how home prices are behaving in the city's neighborhoods.

It's why, for instance, the analysis showed that the median price in a North Philadelphia zip code such as 19132 fell 39 percent, to $20,000, while in Kensington (zip code 19125) the median price rose 16 percent, to $128,000. (Median is the middle value: Half the houses sold for more, half for less.)

In a city that measures itself block by block, there's no getting away with generalizing about prices.

Across the region, Gillen said, the suburbs closer to the city held their value better than those farther out, reversing a 60-year-old trend, and the more you cut into the data, the more that pattern keeps repeating.

"So the city declines were less than the inner-ring suburban ones, but the Center City declines were even less than the rest of the city," he said.

That occurred as Center City continued to absorb 11,000 new units, mostly condos, its housing stock more than doubling since 1998, he said.

"The dramatic revitalization of Center City since the last housing downturn of the early 1990s is especially key to attracting more affluent households to the city," Gillen said. "There is no way that [baby] boomers would be shelling out nearly $1 million for all those new condos if Center City looked like it did in 1991."

Gillen analyzed condo-sales data separately from single-family-home sales. Condos are considered multifamily housing because buyers purchase a portion of a building.

They have been a mixed blessing, especially in Center City: Some buildings have brought in multimillion-dollar prices; others have had to auction off blocks of 40 or more condos to meet lenders' demands.

Jay Lamont, who hosted a real estate radio show for three decades, recently sold an 1,100-square-foot investment condo on the 18th floor of Independence Place for $280,000. It had been on the market for a year.

"My very first loss sustained on once-prime real estate since 1982, when mortgage rates were at least 18 percent," Lamont said.

But a single-family address in Center City is no guarantee of a windfall, either.

In Society Hill (zip code 19106), median prices are down 8 percent from 2005, from $710,000 to $652,500. For those who bought at the top of the market in 2007, it's worse - the median price has dipped 15 percent since then.

Prices in other zip codes have fared quite well, the sales-data analysis showed. West Philadelphia/University City (up 45 percent), Mount Airy (up 16 percent), and Fairmount north of Girard Avenue (up 25 percent) all saw double-digit gains from 2005.

Chestnut Hill, which for years boasted the city's highest home prices, saw the biggest gains during the sales period analyzed: 57 percent, with a second-quarter 2011 median price of $629,500. Roxborough, Manayunk, and Wadsworth, also in the northwest reaches, showed smaller price increases.

The city's highest median price, around Rittenhouse Square, was $687,500.

Southwest Center City (zip code 19146) benefited from younger buyers seeking less expensive housing, with prices gaining 43 percent since 2005, for a second-quarter 2011 median of $150,500.

Krysty Petrucci, 26, co-founder and principal at Tribal Media, a social-media agency, would love to jump into the market now, with mortgage interest rates so low.

"I wouldn't hesitate . . . even if prices do continue to fall," she said. "[But] I still have a lot of student-loan debt, and I want to pay it down and get my credit score up."

In Northeast Philadelphia's neighborhoods, prices are generally lower now than they were during the housing boom, the sales-data analysis showed, but many of the percentage drops were less than 15 percent, the median decline for the city as a whole.

Mayfair Realtor Christopher J. Artur said first-time buyers and New York investors pushed prices up there in the boom, as cheap mortgage money eased marginal purchasers into the market.

But today, buyers are scarce, he said, lacking confidence in the economy and secure jobs.

"If you want to buy under $100,000 with an FHA loan, you need $3,000 down and you can get a $2,000 grant from the state and a 6 percent seller assist to do it," he said.

But you also need four credit references, and "that appears to be a problem."